October 15, 2018

Major Medicare Rule Changes: Update

  • The 2019 Physician Fee Schedule is under review at the Office of Management and Budget and could be released in its final form as early as this week.  One of its key provisions is the collapse of Evaluation and Management payment codes, which is opposed by more physician groups.
  • The 2019 Outpatient Prospective Payment System is now under final review by OMB and not expected to be finalized until later this month.  One of its most controversial provisions would cut payments for HOPD clinic services.  According to a recent analysis, 200 hospitals would shoulder 73% of the cuts. Click here for that analysis.  Click here for the list of 200 hospitals.

A Federal Requirement for Drug Prices in Ads May Come This Week

The White House Office of Management and Budget has been considering a regulatory proposal put forward by HHS since August that would require pharmaceutical companies to post their list prices in direct-to-consumer advertisements. The rumors are flying that the that the proposal will be sent back to the Department and published sometime this week. Drugmakers have opposed the idea and worked to strip a similar proposal from a congressional funding package last month. However, the proposal is a key part of the President’s Plan to Lower Drug Prices. Click here for the pending notice.

  • The President signed a pair of bills last week aimed at more drug pricing transparency to prohibit “gag clauses” that prevent pharmacists from telling customers the least expensive way to buy their medicines – out-of-pocket or through insurance – Patient Right to Know Drug Prices Act (S. 2554) click here, and Know the Lowest Price Act (S. 2553) click here.

CVS-Aetna Merger Approved by Justice Department: What Does It Mean?

Transformation of health-care is well on its way with the approval of the $69 billion mega-merger of CVS Health Corporation and Aetna Inc. but first, Aetna must divest its Medicare Part D prescription drug plan. The merger will allow CVS to turn its locations into medical hubs for basic services. The deal combines CVS’ pharmacies with Aetna’s insurance business, blurring traditionally distinct lines in hopes of lowering costs. The DOJ also recently cleared health insurer Cigna’s acquisition of pharmacy benefits manager Express Scripts. Click here for more from the Justice Department.

  • “Why Health Systems Should Worry,” HealthLeaders, click here.
  • “Why the Aetna and CVS Merger Is So Dangerous,” The American Prospect, click here.
  • “CVS and Aetna merger a disruptive sign of the future,” Healthcare Finance News, click here.
  • “AMA Says CVS-Aetna Merger Will Hurt Patients,” Healthcare Analytics News, click here.

Analysis:  Major Insurers Have Their Own Challenges…From Employers 

Four of the nation’s largest managed care organizations may lose dominance in the employer health insurance market if they don’t innovate ways to compete with employers, according to a new analysis from a financial firm.  Leerink analysts said managed care companies like UnitedHealth Group, Anthem, Aetna and Cigna “have their work cut out for them.” Analysts added that “meaningful action would likely involve less cross-subsidization of the more lucrative and growing Medicare Advantage product through self-insured network contracting, and more innovative approaches and investments on both provider contracts and technology-enabled member engagement and analytics.”  Employer-sponsored health plans cover 155 million Americans, or nearly half of the U.S. population. Click here for this very detailed report.


State Medicaid Programs to Require Information on 340B Discounts; LA Has Creative Use of 340B

Two State Medicaid programs are requiring their hospitals to report which medications they purchased under the 340B Drug Discount Program by Nov. 1. Colorado and Mississippi claim this will help them to determine which drugs are eligible for rebates as 340B drugs are ineligible for the Medicaid drug rebate. Mississippi providers must identify 340B drugs on medical and retail pharmacy claims and Colorado hospital retail pharmacies must indicate if they provide only 340B drugs or no 340B drugs to Medicaid enrollees. For the MS requirement, click here and for CO, click here.

  • In a response to Louisiana’s Department of Health proposal to pay a subscription for expensive hepatitis C drugs, the Pew Charitable Trusts says states could use a subscription-based model to buy hepatitis C drugs without triggering the Medicaid best price law by routing the medications through 340B hospitals, click here.

Administration Touts More Competition in Marketplaces and Lower Premiums

Claiming credit, the Trump Administration announced last week that insurers will offer more plans on the ACA Marketplace Exchange and on average benchmark premiums will drop by 1.5 percent. Additionally, counties with only one insurer will be down to 39 from 50 in 2018. Benchmark premiums determine the level of premium subsidies and vary across the country – highest decrease, in Tennessee (26.2 percent) and highest increase, in North Dakota (20.2 percent). For the CMS fact sheet on insurance market conditions, click here, and for a state-by-state breakdown of the benchmarks, click here.

  • Senate Judiciary Committee Chairman Chuck Grassley has requested the FTC investigate contracts between insurers and hospital systems to determine whether they include provisions that protect hospitals, block competition, click here.
  • New analysis shows that the Administration’s “public charge” policies would likely drive down enrollment in Medicaid and CHIP by millions of people, click here.

Nearly 1,300 Providers Sign-up for New CMS Bundle Payment Model

About 1,300 entities have agreed to participate in the Administration’s first advanced alternative pay model, the Bundled Payments for Care Improvement-Advanced (BPCI Advanced) Model. CMS states that 832 acute care hospitals and 715 physician group practices that are located in 49 states and D.C. are participating in the model that was announced in January, and started Oct. 1. It is set to run through the end of 2023. Under the new model, participants can earn an additional Medicare payment if all expenditures for a beneficiary’s episode of care are less than a spending target, which factors-in measures of quality. The new model offers 32 bundles, three of which are for outpatient care. Click here for more on the model.


Following Medicare’s Lead, UnitedHealth to Require Beneficiaries to “Try” Step-Therapy

The nation’s largest health insurer, UnitedHealthcare, will use “step therapy” in some of its private Medicare plans next year, requiring patients to try cheaper drugs before trying pricey biologics and other costly medicines. The decision is among the first signs that insurers plan to take advantage of the Administration’s initiative that they argue will bring down drug costs for consumers. The recent policy change allows Medicare Advantage plans to use step therapy for Medicare Part B drugs that officials argue will give payers more flexibility and providers say it will lead to unnecessary red tape and more denials. Click here to view UnitedHealthcare’s step therapy program guide.

  • A bipartisan group of 103 House members sent a letter to CMS requesting the Agency tell Medicare Advantage plans not to use prior authorization to inhibit beneficiaries’ access to services, click here.

Report: There is Little Interoperability Between Hospitals

A new report released last week by the National Academy of Medicine shows that health care systems still are not able to exchange records electronically. Even though electronic health care records have come a long way, there still remains a failure of connectivity. The researchers state, “In contrast to many other industries, the purchasers of health care technologies have not marshaled their purchasing power to drive interoperability as a key requirement. Better procurement practices, supported by compatible interoperability platforms and architecture, will allow for better, safer patient care; reduced administrative workload for clinicians; protection from cybersecurity attacks; and significant financial savings across multiple markets.” Click here for the report.


HHS Upping Campaign Against Teenage Usage of E-Cigarettes 

HHS Secretary Alex Azar and FDA Administrator Scott Gottlieb last week continued their push to stop teenage usage of e-cigarettes. HHS ramped-up enforcement and investigations into how vaping companies promote their products, including seizing thousands of documents last month from the offices of Juul, the most popular e-cigarette company. However, agency leaders say that they are still optimistic that e-cigarettes could help wean millions of adult smokers off of tobacco. Azar and Gottlieb detail how they would like to limit marketing to reduce the devices’ appeal to youths, will look at reconsidering which e-cigarettes can actually remain on the market, and vow to investigate how the products are being marketed online, particularly to youths. Click here for more.

  • Report shows rate of new Connecticut high schoolers who have started using e-cigarettes has doubled over a two-year period, click here.
  • The American Cancer Society Cancer Action Network report shows increasing tobacco taxes are an effective way to prevent children from smoking and help adults quit, click here.

CMS Announces Premiums and Deductibles for Medicare Parts A and B

CMS has released the 2019 premiums, deductibles, and coinsurance amounts for Medicare Parts A and B. Part B covers physician services, outpatient hospital services, certain home health services, durable medical equipment, and certain other medical and health services not covered by Medicare Part A and will have a standard monthly premium of $135.50 for 2019, a slight increase from $134 in 2018. The annual deductible for Medicare Part B beneficiaries is $185 in 2019, an increase from $183 in 2018. Medicare Part A covers inpatient hospital, skilled nursing facility, and some home health care services.  The A inpatient deductible that beneficiaries will pay when admitted to the hospital is $1,364 in 2019, an increase of $24 from $1,340 in 2018. For the CMS fact sheet, click here.


CAH in Rural Georgia Saves Preemie During Hurricane Michael – Emphasizing Rural Need
Hurricane Michael’s devastation has put an additional strain on rural hospitals in the south. A Critical Access Hospital in Early County, Georgia, was running on backup generators during the Thursday morning storm. Despite impassable roads, a 27-week pregnant patient arrived at the hospital to give birth. The CAH had previously stopped providing childbirth services and did not have the equipment necessary to sustain a preemie’s health. Yet, the hospital was able to deliver the baby and transport her to a nearby hospital where both the mother and baby are doing well. Click here to read more.

  • The Critical Access Hospital Coalition advocates for Critical Access Hospitals in Washington, D.C.. Read more about the CAH Coalition here.

FDA Expands HPV Vaccine for Larger Age Group
The FDA announced it is expanding the use of the human papillomavirus (HPV) vaccine to men and women from 27 to 45 years old. The vaccine, which prevents cervical cancer, was previously only approved for minors and people up to age 26. The FDA approved this expansion based on a study that showed high success rates in preventing HPV of women ages 27-45 who received the vaccine. The vaccine, Gardasil 9, protects against nine strains of the virus and is recommended to young people before they become sexually active. Researchers are now studying the effectiveness of the vaccine on older people and is expected to make a recommendation to the CDC in the near future. For more from the FDA, click here.


Amazon’s Alexa May Soon Be Able to Tell If User Is Sick

Amazon may soon be able to anticipate if you are sick and recommend medicines that you could conveniently purchase from their site. Amazon has filed a patent for its virtual voice assistant, Alexa, that would give it the ability to analyze speech and identify signs of sickness (coughing, sneezing, etc.). Alexa would then automatically offer the purchase of medicines, cough drops, and other remedies as well as allow Amazon to have targeted ads for health products for the consumer/user. There is still a discussion around this software and the effects it will have for the users and their environments. Click here for more on the possible new Alexa abilities and here to view the patent.

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