26 Mar March 26, 2018

March 26, 2018

HHS Defends 340B Regulation that Cuts Payments 

In court filings last week, HHS argued that its 28.5 percent  340B drug payment reductions in the outpatient payment rule “were justified by developments in the market” due to the program’s over-expansion. Additionally, HHS stated that it already increased payments for non-drug items and services by 3.2% as a direct result of the $1.6 billion in reduced payments for 340B drugs. “Setting aside the final rule for 2018 would direct payments away from these other services while creating administrative havoc in the OPPS system,” the agency said. To read the HHS arguments, click here.  Click here for the press report.

• A Health Affairs blog details the original purpose of the 340B program and how hospitals are fulfilling that purpose, click here.
• A different opinion piece in STAT says “340B is a well-intentioned drug discount program gone awry,” click here.
• The board of directors for 340B Health announced last week that Ted Slafsky would step down from his role as CEO of the association, click here.
• Residents of rural America are increasingly struggling from the closure of pharmacies and drugstores, “924 independently owned rural pharmacies (12 percent of the total) had gone out of business in the previous 10 years,” click here.
• Kaiser poll finds that 72 percent of Americans think that drug firms have too much influence in Washington, click here.
• The Trump administration overturned an Obama-era policy aimed at promoting lower drug prices that rewarded physicians with larger profits if they used the lowest-price biosimilars, which are generic-like copies of brand-name biologic drugs. Click here for the WSJ report.

CMS Administrator Provides Peek into Future Agency Actions

CMS Administrator Seema Verma last week met with reporters to discuss the future of the agency. Verma said her highest priority is to make Medicare sustainable and that she would be looking at areas to better address patients’ expectations. She said to expect news soon on drug prices, that telehealth expansion should not be limited to rural areas and that CMS will “double down” on price transparency in the health care system. Verma said drug-price developments will likely surface in the Medicare Advantage and Part D rule and CMS will reduce burdens on providers by shrinking their reporting requirements and changing conditions of participation. Click here and here for more.

Omnibus Spending Package Includes Billions More for Health Care

The $1.3 trillion government spending bill was signed by the President Friday, averting a government shutdown and funding the government through September 30, 2018. The legislation, H.R. 1625, comes more than six months into the current fiscal year, that  includes $88.1 billion for HHS, a $10 billion boost over fiscal 2017. The 2,232 page bill includes a number of provisions boosting health care funding and expands programs aimed at addressing the opioid epidemic, and expanding the use of telehealth as well as targeting funds for public health preparedness, medical education programs, and mental health services. Click here for the bill text, and here to view the summaries of funding for each of the sections of the bill.

• The effort to stabilize the individual insurance market through the ACA exchanges fell apart and a fix is not included in the final spending package.  Click here for details.

House Committee Holds Multiple Hearing on Opioid Crisis

The House Energy and Commerce Committee held hearings last week on the opioid crisis, reviewing twenty-five bills and hearing from almost as many witnesses from both the government and private sector. During the two hearings, members of Congress vigorously debated whether to loosen privacy protections for medical records related to substance abuse treatment. An earlier hearing, in the Oversight and Investigations Subcommittee, there just one witness, Robert Patterson, the Acting Administrator, Drug Enforcement Administration. He testified on the DEA’s role in the crisis and discussed technology could have helped to prevent the “pill dumping” in West Virginia. Click here for the legislative hearing and here for the O&I hearing.

Popular ACA Plan Premiums to Increase Dramatically this Year: Analysis

According to a new report by researchers at the Urban Institute, premiums for some of the most popular Affordable Care Act insurance plans will go up by nearly a third this year. The study shows that the average monthly premium for the cheapest silver plan for a 40-year-old nonsmoker was $444 this year, up from $342 in 2017. However, premium increases for the higher level gold plans were not as significant with an average monthly premium increase of 18 percent from $439 to $518. Iowa, Kentucky, Georgia, New Hampshire, New Mexico, Utah, Virginia and Wyoming had the biggest impacts with increases of more than 50 percent for silver plans. The study states that a main driver for the premium increases was from the Administration’s decision to cut off cost-sharing reduction payments leading to insurers raising rates to compensate for the shortfall, often by around 20 percent. To read the full report, click here.

• Health insurers profited due to the ACA last year thanks to charging higher prices and receiving more government funding, according to a report by the White House’s Council of Economic Advisers, click here.

CMS Innovation Center Being Scaled Back; CMS’ Medicare Chief Underscores ‘Value’

Under the Trump Administration the CMS Innovation Center has received minimal attention and has been losing top staff. Over the past year, the office has eliminated or scaled back a number of Obama-era projects that Republicans and providers complained were too onerous and the office has done little to put into action new ideas for improving care and tackling health care costs. Most recently, seven accountable care organizations from the Next Generation ACO Model program departed leaving 51 ACOs participating in the program. Four of the seven ACOs indicated they decided to withdraw because changes made to the model’s design, including the chosen risk adjustment, would directly hurt their ability to make money in the program. Officials at HHS have indicated that they may use the Center to tackle drug prices as well as new models for paying for prescription drugs and physician specialties. To view the latest on the CMMI website and see all of the models currently running, click here. In the first few months of 2018 a few of the programs have added new participants –

• Next Generation ACO Models, click here
• Comprehensive Primary Care Plus, click here
• Oncology Care Model, click here

CMS’ Medicare chief Demetrios Kouzoukas testified last week in front of the Ways and Means Committee and said the agency remains committed to moving from “volume to value.” Click here for the story. Click here for his testimony.  Click here to see the hearing.

Breast Screening Less Often in ACOs:  JAMA

Women older than 75 received breast screening less often after they enrolled in an accountable care organization (ACO), found a study published online March 19 in JAMA Internal Medicine. Click here for the report.

Many Medicare Claims for Outpatient Physical Therapy Are Not in Compliance: HHS OIG

In a report released last week, the HHS Office of Inspector General stated that sixty-one percent of claims for outpatient physical therapy services that they reviewed were not in compliance with Medicare rules on necessity, coding, or documentation. Of the 300 claims that the OIG reviewed, therapists claimed $12,741 in Medicare reimbursement on 184 claims that did not comply with Medicare requirements. Based on this review, the OIG estimates that, during the 6-month audit period, Medicare paid $367 million for outpatient physical therapy services that did not comply with Medicare requirements. Click here for the report.

CMS to Release Instructions on CAH ER Physician Availability Cost CMS is expected to release updated guidance to Medicare Administrative Contractors regarding their review of emergency room physician availability costs at critical access hospitals. Recently, a number of MACs were disallowing CAH ER physician availability costs stating that they were not providing “evidence that the provider explored alternative methods for obtaining emergency physician coverage before agreeing to physician compensation for availability services.” The CAH Coalition in Washington worked with stakeholders and found guidance from Noridian Health Care Solutions in California that said “CMS has indicated that if this criterion was the only requirement not met, the contractor should not disallow the availability cost.” CMS agreed with Noridian’s assessment and will be releasing guidance to all MACs by the end of April 2018. For more on Noridian’s guidance, read online here.

• Rural hospital closures are forcing many communities to take more creative steps to meet their health care needs.  Click here.
• Citing U.S. Census data, Pew Charitable Trusts is reporting that a few long-declining small towns and farming and manufacturing counties are adding people as population growth in large cities cools, click here.
• The CAH Coalition works to provide clarity for CAHs when there are variations between regions and auditors regarding allowable costs. For more on the CAH Coalition, click here.

Physicians Employed by Hospitals Growing Rapidly

The number of physicians employed by hospitals grew by 14,000 between July 2015 and July 2016, representing nearly 11% growth, according to a new report. The trend goes hand-in-hand with the rising number of hospitals that are buying physician practices—a whopping 5,000 transactions during the same period.  Click here for the analysis.

Medicare Advantage Enrollment Continues Steady Growth

As of February 1, 2018, total Medicare Advantage membership stood at 21,079,661 with a net gain of 1,486,320 members, year-over-year. MA plans remain appealing to the senior population as these plans often provide extra benefits and services at lower costs over original Medicare. The large number of Baby Boomers entering retirement each day is rapidly rising and insurers have become more and more dependent on Medicare Advantage business for increases in enrollment, revenue and profits. Click here for the analysis of the growth in MA.

Report: Hospitalizations Can Result in a Permanent Financial Setback

New research shows that for a substantial fraction of Americans, a trip to the hospital can mean a permanent reduction in income. Some people bounce right back, but many never work as much again. On average, people in their 50s who are admitted to the hospital will experience a 20 percent drop in income that persists for years. Over all, income losses dwarfed the direct costs of medical care.  Click here for the report.

Hospitalizations Down, Costs Up: AHRQ

The number of hospitalizations involving operating room procedures decreased from 11.1 million in 2011 to 10.1 million in 2014. Total costs for those hospitalizations, however, increased from about $185 billion to $187 billion.  Click here for the report from the Agency for Healthcare Research and Quality.

FDA Looking to Regulate Premium Cigars

In an advanced notice of proposed rulemaking last week, FDA requested feedback to help to determine how they could regulate premium cigars. Specifically, the agency would like public comment and new research regarding the definition of premium cigars, as well as their use patterns among young adults and consumer perceptions of their health risks. This notice is its third effort in new year to curb tobacco use through increased oversight over products, such as reducing nicotine levels in cigarettes and examining whether to limit flavors in tobacco products. The agency will solicit submissions for 90 days. To read the notice, click here.

Study: Loud Workplaces Associated with Heart Disease According to data analyzed from National Health Interview Survey, hypertension, elevated cholesterol, and hearing difficulty are more prevalent among noise‐exposed workers. Researchers evaluated the level of association between workplace noise exposure and heart disease. The results said that 25 percent of current workers had a history of work-related noise exposure and 14 percent were exposed in the last year. In addition, 12 percent of workers experienced difficulty hearing, 24 percent had high blood pressure and 28 percent had high cholesterol. Industries with the highest prevalence of occupational noise exposure were mining (61 percent), construction (51 percent) and manufacturing (47 percent). Click here for the study in the American Journal of Industrial Medicine.

Cutting Calories by 15% a Day Increases Lifespan Among Adults

In a study that focused on CALERIE (Comprehensive Assessment of Long-term Effects of Reducing Intake of Energy), researchers at Pennington University, Washington University, and Tufts University found that Calorie restriction has been shown to have health benefits and to extend lifespan. The study focused on reducing calories by 25% through dieting. The results showed that participants lost an average of about 20 pounds each by the end of the first year and maintained that loss during the second year. The calorie-restrictive diet caused a reduction in sleeping metabolic rate by 10% after one year, which is linked to a longer lifespan. To read the full study, click here.