December 4, 2017

76 Reps Sign On to 340B Bill; Lawsuit Moves Forward

76 U.S. Representatives from 27 states and D.C. have now signed on to legislation designed to roll back a new CMS 340B payment reduction regulation that takes effect January 1.  Click here to see the list of cosponsors.  Hospitals are urged to contact their Reps and urge them to sign on.   Click here to read the bill. Unless stopped, the regulation will cut Part B 340B drug payments to be cut 28.5 percent.  Meantime, a federal judge scheduled a December 21 hearing in a lawsuit brought by hospitals against CMS over the regulation. The American Hospital Association, Association of American Medical Colleges, America’s Essential Hospitals and three individual hospitals are asking District Court Judge Rudolph Contreras to stop the reg. HHS had to file its arguments for throwing out the case by Dec. 1, and hospitals have a Dec. 8 deadline for filings in support of a preliminary injunction. To read the complaint, click here.

Senate, House Work To Reconcile Tax Bills

The Senate, on a 51 to 49 vote, passed its tax reform bill containing numerous provisions impacting health care.  Clickhere for the 479-page Senate tax bill (last minute floor amendments are not included). Click here for a Washington Post summary of some of the health care provisions.  The House passed its version November 16.  Senate and House leaders have begun work to reconcile the differences with hopes of passing a final bill before Christmas. Among the major health care provisions:

Individual Mandate Repeal: The Senate version repeals the individual mandate requiring the purchase of health insurance; the House version does not. To gain support for the mandate repeal, the Senate Majority Leader has agreed to bring up for a vote the agreement previously negotiated by Senators Lamar Alexander (R-TN) and Patty Murray (D-WA) to fund the cost sharing reduction payments for two years. This is expected to occur prior a final vote on the conference agreement on the tax reform bill. The most significant health care concessions were made to Sen. Susan Collins (R-ME). Click here for her statement outlining what she was given to secure her vote. Keep in mind that the GOP’s House Freedom Caucus will likely oppose most of these concessions. Click here for the updated Congressional Budget Office analysis of the passage of the cost sharing reductions and the repeal of the individual mandate.  Executive Compensation: Both the House and Senate bills include a new 20 percent excise tax for covered employee compensation in excess of $1 million at applicable tax-exempt organizations, including hospital systems. Covered employees include the principal executive officer and the principal financial officer, plus the three additional most highly compensated officers.  Private Activity Bonds: The House version would include interest on private activity bonds in the taxpayer’s gross income. The Senate version does not include a comparable provision.  Rehabilitation/Historic Tax Credits: Some health systems have expressed concern about the non-health related business credits. The House bill repeals the rehabilitation credit with a transition rule; the Senate bill repeals the 10% credit for pre-1936 buildings and reduces the current 20% credit for qualified rehabilitation expenditures to a 10% credit with a transition rule. $25 Billion in Medicare Cuts: Under the Pay-As-You-Go law passed in 2010, passage of the tax bill would force $25 billion in cuts to Medicare in 2018, according to the Congressional Budget Office. Senator Collins (R-ME) says she has been assured that this won’t happen. It remains to be seen if the deficit hawks will agree. Click here.

Medicare Extenders Bill Still a Work in Progress; CAH Coalition Opposes Swing Bed Provision The House Ways & Means Committee and Senate Finance Committee have released separate outlines of bipartisan legislation to extend Medicare health programs and policies, including offsets, though the committees didn’t break out the cost of the so-called extenders or the sum of the offsets. The health extenders package is expected to be part of legislation to fund the Children’s Health Insurance Program, which in turn is expected to be part of a year-end omnibus bill.  Click here for a WSJ report on the year end health care efforts, including the CHIP program funding.  Click herefor the Ways and Means summary of the extenders deal.  Click here for the Finance Committee summary. The House version would be paid for, in part, by cutting reimbursements for Critical Access Hospital swing beds.  The CAH Coalition is fighting that provision.  Click here and here.



GOP Leaders Consider Tackling Medicare, Social Security Next

Medicare may be the target of Congressional GOP leaders after they pass the tax bill, according to several sources.  Social Security changes may also be considered.  Click here for the report.


Hospital Bankruptcies Could Rise

Hospitals, particularly those in rural areas, may be the hardest hit as regulatory changes, technological advances and the rise of urgent-care centers have created a “perfect storm” for health-care companies, according to a new report. Since 1997, health-care cases have made up only 5.25 percent of all U.S. bankruptcy filings, according to Bloomberg data. Year to date, they already comprise 7.25 percent of all filings. Emergency-room operator Adeptus Health, cancer-care provider 21st Century Oncology, and cancer treatment specialist California Proton Treatment are the largest filings.  Click here for more.


CMS Moves Forward with Lab Fees, Ignores Comments

The new pay system for laboratory tests that CMS published the week before Thanksgiving mostly ignores the advice of the American Clinical Laboratory Association and hospitals leading to efforts to get lawmakers to delay the pay system and make the agency rework it. Medicare historically has paid more for lab tests than have commercial payers, under the Protecting Access to Medicare Act CMS is required to base reimbursement on commercial-payer rates. To determine commercial rates, CMS was charged with collecting price data from labs, and clinical labs. Groups stated that CMS ignored the law by not including a representative sample of the market, mainly hospital rates which are higher, in data collection. The ACLA and others are working with the Congressional Committees on legislation to restore Congressional intent. Click here to see the fee schedule, and here for more from the ACLA.


CMS Considers Axing, Changing Dozens of Quality Reporting Measures

The CMS last week released a list of 32 reporting measures under consideration for Medicare’s quality reporting and value-based purchasing programs. The number of measures under review is much smaller compared to last year when CMS considered nearly 100 measures. The move is in line with CMS Administrator Seema Verma’s focus on reducing regulatory burden for providers. The agency recently launched the Meaningful Measures initiative to identify measures that will have the greatest impact on quality care improvement.  Click here for the measures under review and the process CMS is using.
CMS Eliminates New Payment Model Programs; New Voluntary Programs May Come Soon

In a final rule issued last week (click here), CMS eliminated programs that would have held hospitals accountable for the cost of certain joint replacement surgeries and care for heart attacks and cardiac surgeries. The agency previously  rolled back an existing program focused on hip and knee replacements, giving hospitals in some areas the chance to opt out of what had been a mandatory program. The changes mark a continuing shift away from the mandatory payment models started by the Obama administration. CMS Administrator Seema Verma said in a statement that the agency will announce a new set of voluntary payment bundles in the near future. Click here for the CMS fact sheet.


AMA Pushes Back Again Pharma, PBMs; CMS Considering New Drug Cost Curbs

The American Medical Association believes that patients should be told when co-pays are more than drug cash-prices. By adopting the policy, the AMA stated that pharmacy benefit managers are some of many factors that contribute to drug prices consumers pay. Sometimes, the price of drugs, especially generics, is less than the co-pays that health plans and pharmacy benefit managers set. However, pharmacists say PBMs may prohibit them from telling patients when it’s cheaper to pay cash. In an effort to learn more from patients and their struggles to afford their medications, the AMA set up the interactive site To read more from the AMA announcement, click here.

  • Meanwhile, PhRMA started an ad campaign bashing PBMs and hospitals on the rising cost of drugs. Click here to listen to the radio ad, and here to view the print ad.
  • CMS is considering setting new payment methods aimed at curbing costs for Medicare and Medicaid coverage of breakthrough medical treatments with very high prices. Click here.
  • HHS Inspector General has found that CMS’ decision to include self-administered versions when setting prices for two Part B drugs caused Medicare to pay an extra $366 million from 2014 to 2016. Click here for the report.

Government Underestimated the Cost of the Opioid Crisis

The White House Council on Economic Affairs has released a report stating the government has underestimated the cost of the opioid crisis.  In 2015, the economic cost was $504 billion, or over six times more than the most recently estimated cost of the epidemic. The figure accounted for roughly 2.8 percent of the GDP that year. The report says the true cost of the opioid crisis has been greatly understated because the full loss of lives was not accounted for in previous reports. Click here for the report.

  • The FDA issued final guidance to help develop generic versions of abuse-deterrent opioids as part of its effort to transition towards formulations with properties such as being difficult to crush or dissolve. Click here for the FDA statement and here of the guidance.

Marketplace Enrollments Top 2 Million Halfway Through Period Nearly 2.3 million people signed up for 2018 marketplace insurance coverage in the first 18 days of open enrollment, according to CMS, outpacing last year’s sign-ups in a similar initial period. But this year’s enrollment season is half as long as last year. So far, 566,042 new consumers have selected plans this season while 1,711,037 returning customers have done so. Advocates, such as Get America Covered, led by former Obama administration officials, noted that the overall average daily enrollment in this year’s period was 126,549 signups compared to 89,406 per day last year. Click here for the CMS fact sheet.
FCC to Boost Funds for Rural Telehealth Programs

The Federal Communications Commission has proposed to increase funding for its Rural Health Care Program, as demand is projected to outpace the available capital for the second straight year. The FCC issued a notice of proposed rule-making that would provide an immediate boost to the program’s $400 million annual cap for fiscal year FY17, along with a longer-term proposal to increase the program’s funding limit. The RHCP fund, established in 1997 to help rural providers get access to broadband internet, provides the infrastructure for telehealth and remote monitoring programs. To read the FCC proposal, click here.

  • The CAH Coalition is working to help CAHs access these funds.  For more information, click here.

Nursing Homes Given Reprieve on Revised Requirements for Participation

CMS has announced it would give nursing home facilities an additional 18 months to meet the revised long term care facility requirements of participation. Facilities that fall short on complying with the phase 2 requirements of participation during the 18-month transition period will not face fines or civil monetary penalties, but instead will be asked to invest in staff education and to come into compliance as quickly as possible. CMS also announced a new, unified survey process for long term care facilities to ensure national consistency. Click here for the notice from CMS.


Majority of Kids Likely To Be Obese in Adulthood: Study

Nearly six in ten children in the U.S. will have obesity in adulthood if current trends continue, a new study from the Harvard T.H. Chan School of Public Health has found. The study, published in the New England Journal of Medicine, is based on a simulation model that predicts obesity prevalence at different stages of life. Researchers predicted that more than 57 percent of today’s children in America will have obesity at age 35.  Click here for more.

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