July 16, 2018

Azar Seeks Deep Cuts to 340B Discounts; House Committee Clashes Over 340B Future

HHS Secretary Alex Azar reportedly told a gathering of key lawmakers and staff late last week that the 340B drug discount to providers should be standardized to 20 percent, according to a report in Modern Healthcare (click here).  Providers usually receive a discount of 40 to 60 percent under the program.  Several lawmakers reportedly told Azar that they would oppose deep cuts on Critical Access Hospitals and other struggling hospitals.  On Wednesday, the Energy and Commerce Health Subcommittee held a hearing on 15 different 340B bills and heard testimony from GAO on its recent report on contract pharmacies. Click here to view the bills, see the hearing and read the testimony. One of the bills, by Rep. Joe Barton (R-TX), would raise the minimum DSH adjustment percentage that DSH hospitals must meet to qualify for the 340B program.  An analysis (click here) shows that more than half of the disproportionate share hospitals currently participating in the 340B drug discount program would lose eligibility under a plan on the table in Congress.

  • The House Appropriations Committee approved the Labor-HHS Appropriations bill last week, which would increase funding for the oversight of the 340B program while calling for HRSA to implement the House Energy and Commerce recommendations. Click here for the bill report (language starts on page 31).
  • Meanwhile, a PhRMA backed website released its own analysis of the recent GAO report. PhRMA smacks 340B providers hard. Click here.

CMS’ Physician Payment Rule Increases Telehealth, Cuts New Drug Payments; Changes QPP

CMS’ annual physician payment update was released late last week with several proposed changes to physician reporting requirements, an increase in telemedicine, cuts to physician payments for new drugs, and broader access to alternative physician payment programs. A notable change is the proposed cut to payment for new drugs, which are reimbursed at a rate calculated on their wholesale acquisition cost, by 3 percent during the first quarter of sales when the average sales price is unavailable. The rule also proposes reporting changes to the Quality Payment Program as well as coding and payment changes to evaluation and management visits. Click here for the 1400+ page rule, and here for the CMS fact sheet.

  • A new report from the Center for American Progress says that Medicare relies far too heavily on recommendations submitted by the American Medical Association’s Relative Value Scale Update Committee (RUC) when setting payment amounts for different physicians’ services.  Click here.

AG Announces $6 Billion Program Targeting Synthetic Opioids

Attorney General Jeff Sessions has announced the creation of Operation Synthetic Opioid Surge (S.O.S.) aimed at reducing the supply of synthetic opioids like fentanyl as part of the Administration’s efforts to combat the opioid crisis. The $6 billion program will specifically be used in high impact areas around the country and to identify wholesale distribution networks and international and domestic suppliers. The plan will launch an enforcement surge in ten districts with some of the highest drug overdose death rates with federal prosecutors in the ten districts, in eight states to ramp up prosecutions against synthetic opioid dealers. Click here for the announcement.

  • The Drug Enforcement Administration finalized a rule last week that give the agency power to lower manufacturing quotas of opioids if it believes that large amounts are being diverted for misuse, click here.
  • In a new report, Senator Claire McCaskill (D-MO) found that distributors have repeatedly failed to report suspicious opioid orders, click here.
  • Senators voiced concerns of the handling of the opioid crisis during the confirmation hearing of the candidate to lead the Office of National Drug Control Policy, James W. Carroll, who highlighted a three pronged approach to  the epidemic. Click here.

House Committee OKs New Uses for HSAs, Renews Children’s GME

After a long debate and votes for two days last week, the House Ways and Means Committee advanced 11 health related bills. The legislation included bills that would allow some certain over-the-counter medications to be counted as qualified medical expenses, increase the contribution amounts to health savings accounts, and allow carry over of excess funds in flexible spending accounts to the following year. A more controversial measure would allow the use health savings accounts to pay for gym memberships and other similar athletic pursuits.  Opponents argue that the bill will reward higher earners for recreational activities they would pursue anyway. For a full list of bills and to watch the debate, click here.

  • The House Energy and Commerce Committee also marked up several health bills on Thursdayincluding renewing children’s hospital graduate medical education programs, reauthorizing nursing workforce development programs, and creating grants to improve the training of health professionals in palliative care, among others, click here.

CDC: 85% of Women Give Birth by Age 44

According to a new CDC report on U.S. fertility rates between 2011 and 2015, just over half of women are in their 20s the first time they give birth. And by age 44, 85 percent of women have given birth. About 63 percent of men were in their 20s the first time they fathered a child. Roughly 80 percent have fathered a child by age 44. One-third of women give birth again within three years of their first birth. Another one-third of women have a second birth more than three years after their first birth. Click here for the full report.
CMS Plans To Cut Payments to ACA Navigators for Second Year

CMS last week detailed plans to cut funding to groups that help people sign up for health coverage. It’s the second straight year those programs will be cut.  CMS said the Funding Opportunity Announcement (FOA) for the Federally-facilitated Exchange (FFE) Navigator Program for plan year 2019 will be up to $10 million for a 1-year period of performance with a minimum of $100,000 to be awarded in each of the 34 FFE states. CMS explained that the ACA insurance marketplaces are better established now than in previous years and that navigators historically have enrolled just a fraction of customers. Click here for the CMS announcement.


Seniors Enrolled in MA Plans Less Likely to Visit Emergency Room

Seniors enrolled in traditional fee-for-service Medicare, rather than private Medicare Advantage plans, have 33 percent more emergency room visits and nearly 23 percent more hospital stays, according to a new Avalere report. The authors state that MA  plans have successfully kept seniors out of the hospital and ER by focusing heavily on preventative care. To read more on the report, click here.


House Committee, CMS Seek Stark Law Reform

On Tuesday, July 17th, the House Ways and Means Committee will hold a hearing entitled, “Modernizing Stark Law to Ensure the Successful Transition from Volume to Value in the Medicare Program.” The Committee states that it will be looking at the need for and possible solutions for modernizing the physician self-referral law. Specifically they are looking at how to increase the ability of Medicare to successfully move to a system that rewards higher value, coordinated health care over volume. The hearing comes shortly after CMS’ call for input from stakeholders on how they can reduce the regulatory burdens of the Stark Law – comments are due on August 24th. Click here for the hearing information and here for the fact sheet on the CMS request.


FDA Creates Task Force to Tackle Drug Shortages

FDA Commissioner Scott Gottlieb has announced the formation of a task force to address vulnerabilities in national stockpiles of basic medicines. The purpose of the group will be to, “delve more deeply into the reasons why some shortages remain a persistent challenge.” Members of the Task Force, including representatives from both CMS and the VA, will assess whether creating a critical drug list would be beneficial and if reimbursement policies should be changed in order to encourage manufacturers to keep producing low-profit, essential drugs. Gottlieb said the task force will also seek input from the pharmaceutical and health care industries, patient representatives, our federal partners and Congress. For the full announcement, click here.


Medicaid Managed Care Organizations Have Weaknesses in Combating Fraud and Abuse: HHS IG

According to an HHS Inspector General report released last week, Medicaid Managed Care Organizations have major deficiencies when it comes to their efforts to identify and address fraud and abuse. Specifically, the IG looked at the rapid expansion of MCOs and raised concerns that program integrity is not getting proper attention. The IG found that MCOs would take action against fraud at times but did not inform the States and did not always identify and recover overpayments, including those associated with fraud or abuse. Recommendations for improvement included increased reporting requirements and additional monitoring by State agencies. Click here for the summary and report.

  • Medicaid managed care enrollment continues to increase because of expansion.  Click here for details.

FCC Considering $100 Million for Telehealth Program
FCC Commissioner Brendan Carr and Senator Roger Wicker (R-MS) detail in an op-ed the plans for an August 2nd vote by the FCC on the Connected Care Pilot Program. The program would utilize Universal Service Fund dollars to assist low-income Americans in having access to telehealth services outside of provider facilities. This program could be the next step to improving telehealth in rural America; the FCC recently supported increasing the Universal Service Fund’s Rural Health Care program which provides money to health care providers to improve broadband services. Read the op-ed here.

  • The Critical Access Hospital Coalition advocates for CAHs in federal programs such as the FCC’s Rural Health Care program. Read the CAH Coalition’s comments to the FCC here.

Educational and Geographic Factors Play Large Role in Cancer Risk
A recently released American Cancer Society study found that that almost one‐fourth (22 percent) of all cancer deaths would not occur if all Americans had the same cancer mortality as college-educated Americans. The study focused on the influential role of non-medical disparities in cancer mortality among populations categorized by race/ethnicity, economic and educational level, or region of residence. Applied to 2018 projections, 134,000 of the 610,000 expected cancer deaths would not occur if all Americans had the same levels of exposure to risk factors and received the same quality of care as college graduates. The study also found substantial differences in cancer mortality between states and regions that generally parallel differences in socioeconomic and racial demographics. Lung cancer has the greatest geographic disparity, with mortality rates ranging from 67.7 per 100,000 in Kentucky to 19.5 per 100,000 in Utah. To view the entire study, click here.

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