1. Congress

House

Reps. Rodgers, Tsongas Garner Bipartisan Support for Teaching Health Center GME Program

Reps. Cathy McMorris Rodgers (R-WA) and Niki Tsongas (D-MA) are garnering support for reauthorizing at least three years of funding for the Teaching Health Center Graduate Medical Education (GME) program—a program that helps teaching health centers train providers. More than 90 lawmakers have signed onto a dear-colleague letter to House Energy & Commerce Committee leaders.

Osteopathic physicians say the program, while small compared to Medicare GME grants, could be a model for reforming Medicare GME because the program is transparent and has succeeded in training and retaining physicians in medically underserved areas.

The program, which is run by the Health Resources and Services Administration, expires after Sept. 30. It is on a long list of programs that expire this year, and the American Osteopathic Association hopes to bring attention to the program to increase the chances that it will be included in expected legislation reauthorizing many of the expiring programs at the end of the year.

HRSA’s teaching health center GME program is designed to train primary care providers in areas of the country that need it most. The Medicare GME program includes direct and indirect payments to hospitals, and lawmakers have criticized indirect Medicare GME because hospitals do not have to use the money for training doctors.

John Sealey, an osteopathic surgeon and director of medical education at Authority Health in Detroit, said the Teaching Health Center GME program requires health centers to account for every dollar they spend. The program works well because it lets health centers use the money to tailor the training of residents to the areas they serve. The health center programs must meet the same criteria as traditional Medicare GME, Sealey said, but the funding can also be used for additional training, such as the population health certificate that Authority Health created. To be certified in population health, physicians must visit homeless shelters and food banks to help them deal with the root causes of health problems for patients in their area, such as hunger and poor diets.

Lawmakers Ask for Mental Health Program Funding

The co-authors of the bipartisan legislation Helping Families in Mental Health Crisis Act are asking appropriators to fund the programs authorized by the new law. Reps. Tim Murphy (R-PA) and Eddie Bernice Johnson (D-TX) sent a letter to House Appropriations Chairman Tom Cole and ranking member Rosa DeLauro asking that the committee consider funding the programs the mental health reform legislation included in the 21st Century Cures Act.

“Treatment delayed is treatment denied—waiting to fund this law will contribute to more crime, violence, homelessness, and the daily loss of 959 Americans as a result of a mental illness,” the letter states.

To see the letter, click here.

Senate

Senate Bill Aims to Increase Number of Doctors in Rural Areas

A bipartisan group of senators unveiled a bill to increase the number of doctors in rural and other medically underserved areas. The legislation, which has been endorsed by major health organizations, would allow international doctors trained in the United States to remain in the country if they practice in underserved areas.

The bill—sponsored by Sens. Amy Klobuchar (D-MN), Susan Collins (R-ME) and Heidi Heitkamp (D-ND)—extends the “Conrad 30” program that allows 30 doctors per state to remain in the country without having to return home if they agree to practice in an underserved area for three years. The measure allows for the program to be expanded beyond 30 slots if certain thresholds are met. The bill also allows the spouses of doctors to work and provides worker protections to prevent the doctors from being mistreated. The legislation has been endorsed by the American Medical Association, the American Hospital Association and the Association of American Medical Colleges.

For more information, click here.

MedPAC Finalizes Draft Recommendations to Curb Part B Drug Prices

On April 6, congressional Medicare advisers finalized recommendations for Congress aimed at reducing growth in Part B drug spending.

The vote was unanimous in favor of the recommendations, but a few Medicare Payment Advisory Commission (MedPAC) members said they dislike some of the policies, and the option to allow a third-party arbiter to determine prices for drugs that do not have competition caused the most debate.

The commission recommended modifying the reimbursement for Part B drugs that are paid for based on wholesale acquisition cost (WAC)—a manufacturer’s undiscounted price to wholesalers or direct purchasers. Under the proposals, the payment rate for WAC-priced drugs would be reduced to WAC plus 3 percent, down from the current rate of WAC plus 6 percent.

MedPAC recommended requiring all Part B drug manufacturers to submit annual average sales price data. Currently, only Medicare Part B drug manufacturers with Medicaid drug rebate agreements are required to submit annual average sales price data.

For drugs that are paid for based on average sales price, physicians and hospital outpatient departments are typically paid the ASP of a drug, plus a 6 percent add-on. The proposals would require manufacturers to pay Medicare a rebate with the ASP for their product if it exceeds an inflation benchmark such as the consumer price index.

The commission also recommended creating a voluntary Drug Value Program that would be phased in by 2022. Under the program, private vendors would negotiate lower Part B drug prices.

The Pharmaceutical Research and Manufacturers of America and the Community Oncology Alliance oppose the recommendations, which they say threaten patient access to therapies. \

2. Administration

Trump Administration Finalizes Obamacare Stabilization Rule

On April 13, HHS released a final rule it says will help stabilize Obamacare’s insurance markets as the administration plans a broader repeal strategy. The rule implements a series of policies tightening enrollment standards.

The final rule makes several policy changes to improve the market and promote stability, including:

  • 2018 Annual Open Enrollment Period: The final rule adjusts the annual open enrollment period for 2018 to more closely align with Medicare and the private market. The next open enrollment period will start on Nov. 1, 2017, and run through Dec. 15, 2017, encouraging individuals to enroll in coverage prior to the beginning of the year.
  • Reduce Fraud, Waste and Abuse: The final rule promotes program integrity by requiring individuals to submit supporting documentation for special enrollment periods and ensures that only those who are eligible are able to enroll. It will encourage individuals to stay enrolled in coverage all year, reducing gaps in coverage, resulting in fewer individual mandate penalties and helping to lower premiums.
  • Promote Continuous Coverage: The final rule promotes personal responsibility by allowing issuers to require individuals to pay back past due premiums before enrolling into a plan with the same issuer the following year. This is intended to address gaming and encourage individuals to maintain continuous coverage throughout the year, which will have a positive impact on the risk pool.
  • Ensure More Choices for Consumers: For the 2018 plan year and beyond, the final rule allows issuers additional actuarial value flexibility to develop more choices with lower premium options for consumers, and to continue offering existing plans.
  • Empower States & Reduce Duplication: The final rule reduces waste of taxpayer dollars by eliminating duplicative review of network adequacy by the federal government. The rule returns oversight of network adequacy to states that are best positioned to evaluate network adequacy.

To see the rule, click here.

CMS Announces Oncology Care Model Stakeholder Feedback Opportunity

The Oncology Care Model (OCM) team will be hosting the OCM Stakeholder Public Forum on Thursday, May 11, 2017, from 1-4 p.m. EDT. CMS invites all interested OCM stakeholders to attend the public forum, with the goal of hearing feedback about OCM.

The forum will include a brief introduction from the OCM team followed by discussion. An agenda will be sent to registrants two weeks prior to the forum and will include gathered topics that may be submitted via the text field in the registration link below. Attendees may attend virtually or in-person at the Centers for Medicare & Medicaid Services Central Office located at 7500 Security Boulevard, Baltimore, Maryland 21244.

Space is limited, so if planning to attend in person, registration is suggested as soon as possible. Each organization is requested to limit its in-person attendance to two individuals. In-person attendees are on a first-come, first-serve basis. Registration will close one week in advance of the forum. Persons who are not registered will not be permitted to enter the CMS Central Office and thus will be unable to attend the forum.

Registration is available via this link until 5 p.m. EDT, May 4, 2017.

For questions or additional event information, email OCMSupport@cms.hhs.gov.

CMS Releases 2015 Data on Geographic Variation in the Medicare Program

On April 11, CMS posted the annual release of the Geographic Variation Public Use File with data for 2015. The Geographic Variation Public Use File is a series of downloadable tables and reports that contain demographic, spending, utilization and quality indicators for the Medicare fee-for-service population. It presents data at the state (including the District of Columbia, Puerto Rico and the Virgin Islands), hospital referral region (HRR) and county levels.

This public use file can be downloaded here.

VHA Introduces Scheduling Transparency Website

On April 12, the Veterans Health Administration (VHA) released a website that shows how long patients are waiting for appointments at VA hospitals and clinics and provides quality information comparing VA centers with private-sector hospitals.

The website, developed in-house, is the only one of its kind in the country. While it does not allow patients to schedule appointments themselves, it eventually will be linked directly to a new VA scheduling system, said Poonam Alaigh, the department’s acting undersecretary for health.

The system lists average wait times for different specialties and is adding comparative data on hospitals in cities and towns, as well as Yelp-style reviews by veterans.

In a demo in Washington, VA officials showed that patients had average waits of 11 to 56 days at eight VA primary care clinics in Phoenix. Noting that 56 days was a long wait, Alaigh said transparency could inspire competition and improvement in the system.

The site was to be officially released May 1. It showed that veterans currently have about 3,000 pending urgent referrals to specialists. When the VA started attacking that problem in November 2015 by simplifying the department’s byzantine scheduling system, there were more than 57,000 in that category, Alaigh said.

White House Calls for Agencies to Shrink Their Workforces

On April 12, the White House directed federal agencies to make deep personnel cuts over the next year. Agency heads are to receive a 14-page memorandum outlining changes. The memo, which replaces the federal hiring freeze Trump enacted in January, outlines cuts based on Trump’s skinny budget, released last month. The budget proposal called for deep cuts to domestic programs and an increase in military spending.

The memo tells agencies to submit a plan by June 30 that will save money and reduce their staffs. They must also come up with an agency reform plan to shrink personnel to accommodate long-term budget reductions.

Office of Management and Budget Director Mick Mulvaney said some agencies such as the Defense Department and Veterans Affairs will add staff.

The memo says that agencies should eliminate programs that are duplicative, nonessential to the agency’s mission or are already carried out in some form by state and local government.

Mulvaney insisted the process could be bipartisan and include public input.

3. Other

Adapt Pharma Expands Free Nasal Spray Program to Colleges and Universities

On April 10, Adapt Pharma announced it is donating 20,000 cartons of the anti-opioid-overdose nasal spray Narcan to colleges and universities.

The new effort was announced by the company and former President Bill Clinton in Little Rock, Arkansas, at the Clinton Health Matters Activation Summit. It builds on an effort by the initiative and the company, focused on K-12 schools, which has already led to the donation of 3,300 doses of the spray to high schools in 33 states.

The Centers for Disease Control and Prevention has said that heroin use in the last decade has more than doubled among young adults aged 18 to 25—a rise that has coincided with an increase in heroin deaths.

The spray can be used for the emergency treatment of known or suspected opioid overdoses. Each carton contains two doses.

Colleges and universities can sign up to participate here.

4. State Activities

California: New Figures Show Higher Vaccination Rates in Children

California public health officials recently reported the highest kindergarten vaccination rates in more than 15 years. New figures show nearly 96 percent of kindergartners in the 2016-17 school year were vaccinated, a three-point jump from the previous school year.

A law passed last year nixed the state’s “personal-belief” provision that allowed parents to refuse vaccinating their kids for virtually any reason, and all children without medical exemptions must now be vaccinated before starting school. Vaccination rates had dropped in recent years as more parents opted out, but a measles outbreak at Disneyland in early 2015 drew national attention to the issue.

Florida: Trump Administration Gives Florida Nearly $1 Billion in Supplemental Medicaid Payments

The Trump administration has increased by nearly $1 billion the amount of supplemental Medicaid payments Florida is set to receive in the upcoming year.

Florida Gov. Rick Scott praised the administration, saying in a statement that “it is great to have a partner in Washington who is willing to work with us to help our state.”

The former Obama administration had pared back the amount of money Florida received for its Low Income Pool (LIP) from a high of $2 billion to $608 million in 2015, and set an expiration date of June 30 after the state refused to expand Medicaid. The administration maintained that supplemental Medicaid spending programs were not a good use of tax dollars and that providing people access to health care coverage was a better use of the money.

Scott sued the Obama administration in federal court to force it to continue Florida’s supplemental Medicaid funding but eventually dropped it.

The governor has been working closely with the Trump administration to continue LIP funding. The approval comes as the Florida Legislature works on its budget for the upcoming fiscal year, which begins July 1.

Kentucky: Consultants Prepare Draft Documents for Kentucky Medicaid Expansion

Consultants that helped create Kentucky’s new Medicaid expansion model are developing key operational details for the program. New draft documents were prepared by Deloitte Consulting for SVC—the Indiana-based consulting firm founded by now-CMS Administrator Seema Verma.

Kentucky initially opted for the traditional expansion under Democratic Gov. Steve Beshear that covered more than 400,000 people. Gov. Matt Bevin has asked federal officials for several changes that could curtail enrollment. Among other things, Bevin’s plan would institute premiums for the entire expansion population—ranging from $1 to $15 per month, depending on income—a work requirement, penalties for using the ER inappropriately, HSA-style accounts, and a waiver of non-emergency medical transportation benefits.

Massachusetts: Massachusetts Seeking Waiver to ACA’s Employer Mandate

Massachusetts is seeking a waiver to the ACA’s employer mandate, and to allow a state-based reinsurance and risk adjustment program to stabilize the health insurance market. The state wants HHS Secretary Tom Price and CMS Administrator Seema Verma to relax reporting and tax requirements immediately to allow more state flexibility to build on its coverage successes. The state is asking Verma to allow states to implement their own employer-sponsored coverage alternative, including swapping out the federal employer mandate for a state-based approach. The state also wants more control over its merged nongroup and small group markets and the state-specific way of rating factors. Massachusetts wants more control over risk adjustment, reinsurance, health insurance coverage standards and operation of the state’s marketplace, as well.

Massachusetts would also like to waive small business taxes and allow states to allocate them based on their own criteria.

Oklahoma: Oklahoma Weighs Heavy Cuts to Provider Pay, Medicaid Benefits

Oklahoma’s Medicaid agency is considering cutting provider reimbursement rates by 25 percent and eliminating several optional benefits amid ongoing budget issues, officials said April 11.

This is the second straight year that Oklahoma is considering a 25 percent cut to provider rates. Oklahoma ultimately avoided painful cuts to provider rates and benefits last year, but a dire outlook for fiscal year 2018 is forcing the state to reconsider.

Oklahoma will consider eliminating or reducing benefits related to pharmacy, behavioral health treatment, dialysis, adult organ transplants, hospice services and private duty nursing services, among others.

Cutting provider reimbursement rates by 25 percent would put physician payment levels at 65 percent of Medicare rates, officials said. The reductions would affect all provider types, including hospitals, nursing facilities and pharmacy.

Pennsylvania: CMS Announces $10 Million for Pennsylvania’s Medicare Rural Health Model

On April 11, CMS announced that $10 million in startup funds is now available for the Pennsylvania Department of Health to set up its new alternative payment model for Medicare in rural hospitals. The model will be tested over seven years, four of which will be partially funded by CMS. HHS Secretary Tom Price is authorizing the initial $10 million for the Pennsylvania Rural Health Model through CMS’s innovation center; after 12 months, Pennsylvania can apply for an additional $15 million to continue implementation.

The model was launched Jan. 12 and testing will run through the end of 2023. The demonstration aims to forge a large-scale payer and rural hospital network, according to the CMS model summary.

The new model would move away from Medicare fee-for-service and set a prospective budget for all Medicare payers for each participating rural hospital. The budget is based on the total net revenues historically paid to these hospitals for inpatient and outpatient care. Under the model, payers will each pay their part of the global budget to the hospitals. The overall budget for each hospital must be approved by CMS.

The idea is to let hospitals better predict their costs so they can start investing in better care. The rural hospitals that join the effort will have to bring their stakeholders and communities into long-term planning for higher quality care and preventive care. The state will help the hospitals adapt their systems for the new payment model.

Six rural hospitals will take part in 2018, at least 18 in 2019 and at least 30 in subsequent years. Pennsylvania agreed to have each rural hospital’s global budget represent 75 percent of that hospital’s net revenue by 2018 and at least 90 percent of their net revenue for the rest of the testing period.

Pennsylvania will also try to bring Medicaid payers into the model, according to CMS. The state is aiming to save $25 million in Medicare hospital costs throughout the seven-year period, and the per-person Medicare yearly inflation rate must be budget neutral.

Texas: House Committee Considers Bill to Provide Information on Vaccination Levels

The Texas House public health committee recently heard testimony on a bill that would require schools to provide more detailed information about vaccination levels amid growing rates of unvaccinated children. Bill supporters say that the data about school vaccination rates would provide transparency to parents worried about the spread of chidlhood diseases. But parents who do not vaccinate their children said the bill would foster bullying and discrimination against their children. Since 2003, when the state made it easier for people to opt out of vaccines, the number of unvaccinated children in Texas has climbed to nearly 45,000.

5. Regulations Open for Comment

FDA Considers Establishing New Office of Patient Affairs

The FDA is considering establishing a new Office of Patient Affairs that would centralize its work on patient involvement in the review and approval of drugs and medical devices, according to a March 14 notice in the Federal Register.

Comments on the new office are due by June 12, 2017.

FDA Proposes 1,000 Medical Devices to Exempt From Premarket Notification

On March 14, FDA took one of its first actions to begin implementing the 21st Century Cures Act, by proposing more than 1,000 medical devices it will exempt or partially exempt from the premarket review process. The devices on the list are sufficiently well understood and do not present risks that require premarket notification to provide a reasonable assurance of safety and effectiveness, FDA said. The agency will finalize the list after a 60-day public comment period. Comments are due by May 15, 2017.

FDA Extends Comment Period on Biosimilar Interchangeability Guidance

FDA is extending the public comment period for its draft guidance outlining how biosimilar sponsors can demonstrate that their products are interchangeable with other biologics, following extension requests from top trade associations.

The agency laid out in a January 2017 draft guidance its first attempt at codifying the requirements that sponsors must satisfy to demonstrate interchangeability. The agency said it would make case-by-case determinations of interchangeability, but indicated it would require studies measuring the impact of switching on clinical pharmacokinetics and pharmacodynamics.

The Biotechnology Innovation Organization (BIO), Pharmaceutical Research and Manufacturers of America and Covington & Burling all requested comment period extensions, according to documents posted on Regulations.gov.

The comment period, which was set to close on March 20, will be extended 60 days until May 19.

CMS Releases Proposed Hospital Pay Rule

In a new proposed 2018 Medicare payment rule, CMS says it will look to cut hospital industry regulations and streamline oversight, and it’s asking hospitals themselves for help. The agency is soliciting ideas for changes to rules and procedures governing acute-care and long-term care hospitals. The initiative aims to “relieve regulatory burdens for providers,” as well as promote flexibility and innovation, CMS said in a statement.

The new proposed rule would suspend for one year a provision penalizing long-term care hospitals that receive more than 25 percent of patients from a single acute-care hospital. It would also reduce certain quality reporting requirements for hospitals that have implemented electronic health records.

CMS projects the rule would increase Medicare spending on inpatient hospital services by $3.1 billion in 2018, with operating payments to hospitals increasing 2.9 percent. Long-term care hospitals’ Medicare payments are projected to decrease by $173 million, or 3.75 percent, over the same period.

Comments on the rule must be submitted no later than 5 p.m. EDT on June 13, 2017.

6. Reports

MACPAC Weighs in on Capitated Rates and Medicaid

Analysts from the Medicaid and CHIP Payment and Access Commission (MACPAC) say that lawmakers who want to convert federal Medicaid funding into per-person payments can look at how states negotiate capitated rates with managed care plans and the budget neutrality of waivers with CMS to forge a system that would work well for states and the federal government.

Twenty-six states currently run their Medicaid programs through some kind of capitated system. However, the system works differently in each state, and it also works on different levels: There is the federal level, where CMS negotiates budget-neutral 1115 waivers with states to allow them to run their programs through capitated managed care systems. Then there is the private insurer level, where managed care plans negotiate contracts with states.

The federal government, states and managed care plans enter into these contracts so they can benefit from them, MACPAC says, and lawmakers need to keep in mind that the contracts are voluntary—which makes them fundamentally different than how mandatory contracts under a capped system would look. States enter into both 1115 waiver agreements and managed care contracts because they want to. Therefore, they have negotiating leverage with both CMS and insurers. Such leverage would not exist if states are forced into per-capita caps.

The MACPAC report makes the case that in order for a national per-capita cap system to work, federal lawmakers need to establish: fair and transparent guidelines for negotiations between the states and federal government; regular review of rates and rate-setting measures to make sure they are adequate; and detailed agreements that clearly define the responsibilities of both CMS and the states.

These approaches, the analysts write, may help Congress as they try to make a single, cohesive policy for states that have developed their own distinct Medicaid programs that so far haven’t needed to mix with or consider other states’ policies or programs.

The report incorporates questions raised by MACPAC members at the commission’s March meeting on potential unintended consequences of per-capita caps on state policy. A few advisers on the panel warned that per-capita caps may stick states into a rigid system that wouldn’t allow for the current practice of fluid, as-needed rate adjustments or negotiations between CMS, states and the managed care plans that administer Medicaid in most states.

Throughout the AHCA debate, beneficiary advocates have argued that a per-capita allotment would destroy the federalist structure of Medicaid.

For more information, click here.

MACPAC Report Finds 5 States to Run Out of CHIP Funds at Beginning of Fiscal Year 2018

Four states and the District of Columbia will run out of their federal funds for the Children’sHealth Insurance Program (CHIP) at the start of fiscal 2018 if Congress does not reauthorize the money, the Medicaid and CHIP Payment and Access Commission reports. By the second quarter, 29 more states would exhaust their program funding, the report said.

Under current law, if states have not spent all the federal CHIP funds they are entitled to, that money can be redistributed to other states that have fallen short. Therefore, states with fiscal 2017 funding still available will see their payments reduced by one-third, MACPAC reports.

Arizona, California, D.C., Minnesota and North Carolina will overspend on the program this fiscal year, but will receive payments from other underspending states to cover their shortfall until fiscal 2018.

Once the new fiscal year starts on Oct. 1, leftover funds from this fiscal year—estimated to be about $4.2 billion—can be passed around to states that come up short.

States that run their CHIP separate from Medicaid can stop coverage for children—calculated as 3.7 million in fiscal 2015—under the program, if federal funding runs out. These children would be eligible for subsidized plans on the ACA state exchanges or for employer-sponsored insurance, according to the MACPAC report. About 1.1 million children would lose coverage and if a state shuts down their program they wouldn’t have to pay many of the costs for children insured on the exchanges or on their parents’ employer-sponsored plans.

States that run a CHIP-Medicaid expansion program will receive their traditional Medicaid federal funding rate instead of the enhanced rate mandated for CHIP, the report states. Although by law states wouldn’t be allowed to roll back eligibility levels through fiscal 2019 at the earliest, MACPAC warns that states might ultimately block access to care as they try to save money through cutting payment rates for providers or adding new prior authorization requirements.

To see the report, click here.

New Report Shows FDA Approving More Drugs Than its European Counterpart

According to new findings published in the New England Journal of Medicine, FDA has recently approved more new therapeutic agents than its counterpart—the European Medicines Agency (EMA). FDA clocked 170 approvals between 2011 and 2015, compared to EMA’s 144, according to the analysis.

Although FDA reviewed applications faster, the report shows the agency approved about the same percentage of drugs as EMA in each therapeutic area, so FDA was not less critical than EMA.

FDA appeared to outperform EMA in approvals for all therapeutic areas studied. The U.S. agency approved more drugs than EMA to treat cancer and hematologic disease, cardiovascular disease, diabetes mellitus and hyperlipidemia, and infectious diseases.

FDA also approved drugs faster than EMA. It took FDA an average of 306 days to review drugs, whereas it took the EMA an average of 383 days.

The new analysis also highlights the popularity of FDA’s orphan drug program. FDA granted more drugs orphan status than EMA and approved orphan applications at a higher rate than EMA.

GAO: CMS Oversight of Efforts to Reduce Improper Billing Needs Improvement

According to a new GAO report, CMS has oversight issues that have led to billions of dollars in improper payments in the Medicare fee-for-service program. In 2016, the program made $41.1 billion in improper payments.

To help ensure that payments are made properly, CMS contracts with Medicare Administrative Contractors (MACs) to educate health care providers. GAO reviewed the contractors and found issues with CMS’s requirements and oversight of them. For example, MACs are not required to educate some providers about proper billing for certain services with high improper payment rates.

GAO recommended that CMS require MACs to educate these providers and establish metrics to determine if certain MAC reviews help reduce billing errors.

To see the full report, click here.