January 15, 2018

Government Funding Ends Friday; CHIP, Extenders, 340B Hang in the Balance

The federal government runs out of money Friday and there is certainly a chance Congress won’t be able to come to terms by then; however, late last week there were signs that another short term ‘continuing resolution’ – through mid-February – may be passed.  Democrats are using the continuing resolution as leverage to pass a DACA (Deferred Action for Childhood Arrivals) immigration deal.  But any spending deal may also include a 6 to 10 year extension of CHIP.  Unfortunately, the Medicare Extenders package may not be included now, but considered in the next spending package. It is also unlikely that 340B, Disproportionate Share Hospital payment cuts, and community health center funding legislation will be considered prior to March.

  • It now appears unlikely that there will be an overhaul of health care before the mid-term elections.  Click here.

Half the Nation Reports High Flu Activity: CDC

The flu is booming across the country – filling emergency rooms and hospital beds.  The CDC says 26 states are now  reporting high flu activity. Click here for the CDC’s national map. The CDC says 6,486 laboratory-confirmed influenza-associated hospitalizations were reported between October 1, 2017 and January 6, 2018. The overall hospitalization rate was 22.7 per 100,000 population. The highest rate of hospitalization was among adults aged ≥65 years (98.0 per 100,000 population), followed by adults aged 50-64 (24.0 per 100,000 population). California is seeing a spike in the number of flu deaths.  Click here.

Key Committee 340B Report Calls for Reforms; Lawsuit to be Appealed The House Energy and Commerce Committee last week released a report on its findings from a two-year investigation into the 340B Drug Pricing Program. It says Congress should clarify the drug discount program’s purpose and provide HHS with more regulatory authority to administer it. The report offered more than a dozen recommendations including giving the Health Resources and Services Administration more authority, resources and staff; requiring more audits of manufacturers and providers; and clarifying the intent of the program. The report also states that Congress may need to change the metric that is currently used to determine 340B eligibility. Click here for the full report.

  • Hospital groups notified the federal DC district court on Jan. 9th they are appealing the judge’s dismissal of their lawsuit over CMS reimbursement cuts for 340B drugs now that those cuts are in effect. The district judge had dismissed the hospitals’ case on the grounds it was premature because the cuts hadn’t yet kicked in when the suit was filed, and didn’t rule on the merits of the case. Click here for the notice.
  • Efforts are still underway to pass legislation that would negate for at least one or two years the CMS 340B payment cut rule that took effect January 1.  However, it seems unlikely to pass unless there are transparency and accountability reforms included.  Click here to see if your member of Congress has signed on to the bill that calls for a regulatory moratorium. There are now 174 cosponsors.

MedPAC Votes To Repeal MIPS The influential Medicare Payment Advisory Committee will recommend in its upcoming report to Congress to revise how Medicare pays for a number of physician services in order to reduce costs and improve quality. On January 11, MedPAC voted to recommend that Congress repeal MIPS, citing excessive data reporting that does little to help monitor the quality of care.  They said it should be replaced with a “voluntary value program” that would withhold a small percentage of physician reimbursement unless they agree to have their performance evaluated as part of a group. MedPAC Commissioner David Nerenz, Ph.D., was critical of the VVP model, and likened it to “fraternity and sorority rush” whereby the most successful clinicians would band together, and everyone else would be excluded. Further, he explained that the VVP is not really voluntary since there is a penalty for not participating, and that the model could increase socio-economic disparities. Commissioner Alice Coombs, M.D. made similar remarks and insisted on fixing MIPS instead. Nerenz and Coombs were the only votes against recommending that Congress eliminate MIPS and replace it with a VVP. Click here for MedPAC’s presentation on the repeal of the MIPS.

  • It still takes an act of Congress to repeal and replace MIPS.  No legislation has been introduced and none is expected this year.
  • CMS is seeking stakeholder recommendations for new specialty measure sets and/or revisions to existing specialty measure sets for program year 2019 of the Merit-based Incentive Payment System (MIPS) program. Submissions of recommendations will be accepted from stakeholders up until close of business on Friday, February 9th at [email protected]. For specifications, click here, and for list of measures currently under consideration, click here.

CMS To Update Rules for Medicare Conditions of Participation According to the latest Department of Health and Human Services Unified Agenda, CMS is planning a rule to revamp Medicare conditions of participation and conditions for coverage. The Regulatory Provisions to Promote Program Efficiency, Transparency, and Burden Reduction rule, would “reform Medicare regulations that CMS has identified as unnecessary, obsolete, or excessively burdensome on healthcare providers and suppliers,” according to the published agenda. CMS publishes its planned regulations twice yearly, and the agenda was updated in late 2017 for Fiscal Year 2018. To read the full agenda from HHS, click here.

MedPAC Analyses Show Shrinking Medicare Margins Across Providers

The Medicare Payment Advisory Commission’s January meetings last week focused on the major provider settings and their Medicare financials.

  • Hospital Medicare aggregate margins were -9.6% in 2016, according to MedPAC, and are expected to drop to -11% in 2018.  Click here for MedPAC’s presentation.
  • For post-acute settings – LTCH, home health, rehab and skilled nursing – MedPAC continued to discuss the move to a unified prospective payment system and allowing enough time for the transition.  Click here for MedPAC’s presentation.
  • MedPAC reviewed Medicare ACOs finding that two-sided risk models brought savings to the Medicare program, unlike the MSSP Track 1 where Medicare savings were generally not achieved.  Click here for the slide deck.
  • Medicare Advantage enrollment grew 8 percent in 2017 and now covers 19 million people or 32% of all Medicare enrollees, according to a MedPAC analysis.  Click here to review MedPAC’s slide presentation.
  • For all other MedPAC slide presentations, click here.

HHS Nominee Blames High Drug Prices on a Broken System, Supports Mandatory Demos The nominee to lead the Department of Health and Human Services on Jan. 9th blamed a broken pharmaceutical pricing system for the high cost of prescription drugs in the United States, but committed to working with lawmakers to help bring prices down. During a confirmation hearing before the Senate Finance Committee, Alexander Azar frequently invoked his HHS leadership roles during the George W. Bush administration. Azar was the agency’s general counsel and then deputy secretary. But he was also confronted with his record as president of U.S. operations for drug maker Eli Lilly & Co. Lawmakers pointed to examples of the company’s price increases on drugs to treat osteoporosis, heart disease and diabetes. Additionally, Azar told lawmakers he supports mandatory Medicare demonstrations in some circumstances and touted CMS’ innovation center as an important tool for testing Medicare reforms. Click here for Alex Azar’s second confirmation hearing before the Senate.

CHIP Reauthorization May Come as Early as this Week

With the new CBO report that states that extending CHIP funding six or more years actually saves money, and 10 years of funding would save $6 billion over the 10-year budget window, lawmakers are discussing 6 and 10-year authorizations. CHIP has broad bipartisan support, and both parties agreed on CHIP policy even when it was estimated to cost more than $8 billion to fund for five years. Leaders have indicated that they could work on a long-term bill as soon as this week as a stand-alone bill without the Medicare Extenders package. To read the CBO report, click here.

  • At least 10 states and the District of Columbia would exhaust all of their CHIP funding by the end of February, according to a new report from the Georgetown Center for Children and Families, click here.

CMS Announces New Voluntary Bundled Models: BPCI Advanced CMS last week unveiled a voluntary Bundled Payments for Care Improvement Advanced demonstration that requires participants to take on financial risk and includes outpatient and inpatient episodes of care. The pay demo will count toward the 5 percent provider bonuses in the new provider pay system. BPCI Advanced includes 32 types of clinical episodes, adding three outpatient episodes to the inpatient ones in the previous model. The episodes last 90 days. Participants may waive the requirement that Medicare beneficiaries spend 3-day SNF rule and geographic area requirements for Medicare coverage of telehealth. For the CMS fact sheet, click here.

HHS Issues Controversial Medicaid Work Requirement Guidelines HHS last week announced new guidelines for states wanting to mandate that tens of thousands of low-income adults join jobs programs or risk not being eligible for Medicaid. At least 10 states, including Kentucky, Arkansas and Indiana, have asked the federal government for permission to establish work requirements for so-called “able-bodied” adults in Medicaid. When determining who should have to meet work requirements, CMS stated that states should consider such things as areas of high unemployment and people caring for young children or elderly family members, among other factors. Certain groups should be exempt, including people who are disabled, the elderly, children and pregnant women, according to CMS. Click here for CMS’s letter on the Medicaid work requirement guidelines.

  • Following the new guidelines announcement, the state of Kentucky secured the first-ever Medicaid waiver that will require some low-income recipients to work. Click here to read the CMS approval letter.

Allowable Costs for Vets Seeking Emergency Care in Community Expanded The U.S. Department of Veterans Affairs announced new regulations last week expanding the reimbursable treatment for Veterans who seek emergency care at private providers in their community. The VA has been working to catch up on their much-delayed payments to community providers, and this increase of emergency care coverage follows the VA’s  initiatives to expand care accessible to Veterans in or near their home communities. The new regulations are immediately in effect and apply to claims pending with the VA as far back as April 8, 2016. Read the press release click here, and more information on the VA emergency care coverage click here.

Hospitals Push for Delay in DSH Payment Cuts In a letter to Congressional leadership last week, America’s Essential Hospitals requested a two-year delay in the scheduled cut to disproportionate share hospital payments. The group states in the letter that a “delay ensures our hospitals can continue to care for the most vulnerable among us.” The House has an amendment that would delay the cuts for two-years by tacking on additional years. The cuts became effective as of Oct. 1, 2017. Click here for the letter.

Report: Health Spending Grows at More Sustainable Rate

U.S. health sector spending continues to grow at a more sustainable rate, driven in part by a slowdown in hiring, hospital spending, and price growth in hospitals, physician and clinical services, and prescription drugs, according to new reports from the Altarum Institute. These factors, combined with an expanding economy, account for the health care sector holding steady at 18.0% of GDP in November. Click here for details.

  • Health care just became the U.S’s largest employer.  Click here.

NIH Study Shows Increase in Alcohol-Related ED Visits

A recently published NIH study found that the number of alcohol-related visits to U.S. emergency departments has increased by over 60 percent between 2006 and 2014, especially among females and drinkers who are middle-aged or older. The data also showed that total annual costs of alcohol-related visits increased from $4.1 billion to $15.3 billion during this time. Although men account for more alcohol-related ED visits than women overall, the rate of visits increased more among females than males over the study period. Click here for the press release from NIH, and here for the study abstract.

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