October 2017

Bipartisan Talks on ACA Fix Resume

Following the collapse of Republican’s latest attempt to repeal and replace the Affordable Care Act (ACA), the Senate Health, Education, Labor, and Pensions (HELP) Committee leadership resumed bipartisan negotiations focused on stabilizing the individual health insurance market and lowering health insurance premiums. Committee Chairman Lamar Alexander (R-Tenn.) and Ranking Member Patty Murray (D-Wash.) have both stated that they are close to reaching an agreement that will focus on market changes over the next two years. The deal would likely legislate funding for cost- sharing reduction (CSR) payments and allow for the sale of low-cost health care plans. Insurers have already made decisions about participation and rates for the 2018 plan year, but successful legislation could still have an impact in 2019.


The House Problem Solvers Caucus — a group of 43 bipartisan lawmakers led by Reps. Josh Gottheimer (D-N.J.) and Tom Reed (R-N.Y.) — have written to congressional leadership supporting work on a bipartisan health reform plan. They request mandatory funding for CSR payments, the creation of a stability fund for states to help reduce premiums and limit losses in providing insurance coverage, repeal of the medical device tax, and steps to reduce the impact of the employer mandate on small employers. While the talks are strongly supported by Democratic leadership, it is unclear whether a deal would have enough Republican support to pass the full Senate or the House of Representatives.


GOP Scraps Plans to Repeal and Replace This Year

Senate Republicans decided not to hold a vote on the Graham-Cassidy-Heller-Johnson proposal to

repeal and replace the Affordable Care Act (ACA) after it became apparent that they lacked the 50

votes needed to successfully pass the legislation. The plan would have eliminated insurance mandates and converted Obamacare funding into block grants for states to set up and regulate their own health insurance markets.


Sen. Susan Collins (R-Maine) provided the decisive third ‘no’ vote from the Republican caucus, following earlier announcements from Sens. Rand Paul (R-Ky.) and John McCain (R-Ariz.). Even under the fast-track budget process known as reconciliation, Republicans could not afford to lose more than two votes and still pass the bill with Vice President Pence serving as the 51st vote.


HHS to Cut ACA Advertising Budget

U.S. Department of Health and Human Services (HHS) announced decision to reduce the budget for promotion of the Affordable Care Act (ACA) last week. HHS will lower spending on Obamacare advertising and outreach from $100 million last year to $10 million going forward. The Administration also plans to cut payments for health insurance navigators, who assist people in choosing a health insurance option, by 39 percent. In order to increase accountability, funding for navigators will be proportional to how successful a navigator was in meeting their enrollment target the previous year. HHS officials are planning on setting a goal for exchange enrollment for the coming year, but the target has not yet been announced


FDA Announces New Stem Cell Policy

The Food and Drug Administration (FDA) will advance a new policy framework for stem cell therapies in the coming months. The FDA hopes to establish which regenerative medicine products are sufficiently complex to be considered within the agency’s regulatory authority, and to define a process for evaluating stem cell therapies for safety and effectiveness. The decision follows the FDA’s announcement that the company US Stem Cell Clinic marketed stem cell products without FDA approval. The Agency found that the firm’s deviations from current good manufacturing practice requirements may have affected the sterility of their products and put patients at risk. The FDA requests a response from the company within 15 days. The House Energy and Commerce Committee also announced that it plans to conduct a review of companies selling unproven stem cell treatments.


Single Payer Medicare-for-All Legislation Introduced

Sen. Bernie Sanders (I-Vt.) has formally introduced his long awaited “Medicare-for-All” legislation that would transition the nation into a single-payer health care system. The plan currently has the support of 15 Democratic senators, many of whom are expected to run in the next presidential election. The list includes Sens. Cory Booker (D-N.J.), Richard Blumenthal (D-Conn.), Kirsten Gillibrand (D-N.Y.), Kamala Harris (D-Calif.), Mazie Hirono (D-Hawaii), Jeff Merkley (D-Ore.), Brian Schatz (D-Hawaii), Tom Udall (D-N.M.), Elizabeth Warren (D-Mass.), Al Franken (D-Minn.), and Tammy Baldwin (D-Wis.). The bill would end the private insurance industry and be implemented over a period of four-years. Children younger than age 18 would be immediately and automatically eligible for coverage. The plan would be paid for through a tax increase on both individuals and employers. Senator John Barrasso (R-Wyo.) wrote the Congressional Budget Office (CBO) requesting a full cost estimate of the bill saying, “it is imperative that the public understand the cost.”


Opioid Recommendations Pushed to November

The White House Opioid Commission, chaired by New Jersey Governor Chris Christie (R), has requested an additional four weeks to complete its report. In the interest of “sound recommendations” the extra time will allow the Commission to complete the research and policy developments that are still in progress. The report was originally due on October 1. The final version is now expected to be released on November 1.


The Commission has also announced a new partnership between pharmaceutical manufacturers and the federal government. The public private collaboration with the National Institutes of Health (NIH) will work to speed the development of non-opioid, non-addictive pain medication and new medication assisted treatment (MAT) options. In related news, the Food and Drug Administration (FDA) announced that it will require information be added to buprenorphine and methadone drug labels indicating that the medications should not be withheld from patients taking benzodiazepines or other drugs that depress the central nervous system.


Secretary Tom Price Resigns

Dr. Tom Price, MD has resigned from his Cabinet position as Secretary of the Department of Health and Human Services (HHS). The announcement reports that Price used military flights and private jets for travel totaling more than $1 million since May. In his resignation letter, Price expresses regret for creating a distraction from the important objectives of HHS and pledges to continue to support the Administration’s priorities in the future. Prior to being confirmed as Secretary, Price had served in the House of Representatives and authored legislation to repeal the Affordable Care Act (ACA).


Don J. Wright will serve as Acting HHS Secretary. Wright has worked as the Deputy Assistant Secretary for Health and Director of the Office of Disease Prevention and Health Promotion since 2012. He joined HHS in 2007 during the Bush Administration and previously served as the Deputy Assistant for Health Care Quality. During his time at HHS, he has worked on efforts to reduce adverse drug events and to monitor the nation’s leading health indicators. He previously worked on health and safety issues at the Department of Labor as Director of the Office of Occupational Medicine. He is board certified in both family medicine and preventive medicine and holds a master’s degree in public health.


The short-list to replace Price includes several current members of the Administration, including Acting HHS Secretary Don Wright, Administrator for the Centers for Medicare and Medicaid Services (CMS) Seema Verma, Secretary of Veterans Affairs David Shulkin, Commissioner of Food and Drugs Scott Gottlieb, and Housing and Urban Development Secretary Ben Carson.

September 2017

CMS Issues Proposed Rule Modifying Episode Payment Models

The Centers for Medicare & Medicaid Services (CMS) released a proposed rule August 15 that would eliminate the Episode Payment Models (EPMs), including acute myocardial infarction, coronary artery bypass graft, and surgical hip/femur fracture treatment episodes of care. It also would eliminate the cardiac rehabilitation (CR) incentive payment model. CMS said many providers already are engaged in voluntary initiatives with the agency; therefore, requiring hospitals to participate in EPMs is inappropriate. The proposed rule also revises aspects of the Comprehensive Care for Joint Replacement (CJR) model. CMS proposes to make participation in the CJR model voluntary for all hospitals in certain Metropolitan Statistical Areas (MSAs) and for low-volume and rural hospitals in all of the MSAs included in the program. In addition, CMS proposes to increase the pool of eligible providers that qualify under the Advanced Alternative Payment Model (A-APM) track of the CJR model. The proposed rule and a fact sheet on its CJR participation requirements are available for public review.

Where Health Care Reform Stands

Leadership on both the Senate Finance Committee and Senate Health, Education, Labor, and Pensions (HELP) Committee announced that they would hold hearings on health care reform following August recess. HELP Committee hearings will begin the week of September 4, and will focus on stabilizing the insurance market. Witnesses will include state insurance commissioners, patients, governors, health care experts, and insurance companies. Chairman Lamar Alexander (R-Tenn.) stated that he has discussed a bipartisan market stabilization bill with his panel. He also supports the continuation of cost-sharing reduction payments by the President through September, followed by a yearlong appropriation by Congress. The President and Secretary of the U.S. Department of Health and Human Services (HHS) met with Sen. Bill Cassidy (R-La.) to discuss his proposal to give block grants to states in an amount equal to what the federal government currently spends on the Affordable Care Act (ACA). In the House, a bipartisan group of lawmakers are discussing a health care reform plan that would pay for cost-sharing reduction payments, alter the law’s employer mandate, and eliminate the impending tax on medical devices. Members on both sides of the aisle, along with stakeholders and experts, agree that cost-sharing reduction payments are necessary to ensure stability in the individual marketplace. Senate leadership continues to stress that it will not bring up health care legislation again until they can guarantee 50 votes, but state that health care reform proposals continue to be scored at the Congressional Budget Office (CBO).

Senate Reauthorizes FDA User Fee Programs

The Senate passed the Food and Drug Administration Reauthorization Act (FDARA). H.R. 2430 extends for five years the FDA’s authority to collect $400 million in user fees from drug and medical device companies to fund the new product approval process. The Senate also passed the Trickett Wendler Right to Try Act (S. 204) by unanimous consent. President Trump signed the FDARA.

VA Choice Program Continues

The Senate cleared legislation to fund the Veterans Choice Program last week. S. 114 will provide $2.1 billion to continue funding the program, which was projected to run out of money in mid-August. The bill passed the House of Representatives in July. The Department of Veterans Affairs also announced the creation of three programs aimed at modernizing health care for veterans. Veterans will have access to a new a new scheduling system via mobile phones, as well as additional care for the homebound. The $1 billion budget for telehealth will remain the same. President Trump approved the legislation during his working vacation.

Opioid Crisis Designated National Emergency

The President classified the opioid crisis as a national emergency. Based on the recommendations from the President’s Commission on Combating Drug Addiction and the Opioid Crisis interim report, the White House instructed federal agencies to use any appropriate emergency and other authority to respond to the epidemic. Secretary Price stated that ensuring widespread access to overdose reversing medication as well as review of opioid alternative painkillers by the Food and Drug Administration (FDA) are two priorities for the Administration. The Department is also examining privacy regulations to determine whether they can be made less onerous in cases of an overdose. The White House stressed that it is working to stop the movement of fentanyl into the U.S. and to increase federal drug prosecutions. It is also looking at ways to reduce the number of pills prescribed and the length of painkiller prescriptions

ONC to Hold Meetings on Interoperability

The Office of the National Coordinator (ONC) plans to hold two stakeholder forums before the end of the year focusing on a nationwide framework for electronic health-data exchange. Full adoption of interoperability is a high priority for the ONC, particularly in order to support providers participating in value-based payment programs. The first meeting is likely to be scheduled before the end of September.

HELP Committee Begins Marketplace Stabilization Hearings

The Senate Health, Education, Labor, and Pensions (HELP) Committee scheduled for the insurance commissioners about “Stabilizing Premiums and Helping Individuals in the Individual Insurance Market for 2018.” Insurance commissioners Mike Kreidler from Washington, Julie Mix McPeak from Tennessee, Teresa Miller from Pennsylvania, John Doak from Oklahoma, and Lori Wing-Heier from Alaska are scheduled to appear. On September 7, a panel of governors will testify on the same subject. Witnesses will include Colorado Gov. John Hickenlooper, Massachusetts Gov. Charlie Baker, Utah Gov. Gary Herbert, Montana Gov. Steve Bullock, and Tennessee Gov. Bill Haslam. According to Chairman Lamar Alexander (R-Tenn.) and Ranking Member Patty Murray (D-Wash.), the HELP Committee plans to hold additional bipartisan hearings on the individual insurance market later in the year. The Committee is working to draft a stabilization package by mid-September, which it hopes to pass by the end of the month.

CMS Releases FY 2018 IPPS Final Rule

The Centers for Medicare & Medicaid Services (CMS) released the fiscal year (FY) 2018 Medicare Inpatient Prospective Payment System (IPPS) final rule August 2. The rule updates next year’s Medicare payment rates and coverage policies for patients when they are discharged from a hospital. CMS projects that implementation of provisions in the final rule will lead to an approximately $2.4 billion increase in Medicare spending on inpatient hospital services in 2018. CMS will distribute more than $6 billion in uncompensated care payments to acute care hospitals. CMS also finalized modifications to the clinical quality measures (CQMs) reporting requirements under the Medicare and Medicaid Electronic Health Record (EHR) Incentive Program. As a result of these changes, eligible hospitals that participate only in the EHR Incentive Program or participate in both the EHR Incentive Program and the Hospital Inpatient Quality Reporting Program will be required to report on at least four self selected CQMs. In addition, CMS finalized its proposal to direct Medicare audit contractors to make the critical access hospital (CAH) 96-hour certification requirement, which mandates that physicians certify that a patient may reasonably be expected to be discharged or transferred from a CAH within 96 hours of admission—a low priority for medical record reviews. Absent concerns of fraud, waste, or abuse, hospitals should not expect to receive medical record requests related to the 96-hour requirement from auditors. The final rule is available for public review, along with a fact sheet on its payment and quality aspects.

GOP Agenda for Post-August Recess

Republican leadership in the House of Representatives has outlined their legislative priorities for when Congress returns from August recess on September 5. They plan to tackle a spending package covering the eight remaining appropriations bills that have yet to be passed. If successful, this package would be combined with the four-bill “minibus” the House passed earlier in the year. The minibus included funding for the Department of Defense and other security-related bills. The 12-bill omnibus would then be sent to the Senate which has not yet passed any appropriations bills. Lawmakers must act to fund the government by the end of the fiscal year (FY), September 30. The House has only 12 days in session during the month of September and the Senate has 17 days scheduled. Lawmakers will also have to address the debt limit increase before the end of September and House Republicans hope to pass a FY 2018 budget, which tax reform. Reauthorization of the Children’s Health is also on the agenda. Funding for CHIP expires on September 30.

CMS Releases New Education Materials on Social Security Number Removal Initiative

The Centers for Medicare & Medicaid Services (CMS) launched a new web page to educate providers about the Social Security Number Removal Initiative (SSNRI). The SSNRI is a fraud-prevention effort that involves removing SSNs from Medicare insurance cards to combat identity theft and illegal use of Medicare benefits. The new Medicare cards will feature randomly assigned numbers, known as Medicare Beneficiary Identifiers (MBIs), in place of beneficiaries’ existing SSN-based Health Insurance Claim Number (HICN), which is used to track Medicare billing, eligibility status, and claims status. CMS will replace all Medicare cards by April 2019. Beginning January 1, 2020, CMS will no longer accept HICNs and providers must use MBIs to check Medicare eligibility, submit claims, and file appeals. CMS advises providers to take the following five steps to prepare for the new Medicare cards:

  • Visit CMS’ provider website and sign up for the weekly Medicare Learning Network (MLN) Connects newsletter to receive updates on the initiative.
  • Attend CMS’ quarterly calls to get more SSNRI information. CMS will let providers know when calls are scheduled in the MLN Connects newsletter.
  • Verify all Medicare patient addresses. If the addresses on file differ from the Medicare address listed on electronic eligibility transactions, providers should ask patients to contact the Social Security Administration and update their Medicare records.
  • Work with CMS to help Medicare patients adjust to their new Medicare cards. CMS will make available posters and other materials that providers can share with patients to help them learn about SSNRI-related changes.
  • Test system changes and work with billing office staff to ensure they are ready to use the new MBI format.
August 2017

Senate Repeal and Replace Efforts Fail

In the early hours of July 28, Senate Republicans’ attempt to repeal and replace e Affordable Care Act (ACA) fell apart. Majority Leader Mitch McConnell had offered amendment #667, the Health Care Freedom Act, referred to as the “skinny bill,” in hopes of passing something in the Senate that could engage the House of Representatives in conference negotiations to build consensus toward a final repeal and replace package. The final vote was 49- 51 with Sens. John McCain (R-Ariz.), Lisa Murkowski (R-Alaska), and Susan Collins (R-Maine) joining Senate Democrats to oppose the amendment. The House adjourned for August recess on Friday. The Senate previously made the decision to delay its recess for two weeks. At this point, the Senate is poised only to complete work on nominations, but it may also take up the bipartisan Food and Drug Administration Reauthorization Act (FDARA), which previously passed the House by voice vote. Timely passage of FDARA is necessary to ensure that FDA review and approval of pharmaceuticals and medical devices is not disrupted as the user fees authorized by the bill provide more than half of the agency’s funding.

CMS Releases New QPP Web Page for Small Practices

The Centers for Medicare & Medicaid Services (CMS) recently launched a new web page to help providers in small practices, including those in rural or underserved areas, participate in the Quality Payment Program (QPP). The web page contains information and resources that may be especially useful to participants in the Merit-based Incentive Payment System (MIPS). A key feature of the web page is an interactive map that provides contact information for organizations that participate in CMS’ Small, Underserved, and Rural Support program. These experienced community-based organizations (CBOs) offer hands-on training to small practices in historically under-resourced areas, including rural areas, health professional shortage areas, and medically underserved areas. The resources provided by the CBOs are available nationwide and at no cost to eligible clinicians and practices. The CMS website has more information, including QPP flexibility and exemption details and additional resources

CMS Releases CY 2018 OPPS/ASC Proposed Rule

The Centers for Medicare & Medicaid Services (CMS) released the calendar year (CY) 2018 Outpatient Prospective Payment System (OPPS)/Ambulatory Surgical Center (ASC) proposed rule on July 13. Under the OPPS proposed rule, CMS projects an overall 2 percent payment increase for most hospital outpatient departments in CY 2018. CMS also proposes changes in how Medicare pays hospitals for drugs that are acquired under the 340B Drug Discount Program. CMS would reimburse separately payable, non-pass-through drugs purchased at a discount through the 340B program at the average sales price (ASP) minus 22.5 percent, rather than the ASP plus 6 percent. The proposed rule places a moratorium through CY 2019 on the direct physician supervision requirement for outpatient therapeutic services at rural and critical access hospitals with 100 or fewer beds. CMS proposes additional provisions to remove six measures from the Hospital Outpatient Quality Reporting (OQR) Program and to remove total knee arthroplasty procedures from the inpatient-only list. Under the ASC rule, CMS estimates a 1.9 percent payment increase for CY 2018 for services provided at these facilities. CMS proposes to add three procedures to the ASC list of covered surgical procedures and to the ASC Quality Reporting Program.

The House Ways and Means Committee has launched an initiative aimed at scaling back regulatory and legislative burdens in the Medicare program. The Medicare Red Tape Relief Project requests comments from health care stakeholders about mandates that raise costs and hinder innovation and care quality. Lawmakers hope to work with the health care industry to find and eliminate such regulations either through legislation or administrative action, in conjunction with the U.S. Department of Health and Human Services (HHS). Health Subcommittee Chairman Pat Tiberi’s (R-Ohio) ultimate goal is to improve efficiency and care quality for Medicare beneficiaries. The initiative will also include congressional roundtables with stakeholders across the country. Comments are due by August 25.

House Votes to Extend VA Choice Program

The House of Representatives passed a revised version of S. 114, the VA Choice and Quality Employment Act. The bill provides $2.1 billion in mandatory funds for the Veterans Choice Program, which allows care delivery outside of VA facilities. The legislation also authorizes $274.6 million for VA facility leases, and would expand the VA’s efforts to recruit and retain qualified health professionals. The program is set to run out of funding as early as mid-August. The funding included in S. 114 will extend the program for an additional six months.

CMS Releases CY 2018 MPFS Proposed Rule

The Centers for Medicare & Medicaid Services (CMS) on issued the calendar year (CY) 2018 Medicare Physician Fee Schedule (MPFS) proposed rule. Under this rule, CMS estimates a 1 percent reduction in total Medicare payments for general surgery services in 2018 from 2017. The pay cut can be attributed to proposed changes in the relative value units assigned to Current Procedural Terminology codes. CMS seeks feedback from stakeholders on specific changes the agency should undertake to update evaluation and management (E/M) visit codes to reduce administrative burdens and better align E/M coding and documentation with modern health care delivery. The rule also proposes several changes to policies for the 2018 Physician Value-Based Modifier to better align incentives and provide a smoother transition to the Quality Payment Program’s Merit-based Incentive Payment System. Specifically, CMS proposes to reduce the automatic downward payment adjustment for not meeting minimum quality reporting requirements from -4 percent to -2 percent for groups of 10 or more clinicians, and from -2 percent to -1 percent for solo practitioners and groups of two to nine clinicians. In addition, CMS proposes to hold harmless all physician groups and solo practitioners who met minimum quality reporting requirements from downward payment adjustments for performance under quality tiering for the last year of the program and to align the maximum upward adjustment amount to two times the adjustment factor for all physician groups and solo practitioners.

Lawmakers Request Information on CMS MU Overpayments

Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa) and Senate Finance Committee Chairman Orrin Hatch (R-Utah) are requesting information on what the Centers for Medicare and Medicaid Services (CMS) is doing to recover overpayments from the Meaningful Use (MU) program. The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) estimates that the agency overspent $729 million on the program between 2011 and 2014. The lawmakers also criticize CMS’ targeted audits aimed at improving the integrity of MU, which the OIG found are ineffective in correcting the errors it identified.

House Passes Medical Controlled Substances Transportation Act

The House of Representatives has passed legislation that would allow health practitioners to transport controlled substances across state lines. Under H.R. 1492, the Medical Controlled Substances Transportation Act, emergency medical services personnel and sports team physicians could register with the Drug Enforcement Administration (DEA) to transport controlled substances and administer them to patients outside of their registered work places. After 72 hours, the medicines would need to be returned to where they are stored, and doctors would be required to maintain records of where the medication was administered. Schedule I drugs are excluded from the changes in the legislation. H.R. 1492 passed by a vote of 416-2.

Lawmakers Investigate NIH Research Protocol

Leadership of the House Energy and Commerce Committee are investigating a medical research protocol that allegedly does not align with the Food and Drug Administration’s (FDA) rules for informed consent. Chairman Greg Walden (R-Ore.) and Oversight and Investigations Subcommittee Chairman Tim Murphy (R-Pa.) have written to the National Institutes of Health (NIH) on behalf of a constituent whose now-deceased wife went into cardiac arrest, and was later considered a participant in the Resuscitation Outcomes Consortium (ROC), sponsored by the National Heart, Lung, and Blood Institute (NHLBI). The constituent learned that participants have to actively opt-out of the study. Because his wife was unconscious, she was automatically enrolled in the ROC.

July 2017

Better Care Reconciliation Act Released The bill would provide $50 billion over four years to stabilize the insurance market. This funding would be in addition to cost-sharing subsidy payments, which would be extended through 2019. It also includes $62 billion over eight years for a state innovation fund, which could be used for coverage of high-risk patients, reinsurance, or other similar purposes.  The bill would retroactively eliminate the individual and employer mandates to 2016. It repeals taxes on health insurers, medical devices, prescription drugs, and indoor tanning. It also eliminates the Affordable Care Act’s (ACA) investment income tax and the Medicare surtax. The Cadillac tax on high cost health plans would be delayed from 2020 to 2026. Unlike the House-passed AHCA, the bill does not contain the 30% surcharge for lack of continuous coverage. Like the House bill, the Senate bill includes a provision to give states the flexibility to alter their health markets, which may include waiving essential health benefit requirements. However, unlike the House bill, the Senate uses a waiver process that is already in place – section 1332 waivers, with additional changes to the current waiver program. Like the House bill, it also changes insurer age rating to allow older adults to be charged as would be provide much as five times younger people. Premium subsidies in the individual market making up to 350 percent of the poverty level beginning in 2020. The current cutoff is 400 percent of the poverty level. The insurance subsidy system would also be plan rather than less generous than under current law, and based on 58% of actuarial value (the cost of a low-level bronze plan (which the Centers for Medicare and Medicaid Services has estimated to be near 70% actuarial value). The bill includes a provision to tighten subsidy eligibility on the basis of immigration status. Medicaid expansion would be phased from 2021 until 2024. Unlike the House bill, Federal spending on Medicaid would be capped using a more stringent measure of inflation (CPI-U), rather than the medical inflation rate (CPI-M) used in AHCA, beginning in 2025. The bill includes an additional $2 billion in fiscal year (FY) 2018 to address the opioid epidemic and (like the House bill) would defund Planned Parenthood for one year. The legislation was recently amended with Senator Ted Cruz’s (R-Texas) Consumer Freedom Act, which would allow the sale of plans that don’t comply with the Affordable Care Act’s (ACA) insurance regulations on pre-existing conditions and essential health benefits (EHBs). The revised bill includes an additional $70 billion in new funding over the next seven years aimed at reducing costs for individuals who remain in the regulated-insurance plans. Beginning in 2022, states would begin having to share an increasingly higher portion of this cost. The new BCRA would keep in place several ACA taxes on the high earners, which would result in a revenue stream of nearly $232 billion over the next ten years. The revised measure includes the addition of $45 billion to combat the opioid epidemic. It would also allow individuals to use health savings accounts (HSAs) to pay for insurance premiums. Additionally, individuals would be allowed to purchase high deductible catastrophic coverage plans with federal tax credits. Medicaid payments to hospitals for coverage of uncompensated care would be calculated according to the state’s uninsured population, instead of the state’s Medicaid enrollment, as originally drafted.


2017 Trustees Report Released; IPAB Not Triggered

The 2017 Medicare Trustees Report, which projects the long-term finances of the Medicare program, was released last week. The Board of Trustees finds that Medicare spending will not trigger the Independent Payment Advisory Board (IPAB) until 2021. The Board had previously forecast that the cost-cutting panel would be triggered this year. The 2017 report also indicates that the Medicare trust fund will remain solvent until 2029, a year later than previously predicted, though the reason for the slowdown is unclear.  

GAO: Locations and Types of Graduate Training Were Largely Unchanged, and Federal Efforts May Not Be Sufficient to Meet Needs

The GAO released a report on GME. The report describes (1) changes in number of residents in GME training by location and type of training from academic years 2005 through 2015, (2) federal efforts intended to increase GME training in rural areas, and (3) federal efforts intended to increase GME training in primary care. To determine changes in the locations and types of residents in GME training, GAO analyzed resident data from the accrediting bodies overseeing GME training. To identify and describe relevant federal efforts, GAO also reviewed federal laws, reports, and data, and interviewed agency officials  

Cybersecurity Report Released

The Health Care Industry Cybersecurity Task Force released a report last week asserting that improved cybersecurity protections are needed for medical devices and health information technology. The public-private task force includes representatives from both the U.S. Department of Health and Human Services (HHS) and the U.S. Department of Homeland Security, and was created by the Cybersecurity Act of 2015. The report recommends increased information sharing between the public and private sector on cyber-risks. The Task Force also supports the creation of exceptions to health care anti-fraud laws to allow health care organizations aid physicians in the purchase of cybersecurity software.  

GAO: CMS Should Track MA Dropouts

The Government Accountability Office (GAO) has recommended that the Centers for Medicare and Medicaid Services (CMS) should track whether the Medicare Advantage enrollees who drop out of managed care plans are getting adequate care. The GAO report found that beneficiaries in poorer health are more likely than others enrolled in Medicare Advantage to voluntarily leave their health plans. These plans tended to have lower quality scores, with enrollees more likely to face difficulty in accessing care. The plans were also more likely to be restricted provider network health maintenance organizations. The GAO suggests that CMS take advantage of the opportunity to use disenrollment data to better target oversight and identify problems within the Medicare Advantage program.

CBO Releases Estimate on BCRA

The Congressional Budget Office (CBO) released an estimate of enacting this legislation would reduce the cumulative federal deficit over the 2017-2026 period by $321 billion. That amount is $202 billion more than the estimated net savings for the version of H.R. 1628 that was passed by the House of Representatives. The Senate bill would increase the number of people who are uninsured by 22 million in 2026 relative to the number under current law, slightly fewer than the increase in the number of uninsured estimated for the House-passed legislation. By 2026, an estimated 49 million people would be uninsured, compared with 28 million who would lack insurance that year under current law.

Trump Nominates New Surgeon General

President Trump has tapped Jerome Adams to be U.S. Surgeon General. Adams is an anesthesiologist and is currently serving as the health commissioner for the state of Indiana, a post he was appointed to in 2014 by now-Vice President Mike Pence. He has previously worked as a staff anesthesiologist and assistant professor of anesthesiology at the Indiana University School of Medicine. If confirmed, Dr. Adams would replace Rear Admiral Sylvia Trent-Adams, the current acting surgeon general, who took over the post after Vivek Murthy was dismissed by President Trump.

House Passes Medical Malpractice Reform Legislation

The House of Representatives passed legislation to overhaul the medical liability system last week. H.R. 1215, the Protecting Access to Care Act (PACA), was passed by a vote of 218-210, with 19 Republicans crossing the aisle to join all House Democrats to vote against the bill. PACA is considered a part of the GOP’s broader effort to repeal and replace Obamacare. The bill would limit damages and lawyers’ fees for cases related to federally subsidized health care. Medical malpractice awards for non-economic damages would be capped at $250,000 under the bill. The bill would also establish a three-year statute of limitations after an injury, or one year after the discovery of an injury. PACA would preempt state laws, except in cases where the state has already specified a shorter time period for the statute of limitations, or a particular amount of damages that can be awarded in a lawsuit. The Congressional Budget Office (CBO) estimates that the bill would reduce the deficit by $50 billion over the next decade. It is unclear whether the bill will advance in the Senate, where Democrats are opposed to the liability cap, and some Republicans have voiced concerns about infringing upon states’ rights. More than two-dozen states already have award caps in place. To respond to concerns related to state’ rights, the provisions in the PACA legislation are limited to when a medical liability case involves federal healthcare funds.

CMS Releases 2018 QPP Proposed Rule

The Centers for Medicare & Medicaid Services (CMS) released a proposed rule June 20 that describes changes that would be made to the Quality Payment Program (QPP) in 2018, as required under the Medicare Access and CHIP (Children’s Health Insurance Program) Reauthorization Act (MACRA) of 2015. The QPP provides two tracks for participation: the Merit-based Incentive Payment System (MIPS) or an Advanced Alternative Payment Model (A-APM). Most providers will participate in the MIPS program during the early years of the QPP. The proposed rule alters existing requirements while also introducing new policies that aim to simplify QPP, particularly for small, independent, and rural practices, while maintaining fiscal sustainability and high-quality care within Medicare.   Important provisions of the proposed rule are as follows:

  • CMS proposes to maintain the 2017 transition year weights for the MIPS components—60 percent for Quality, 25 percent for Advancing Care Information (ACI), 15 percent for Improvement Activities, and 0 percent for Cost.
  • CMS proposes to allow MIPS-eligible clinicians to continue participation in the ACI category by using 2014 certified electronic health record technology (CEHRT), thereby providing additional time for practices to move toward use of 2015 CEHRT.
  • CMS proposes to increase the low-volume threshold to exempt providers or groups with less than or equal to $90,000 in Part B allowed charges or less than or equal to 200 Part B beneficiaries (from a 2017 low-volume threshold of ≤$30,000 in Part B allowed charges or ≤100 Part B beneficiaries) from having to meet the MIPS participation requirements.

For more information, see the 2018 QPP Proposed Rule and the CMS Fact Sheet.

June 2017

New Medicare cards offer greater protection to more than 57.7 million Americans The Centers for Medicare & Medicaid Services (CMS) is readying a fraud prevention initiative that removes Social Security numbers from Medicare cards to help combat identity theft, and safeguard taxpayer dollars. The new cards will use a unique, randomly-assigned number called a Medicare Beneficiary Identifier (MBI), to replace the Social Security-based Health Insurance Claim Number (HICN) currently used on the Medicare card. CMS will begin mailing new cards in April 2018 and will meet the congressional deadline for replacing all Medicare cards by April 2019.   Providers and beneficiaries will both be able to use secure look up tools that will support quick access to MBIs when they need them. There will also be a 21-month transition period where providers will be able to use either the MBI or the HICN further easing the transition.   CMS testified on Tuesday, May 23rd before the U.S. House Committee on Ways & Means Subcommittee on Social Security and U.S. House Committee on Oversight & Government Reform Subcommittee on Information Technology, addressing CMS’s comprehensive plan for the removal of Social Security numbers and transition to MBIs.   Work on this important initiative began many years ago, and was accelerated following passage of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). CMS will assign all Medicare beneficiaries a new, unique MBI number which will contain a combination of numbers and uppercase letters. Beneficiaries will be instructed to safely and securely destroy their current Medicare cards and keep the new MBI confidential. Issuance of the new MBI will not change the benefits a Medicare beneficiary receives.   CMS has a website dedicated to the Social Security Removal Initiative (SSNRI) where providers can find the latest information and sign-up for newsletters. CMS is also planning regular calls as a way to share updates and answer provider questions before and after new cards are mailed beginning in April 2018.   For more information, please visit: https://www.cms.gov/medicare/ssnri/index.html    Administration Releases Budget for FY 2018 The budget proposal includes $1.5 trillion in nondefense discretionary spending cuts, and would balance the budget within a decade. While the White House budget would drastically reshape federal spending on anti-poverty and safety net programs, it leaves the Medicare program untouched. The budget assumes that repeal and replacement of the Affordable Care Act (ACA) will be accomplished, resulting in estimated savings of $250 billion over the next ten years.   The budget features deep cuts to the U.S. Department of Health and Human Service (HHS) – totaling a reduction of $12.4 billion in discretionary funding.

  • Funding for the National Institutes of Health (NIH) would be reduced by nearly 20 percent, or $6 billion.
  • The budget proposes to decrease spending at the Centers for Disease Control and Prevention (CDC) by $1.3 billion, or 17 percent.
  • The budget proposal would consolidate the Agency for Healthcare Research and Quality (AHRQ) into the NIH, but maintain the Agency’s $272 million in discretionary funding. Additionally, the method by which AHRQ processes grants would be restructured in order to lower operating costs.
  • The President’s budget would increase industry user fees at the Food and Drug Administration (FDA) by almost 70 percent while reducing taxpayer funding for the agency by 30 percent. Congressional leadership has already said this proposal is definitely unfeasible given the current status of user fee negotiations.
  • The budget includes medical liability reforms as one of its major savings components. Proposals such as capping noneconomic damages, enactment of a statute of limitations, and creation of a safe harbor for clinicians are estimated to produce $55.8 billion in savings.
  • On the issue of drug pricing, the President’s budget expresses support for updating value-based purchasing arrangements, and for encouraging manufacturers to communicate with payers ahead of FDA approval. The White House budget proposal would also overhaul the Medicaid program in order to rein in entitlement spending. Medicaid’s federal funding would be capped, which would result in $610 billion in savings over the next decade.

Medicaid would be transitioned to either a block grant program or a per-capita limit. While states would receive a fixed amount of funding for Medicaid, they would be provided additional flexibility in the administration of the program. The budget proposal’s handling of Medicaid mirrors the policies contained in the House-passed American Health Care Act (AHCA), to repeal and replace Obamacare. The combined proposals would slash a total of $1.4 trillion from the Medicaid program. The budget proposal indicates the President’s interest in reforming the program regardless of whether AHCA becomes law. The President’s budget also includes a $5.8 billion cut to the Children’s Health Insurance Program (CHIP), along with a two-year extension of CHIP. While Republicans praised the President for his commitment to balancing the budget, most have distanced themselves from the budget proposal nonetheless.   Congressional Telehealth Caucus Launched Members of the House of Representatives have launched a coalition to bring awareness to the issue of technology use in the delivery of health care. The Congressional Telehealth Caucus will welcome input from stakeholders to educate lawmakers, particularly those outside of committees with Medicare jurisdiction, about the importance of telehealth.   The four founding members of the caucus are Reps. Mike Thompson (D-Calif.), Gregg Harper (R-Mass.), Diane Black (R-Tenn.), and Peter Welch (D-Vt.). The Medicare Telehealth Parity Act (H.R. 2550) and the CONNECT for Health Act (S. 1016) were also introduced last week. Both bills would improve reimbursement for and expand the use of telehealth services. Components of the CONNECT for Health Act were included as part of the CHRONIC Care Act (S.870), which was advanced by the Senate Finance Committee earlier this month.   CBO Scores the American Health Care Act The Congressional Budget Office (CBO) has released its score of the American Health Care Act (AHCA), which would repeal and replace Obamacare. Per the non-partisan budget agency, AHCA would lead to 23 million more uninsured over the next decade. This estimate is in keeping with previous versions of the bill. The House-passed legislation, however, would produce fewer savings than previous versions of the bill. CBO estimates that the AHCA would reduce the deficit by $119 billion over the next ten years, down from earlier projections of $151 billion and $337 billion. Premiums would increase for two years before decreasing by 20 percent in 2018 and five percent in 2019. CBO predicts that the changes to the Medicaid program would reduce coverage by 10 million people and cut program funding by $834 billion over the next decade. The agency also warns that the bill could undermine the stability of insurance markets in one-sixth of the country – those states which choose to waive ACA insurance regulations. As a result, older and sicker Americans would see a drastic increase in the cost of their insurance coverage. While the score was well-received by Speaker of the House Paul Ryan (R-Wis.) for confirming that the bill would lower the deficit, Secretary of the U.S. Department of Health and Human Services (HHS) Tom Price questioned the score’s accuracy. In the Senate, some Republican members warned that the CBO’s analysis underscored the need for the upper chamber to pass legislation that does more to protect those with pre-existing conditions. Majority Leader Mitch McConnell (R-Ky.), however, reiterated that the ACA status quo was unacceptable and unsustainable, regardless of the CBO report.   Senate Repeal Legislation Drafting Senate staff spent the week of Memorial Day recess drafting a health care bill and building consensus around a plan to repeal and replace the Affordable Care Act (ACA). Staff conferred with the Senate parliamentarian to discuss which aspects of Obamacare repeal and replacement can be accomplished through reconciliation. Majority Leader Mitch McConnell (R-Ky.) confirmed that he does not yet have the votes to bring repeal legislation to the Senate floor.   The biggest sticking point appears to be Medicaid – lawmakers in the Senate cannot seem to agree on how much to scale back Obamacare’s expansion, or how to rein in program spending. Additionally, there is still disagreement about whether to allow states to waive the health care law’s insurance regulations, which require coverage of essential health benefits and community rating. The Senate GOP is currently in the early stages of weighing a proposal to stabilize the insurance market in 2018 and 2019, while postponing ACA repeal until 2020. Lawmakers are also considering the idea of reinsurance as an alternative to the use of high-risk pools to provide coverage to high cost patients.   Lawmakers Request Clarification on HHS Whistleblower Memo Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa) and House Oversight Committee Chairman Jason Chaffetz (R-Utah) have written to U.S. Department of Health and Human Services (HHS) Secretary Tom Price regarding HHS staff’s ability to speak to lawmakers. Agency employees received a memo telling them to contact the Office of the Assistant Secretary for Legislation prior to speaking with members of Congress. “Protecting whistleblowers who courageously speak out is not a partisan issue — it is critical to the functioning of our government,” the letter states. The lawmakers request that Secretary Price issue a clarification telling federal workers that they have a right to contact members of Congress.   Trump Seeks Further Delay in Health Care Subsidy Lawsuit The Trump administration again delayed a decision in a major case that could upend the health insurance markets created by the 2010 health care law, in a motion filed in federal court Monday. Justice Department lawyers asked in the motion for another 90-day delay in a case that centers on about $7 billion of annual subsidies that are aimed at making health care services more affordable for low-income people who gained coverage under the 2010 law.   The payments are “critical” to the success of the health marketplaces established by that law, insurance companies have testified to Congress. Without them, many insurers have warned they will stop selling plans in 2018.   Though the delay may be welcome politically, insurers were quick to decry the delay as bad policy. It leaves them facing uncertainty about a major aspect of the 2010 health care law’s funding, just as they must file their proposed 2018 health insurance premiums with state and federal policymakers. Some state deadlines for those proposals have already passed. The federal deadline is June 21.   The 90-day delay will force the companies to guess about the premiums they need to charge to cover the costs of insuring the individual market population. Regulators reviewing those rates will also have to speculate about whether the subsidies will remain in place. Some companies have suggested the uncertainty could force them to increase premiums by as much as 20 percent. Rates for the 2018 plan year are finalized throughout the fall according to various state and federal deadlines.