20 Jan January 20, 2020

MedPAC Says Increase Hospital Pay 2%, Decrease Home Health 7%, Inpatient Rehab 5%
The Medicare Payment Advisory Commission made recommendations last week for hospitals, physicians, and post-acute care facilities for FY21 increases and reductions in Medicare payments. For inpatient hospitals, MedPAC recommended a 2 percent increase over 2020 rates. Commissioners had an intense discussion about hospital closures, which led to a promise to to continue the discussion at an upcoming meeting. Commissioners also pledged to put hospitals under the microscope for value and cost growth like they do for independent physicians. MedPAC did not recommend changes to physician payments; however, commissioners requested that a survey of physician expenditures be conducted soon to add to future updates. In post-acute care, MedPAC recommended to eliminate the update for skilled nursing facilities, reduce payments for homes health agencies by 7 percent and cut  inpatient rehabilitation facilities by 5 percent.  The Commission recommended an increase of 2 percent for long-term acute care hospitals.  MedPAC also recommended that ambulatory surgery centers have their 2021 update eliminated and that they provide CMS with cost reports similar to hospitals. The following slide decks are from MedPAC’s meetings last week:

• Hospital in-and-out patient, click here.
• Physician payments, including MIPS, click here.
• Post-acute payments, click here.
• ASCs and Hospice, click here.

A new analysis by the Urban Institute says emergency department physicians have had the highest pay raises among the specialties with a 21.9 percent increase from 2013-2017.  Doctors in general saw a 16.1 percent pay raise over the period, click here.

Judge Allows New Liver Transplant Policy To Take Effect
A federal judge has cleared the way for a new method of distributing livers to transplant patients, a plan that will shift more of the organs to people in metropolitan areas where demand is highest and away from some rural regions. U.S. District Judge Amy Totenberg refused last week to permanently block new rules for allocating livers that were approved by the federal government in December 2018. In response to a lawsuit, she temporarily halted the plan in May while she considered a request for a permanent injunction. Click here for the report.

HHS Expected To Release Regs Allowing States To Convert Medicaid To Block Grants
The Trump administration plans to release guidance as soon as this month for granting states waivers to convert Medicaid funding to block grants, according to two people familiar with the matter, paving the way for a transformation of the 55-year-old program that is likely to reignite a partisan feud. The impending release comes as a surprise after the Office of Management and Budget, which reviews regulatory actions, indicated in November that block-grant instructions had been withdrawn. Click here for the Wall Street Journal report.

Still No Congressional Deal on Surprise Billing; Ways and Means Tries a Different Approach
The Chairman and Ranking Member of the House Ways and Means Committee are creating legislative text from the one-page summary the Committee released late last year which contains major differences from the “deal” that was struck between other Senate and House Committees. The Ways and Means plan moves closer to an approach preferred by hospital and physician groups nervous about any compromise that could favor health plans.  Providers oppose plans that would create a rate setting policy for out-of-network health bills. Click here for the one-page Ways and Means document.

MedPAC Probes 340B Financial Incentives for Hospitals
The Medicare advisory panel last week looked at how the the 340B Drug Pricing Program creates incentives for hospitals to use more expensive drugs. MedPAC found that some studies suggest an increased incentive for 340B program hospitals to select higher-priced drugs and examined treatment of five types of cancer (breast, colorectal, prostate, lung, leukemia, and lymphoma), the average cancer drug spending per month, and the beneficiaries at 340B hospitals, non-340B hospitals, and physician offices. Staff used data from before CMS’ 340B payment cut in 2018.  It showed evidence of higher spending at 340B hospitals for prostate and lung cancer, only two out of the five cancer types, and found that an increase in hospitals was not statistically significant in effecting cancer drug spending. The final report will be made public in March 2020. Click here for the MedPAC presentation slides.

ACA Silver Plan Costs Drop in 31 States; Medicare Direct Contracting Coming; Part D Doughnut Hole Closes
The premiums for the lowest-cost silver-tier plans on the ACA marketplace exchange dropped in 31 states for 2020 coverage, with an average decline of 3.5 percent for non-smoking 40-year-olds, according to analysis by the Urban Institute. The average premium for the cheapest silver plan – the most competitive among ACA exchange plans – experienced an almost 30 percent spike in 2018 followed by a 0.4 percent drop last year. A recent AHRQ report shows the average annual healthcare premiums in 2018 for single coverage, employer-sponsored plans were significantly lower than the national average of $6,715 in 14 states: Alabama, Arizona, Arkansas, California, Colorado, Hawaii, Idaho, Kansas, Michigan, Mississippi, Nevada, North Carolina, Tennessee and Utah. Click here for the Urban Institute analysis, and here for the AHRQ report.

• America’s Health Insurance Plans trade association filed a brief asking the Supreme Court to hear a case challenging the Affordable Care Act, siding with Democratic House lawmakers and state attorneys general in their efforts to protect the law, click here.
• UnitedHealth Group Inc. reported fourth-quarter earnings of $3.54 billion, an increase from $3.04 billion in the year-ago period, click here.
• A former insurance executive discusses the dangers of the insurance industry-invented “Choice” talking point that is being rehashed in the Presidential debates, click here.
• CMS’ Innovation Center will host a Direct Contracting Payment Part 2 Webinar on January 22, 2020 to provide additional information on the Direct Contracting model’s payment methodology, click here.
• TikTok, an app known primarily for frivolity, has helped people save thousands on hospital bills by offering a simple tip from one user: “Ask for an itemized bill!” For the story in the New York Times, click here.
• The Medicare Part D doughnut hole has closed. About 46 million people are enrolled in Part D. The doughnut hole, more formally called the coverage gap, has been one of Part D’s more detested features since the drug benefit took effect in 2006. Click here for details.

House Committee Focuses on Meth; Members Question Opioid Manufacturers
At a hearing in the House Energy and Commerce Committee last week, Members raised concerns regarding the growing number of overdose deaths linked to methamphetamines, as some state officials urged more resource allocations from Congress to tackle drug problems beyond opioids. While overall overdose deaths are down, meth-related deaths have increased 21 percent between 2017 and 2018, according to preliminary CDC data. Also, Committee republicans sent letters to opioid manufacturers – Insys Therapeutics, Mallinckrodt Pharmaceuticals, and Purdue Pharma – seeking answers on their practices leading up to the national opioid crisis, including their interactions with the FDA. To view the hearing and read prepared testimony, click here, and for the letters sent to manufacturers, click here.

• A new analysis of FDA drug approvals from 1983 through 2018 finds the agency is increasingly approving new drugs with fewer clinical trials, click here.
• The Drug Enforcement Agency released a strategic plan to prevent drug use among college students as the age group continues to be a significant concern due to the usage rates for illegal substances, click here.

HHS’ Health IT Strategic Plan Will Require More Patient Access
The HHS Office of National Coordinator has released a draft five-year strategic plan for health information technology that details broad goals for federal agencies and departments investment in health IT, with the most emphasis on encouraging increased patient access to their own health data. The plan also looks to motivate more than 25 federal organizations to support population-level health data transfer to researchers and public health groups. The plan is open for comment through March 18th. Click here for the fact sheet, and here for the draft plan.

House Subcommittee Focuses on Marijuana; Agencies May Change Policies on Related Products 
The House Energy and Commerce Health Subcommittee held a hearing last week on federal cannabis policies. Interestingly, most committee members voiced openness to more research into the medical benefits of marijuana as more states offer different levels of legalization. During the hearing, DEA Senior Policy Advisor Matthew Strait said draft regulations had been completed and submitted to OMB for researchers who want to grow marijuana. Due to major gaps in research, the FDA is considering collecting data on cannabidiol – known as CBD – after it was decriminalized by the 2018 farm bill. There is increased urgency for the agency to regulate CBD products as they flood the marketplace. To view the hearing and read prepared testimony, click here.

CMS Combining Psychiatric Hospital and Hospital Evaluations
To better identify systemic quality issues, CMS is integrating the psychiatric hospital program survey into the hospital program survey. Currently,  psychiatric and hospital programs are reviewed separately for compliance with the Conditions of Participation.  Training will be developed to provide the necessary competencies for all State Survey Agency surveyors to evaluate compliance with the psychiatric hospital Conditions of Participation. Once the psychiatric program is moved to the hospital program, the hospital survey team will assess compliance with all requirements in psychiatric facilities. This will not change the surveyor training or experience requirements. Click here for the CMS news release.

Study: ACA Narrowed Racial and Ethnic Disparities in Insurance Coverage
Not only has the Affordable Care Act decreased racial and ethnic disparities in coverage it also reduced disparities in access to health care among black, Hispanic, and white adults, according to new study released by the Commonwealth Fund. For instance, the gap between black and white adult uninsured rates dropped by 4.1 percentage points, while the difference between Hispanic and white uninsured rates fell 9.4 points. Additionally, disparities narrowed in both states that expanded Medicaid eligibility and in those that did not, as the insured rate for black adults in Medicaid expansion states is higher than white adults in non-expansion states. To read the full report, click here.

• CMS is requesting information on  best practices for the coordination of care from out-of-state providers for Medicaid-eligible children with medically complex conditions, click here.
• The House Education and Labor Committee passed H.R. 2694, the Pregnant Workers Fairness Act that would eliminate discrimination and protect women in the workplace by ensuring reasonable accommodations while limited by pregnancy, childbirth, or related medical conditions, click here.

Quality Issues with Surgical Gowns May Mean Delayed Surgeries 
The FDA followed reports last week of surgical gowns and packs by Cardinal Health that had potential quality issues affecting some, but not all, of its Level 3 stock. The FDA ultimately determined that all procedural packs that include gowns, and the gowns themselves, should immediately be discontinued as they cannot be determined to be sterile. The sudden decrease in inventory will likely impact patient care at numerous healthcare facilities until supplies can be replenished or determined sterile. Click here for the latest FDA news release.

• The lead aprons used in x-rays may be unnecessary, according to a new report as various hospitals have stopped covering reproductive organs and fetuses during x-ray exams because the aprons may cause impaired diagnostic tests and at times inadvertently cause more radiation exposure, click here.

New SARS-like Virus May be Spreading Outside China; US Airport Screening Starts 
According to the World Health Organization, a new coronavirus, which infected 41 people in the Chinese province of Wuhan, may have spread beyond the Chinese borders. Public health officials fear that this new virus is 80% genetically similar to the SARS virus, which also originated in a Chinese city market and caused a global pandemic in 2003-04. A woman identified from Wuhan while visiting Thailand has been closely monitored, as well as 182 other individuals that she encountered. A Japanese man who visited Wuhan has also been diagnosed with this new coronavirus. Click here for WHO’s statement.  The US will start screening visitors from China at US airports, click here.

A Quarter Of Kids With Autism Go Undiagnosed: Study 
According to a new study based on data from the CDC, 25% of children who meet the criteria for autism never receive a diagnosis. There is also a large racial and ethnic disparity in this data, particularly for Hispanic and black children, who constituted the majority of the undiagnosed autistic children found in the study.  The authors said the disparity may be due to reasons such as communication or cultural barriers. The authors concluded that better screening and other steps are needed to reduce disparities. For the study, click here.

Even With New Generics, MS Drug Prices Have Tripled in 7 Years 
A new study has found that prescription drug prices have continued to rise despite calls from both sides of the political aisle for pharmaceuticals to lower prices over the last several years. This increase has especially affected those suffering from long-term chronic illnesses such as Multiple Sclerosis. Experts say that this steady increase is due to the market preference for the use of Copaxone, the most common drug treatment, rather than its generic alternatives. New generics introduced to the market have done little to reduce pricing. Because Copaxone’s dosage requires few overall injections it continues to be in higher demand. Click here to read the full study.