07 Oct October 7, 2019

Trump Executive Order Seeks To Make Medicare Payment Rates More Competitive with Commercial Rates
President Trump signed an Executive Order last week aimed at strengthening Medicare and Medicare Advantage, supporting telehealth services and supplemental benefits offered by insurers, and ensuring that traditional Medicare is not promoted over Medicare Advantage. Among other mandates, the order:

• Tells HHS to find ways to make Medicare payment rates essentially comparable to commercial rates in an effort to increase competition. See Section 3(iii)(b). This could also mean Medicare payment rates should be cut to commercial rates, wherever that situation exists.
• Tells CMS to continue to expand site neutral payments policies that pay the same rate for the same services regardless of where the service is provided (i.e. hospital outpatient department, surgery center, physician office).
• Directs agencies to expand access to Medicare medical savings accounts.
• Directs HHS to design a payment model that would let Medicare Advantage beneficiaries share in the program’s savings, such as through cash rewards or monetary rebates.

Click here for additional analysis. The Administration views these initiatives as better alternatives to Medicare for All, a single payer system.  To read the order, click here.

CMS Transparency Rule Panned by Hospitals, Insurers but Supported by Consumer Groups
CMS received thousands of comments (click here to see them all) to its proposed rules issued in July that would require each hospital operating within the U.S. establish and make public a yearly list of the hospital’s standard charges for items and services provided by the hospital.  It requires the disclosure of commercial prices, even those that are privately negotiated between the hospital and an insurer. It also allows CMS to monitor hospitals to make sure they are complying with these rules, and to impose a penalty of up to $300 per day per hospital for non-compliance. The comment period on the rule ended September 27.  Hospitals and insurers were generally opposed to the requirements, while consumer groups favored the proposal. Hospitals stated that publishing their negotiated prices won’t help consumers, click here for more.

Speaker’s Drug Pricing Plan Could Nix 340B
The Lower Drug Costs Now Act of 2019 (H.R. 3), Speaker Nancy Pelosi’s (D-CA) plan to bring down pharmaceutical prices, contains a section that could make it impossible for hospitals to get a 340B discount for any drug that is negotiated by Medicare. The 60-word provision would prevent 340B designated hospitals from getting a savings from the drugs they buy because they would no longer be able to buy them at a cheaper price and be reimbursed at a higher rate. Rather, these providers would get the same negotiated price and reimbursement amount as non-participating providers. Sec. 1196(d) could lead to 340B hospitals losing billions in savings from the program, however it is unclear if that is the intended purpose behind the section. Click here for the bill.

• The White House Council of Economic Advisers released a report last week on prescription medicines that claims U.S. drug prices are on the decline, click here.

Key House Committee’s Surprise Billing Plan Kicks the Solution To Government Agencies
House Ways and Means Committee Chairman, Richard Neal (D-MA), has released a proposed plan that will not hold patients responsible for surprise bills; however, to create a process for how much providers will be paid, the plan proposes a “negotiated rulemaking” process put together by a Commission that will include the Departments of Health and Human Services, Labor, and Treasury as well as various industry stakeholders. In a letter to Democrats on the committee detailing the plan, Neal points to the success of clinical lab fee schedule and the durable medical equipment competitive bidding process, both of which providers argue inadequately pay and limit supplies in rural areas. The overall framework would be left up to federal agencies to identify rates for surprise bills, as opposed to bills already approved by two other House and Senate committees that either set rates by a regional out-of-network benchmark or allows for limited arbitration. To view the Chairman’s letter, click here.

• Air ambulance services continue to be a major issue with surprise billing. Click here for an updated.
• Reps. Phil Roe (R-TN) and Kim Schrier (D-WA) introduced legislation last week to improve the accuracy of the information listed on health plans’ provider directories to prevent patients from receiving surprise out-of-network bills, click here.

Justice Department Says DEA Failed Its Opioid Oversight Role
According to a new report from the DOJ IG, the Drug Enforcement Agency allowed pharmaceutical companies to dramatically increase their production of opioids even as overdoses grew dramatically. Specifically, the IG found that the DEA did not use its resources effectively to regulate the drug industry or hold manufacturers, distributors or providers accountable and prevent diversion of opioids. The agency allowed manufacturers to produce significantly larger amounts of opioids and increase the aggregate production quota for oxycodone by over 400 percent between 2002 and 2013 and did not significantly cut back the limit until 2017, when overdose deaths reached nearly 72,000. Additionally, the report states that the DEA did not use its authority to make timely decisions against registrants found to have diverted opioids or committed other violations. Click here to view the report.

• Last week, the FDA and DEA sent warning letter to 10 websites illegally marketing unapproved and misbranded versions of opioid medicines that are potentially dangerous, click here.
• A federal judge ruled that a Philadelphia nonprofit’s proposal to open the nation’s first supervised drug injection site does not violate federal law, click here.

New ACA Wellness Initiative Announced by CMS and Other ACA Developments
CMS has unveiled a voluntary demonstration program for states to apply that would allow individual market health plans in the Affordable Care Act exchanges to set up wellness programs for their beneficiaries. The agency expects to approve up to 10 states to participate. States will have to show that the wellness program will not lead to coverage losses or increased costs to the federal government. If approved, states must begin submitting annual data on the number of participants, the rewards provided, overall issuer cost savings, and changes in participant behavior. The government will use this data to determine whether to expand the project to additional states. Click here for more.

• There is growing evidence that the ACA has saved lives and made some Americans healthier through Medicaid expansion and wellness focus, click here.
• 2,583 hospitals received Medicare payment cuts due to ACA readmission program at the estimated cost to hospitals of $563 million over a year, click here.
• The Center for American Progress breaks down the 135 million people under age 65 with pre-existing conditions by Congressional District, click here.

CMS Says Medicare ACOs Saved $740M in 2018
CMS Administrator Seema Verma lauded Medicare’s accountable care organization program saying that it generated $740 million in savings in 2018, in a blog post in Health Affairs last week.  Previously criticizing the program, Verma details how recent changes made by the Administration has led to higher-quality and more efficient care for beneficiaries. Additionally, Verma states that ACOs that were led by physicians tended to outperform those that were led by hospital systems. To read the blog, click here.

• According to CMS data, the top three performing ACOs in 2018 were – Palm Beach Accountable Care Organization (Palm Springs, FL) with $50.1 million in savings, Millennium Accountable Care Organization (Fort Myers, FL) with $29 million in savings, and Hackensack (NJ) Alliance ACO with $21.6 million in savings, for the full list, click here.
• CMS rules to loosen various requirements in Medicaid managed care regulations, adopted by the Obama Administration in 2016, were sent to the Office of Management and Budget last week for review, which is usually the final step before they are officially published, click here.

Study: High Food Insecurity Among Low-Income, Disability-Based Medicare Enrollees 
A new study by researchers at Northwestern University and Harvard Medical School not surprisingly found that there are high rates of food insecurity among low-income Medicare beneficiaries who are also eligible for Medicaid and are disability-based in the program. An estimated 40 percent of Medicare enrollees under age 65 with a physical or mental impairment experienced food insecurity at some point in the last year, as compared to just 9 percent of beneficiaries age 65 and over. These findings come as some private health plans that provide Medicare benefits prepare to offer non-medical assistance, like home-delivered meals, as a supplemental benefit in 2020. Click here to view the study.

• Hospitals across the country are looking into building housing units for patients as a less expensive option to keeping them in the hospital longer when they do not have a stable home at discharge, click here.

• CDC report: 27.1% of high school students and 7.2% of middle school students used tobacco products in 2018, a significant increase from recent years and flavored e-cigarettes appear to be the biggest culprit as 68% of the high school students and 52% of the middle school students said they used flavored e-cigarettes, both an increase from 2017 data. To read the full report from the CDC, click here .

• The NIH has announced the creation of the Collaborative Influenza Vaccine Innovation Centers (CIVICs) $51 million, 7-year program to create a network of research centers that will work together to develop new flu vaccines that are more durable, protective, and longer-lasting, click here.