1. Congress

House of Representatives

Independent Payment Advisory Board (IPAB) Repeal Legislation Introduced

Last week, a bipartisan group of House lawmakers led by Reps. Phil Roe (R-TN) and Allyson Schwartz (D-PA) reintroduced legislation on Jan. 23 calling for a repeal of the Affordable Care Act's Independent Payment Advisory Board. The Protecting Seniors' Access to Medicare Act (H.R. 351) would eliminate the threat of automatic cuts to Medicare spending that could be imposed by the body. A similar measure within H.R. 5 passed the House in March 2012 but the bill was not taken up by the Senate last year. The CBO estimates that Medicare spending per beneficiary is projected to rise by only 3 percent over the next decade, a drop off from the 7 percent average growth rate over the previous decade, levels that would not trigger IPAB to identify spending cuts. "Given that Medicare only pays physicians only 80 percent of what private insurers do, any additional cuts could severely limit patients' access to care. This is because proposed cuts will likely reduce payments to physicians and other health care providers," Roe said in the statement.

Energy and Commerce Passes Bipartisan Health Bills

The House Energy and Commerce Committee unanimously passed two bipartisan bills out of committee this week, one establishing a national pediatric research network (H.R. 225) and another reauthorizing funding for a children's hospital graduate medical education program (H.R. 297) for five years. Both bills have shown widespread support in the past, with both having been passed by the House without objection in the previous Congress, though neither bill was taken up in the Senate last year. The National Pediatric Research Network Act of 2013 would help the National Institutes of Health finance programs aimed at finding cures and treatments to pediatric diseases and conditions. The Children's Hospital Graduate Medical Education Support Reauthorization Act would authorize funding for the training of medical students in pediatric care. With more than 56 hospitals in 30 states already participating in Children's Hospital GME, the program trains approximately 40 percent of the country's pediatricians.

Rep. Brady Tasked with Permanent Sustainable Growth Rate (SGR) Fix

Having recently become chairman of the Ways and Means Health Subcommittee, and having also been subsequently tasked with producing legislation to permanently fix the SGR formula, Rep. Brady (R-TX) stated that he hoped to have a solution prepared within the first half of this year. While a long-term solution to the essentially annual threat to physician payments under Medicare has evaded lawmakers since it began calling for an increasingly negative reimbursement update nearly a decade ago, Brady is optimistic, saying, "We think we have a good, solid, balanced approach derived from listening to physicians who are in the field, which creates a reliable formula they can count on and rewards quality." The American Medical Association (AMA) and provider groups across the country are certainly hoping he's right.

Health Insurer Tax Receives Mild Scrutiny from ACA Supporter

In a recent letter to the Treasury Department, Rep. Costa (D-CA) expressed concern for consumers who could see their health insurance premiums rise as a result of health insurers passing on the cost of a tax on health insurance providers set to take effect next year. In his letter, Costa asked Treasury to ensure implementation of the tax was open and transparent, and that among other things, the department consider excluding fees assessed on policyholders from income for tax purposes.

Ways and Means Chairmen Have Questions About CMS Data Accuracy

On Friday, Ways and Means Chairman Camp (R-MI) and Health Subcommittee Chairman Brady (R-TX) wrote a letter to HHS Secretary Sebelius asking several questions extending from a recent GAO communication to CMS expressing concerns about the reliability of some of the data CMS provides to Medicare beneficiaries. According to the letter, CMS provided inaccurate data to GAO regarding the number of Medicare Cost Contractors currently enrolling new Medicare beneficiaries, and that the "Medicare Plan Finder" tool on Medicare.gov "contained inaccurate information about the availability of certain Medicare cost contracts." Camp and Brady stated that they are interested in the actions CMS is taking to correct these errors, as the agency will play a major role in assisting millions of Americans access health insurance through exchanges in the coming years, pursuant to the ACA.

Senate

HELP Hearing on Mental Health Access

Last week, the HELP Committee held its first hearing on the issue of mental health in nearly six years. Titled "Assessing the State of America's Mental Health System," the hearing gave senators an opportunity to hear from federal officials and other experts in the field regarding topics including implementation of the 2008 mental health parity law and provisions in the ACA that aim to address problems with access to mental health services. While many Republicans opposed both laws, there is broad public support for increased mental health services in the wake of the Newtown, CT, shooting and subsequent calls to action by stakeholders and President Obama. Senators on both sides of the aisle spoke of their concerns regarding gaps in access to mental health care services, and Sen. Alexander (R-TN) expressed specific concern about governors' need for information regarding mental health parity laws as they consider expansions of their respective states' Medicaid programs.

Witnesses:

Panel I
Ms. Pamela Hyde
Administrator
Substance Abuse and Mental Health Services Administration (SAMHSA)

Dr. Thomas Insel
Director
National Institute of Mental Health at the National Institutes of Health

Panel II
Michael Hogan, Ph.D.
Former Commissioner, New York State Office of Mental Health
Chairman
President's New Freedom Commission on Mental Health

Robert Vero, Ed.D.
Chief Executive Officer
Centerstone of Tennessee

George DelGrosso, M.A.
Executive Director
Colorado Behavioral Health Council

Larry Fricks
Senior Consultant
National Council for Behavioral Health

For more information, including written witness testimonies, or to view the hearing, please visit the HELP Committee website.

Duo of Bipartisan Mental Health Bills Introduced

Continuing the theme of improving America's mental health system, two bipartisan bills were introduced in the Senate last week. Sens. Reed (D-RI) and Murkowski (R-AK) introduced a bill to reauthorize programs aimed at preventing youth suicide and bolstering mental health services for young people. In addition, Sens. Shaheen (D-NH) and Ayotte (R-NH) sponsored a bill that would fund mental health training programs and improve service referrals in local communities.

Sen. Alexander New Ranking Member of HELP Committee

As a result of previous ranking member Enzi's (R-WY) term limitation, Sen. Alexander (R-TN) has taken over as the top Republican on the powerful Senate HELP Committee. "Tennessee is helping lead the country in health care and education innovation, and this opportunity will give me a strong voice in reducing regulations that get in the way of private sector innovation, and getting Washington out of decisions that should be made by states, communities and individuals," Alexander said in a statement.

Grassley Pushes for Sunshine Act Implementation

On Tuesday, Sen. Grassley expressed frustration over the lack of regulations necessary to implement health sector transparency provisions contained in the Physician Payments Sunshine Act (Sunshine Act), enacted in March of 2010. The rule, now 15 months overdue, would require drug and device makers to disclose financial relationships with doctors. "These delays are disrupting the considerable efforts of the pharmaceutical and medical device manufacturers that are already investing in systems to comply with the law, as well as voluntary efforts of universities and even the National Institutes of Health to promote more transparent relationships between physicians and industry," Grassley wrote.

Comparative Effectiveness Bill Introduced

Last week, Sen. Roberts (R-KS) introduced a bill that would block HHS from using data derived from comparative effectiveness research (CER) to deny or delay coverage of a service under a federal health plan, such as Medicare. The bill, S. 133, is the latest iteration, including legislation cosponsored by Roberts last Congress, in a common theme among many Republican lawmakers leery of government overreach into individuals' health care decisions. According to Roberts, "We have seen how comparative effectiveness research works in Canada and the United Kingdom, and it is the patient that ends up paying the price for increased government intervention in the doctor-patient relationship."

GOP Bills Target Specific ACA Provisions

Characteristic of the GOP's pivot away from full-ACA repeal efforts in lieu of a strategy focused on peeling back some of the more contentious aspects of the law, two bills were introduced last week that would repeal taxes on small businesses and the requirement for individuals to possess qualifying health insurance coverage, both provisions having been established under the controversial law. Of his bill regarding small business taxes, Sen. Portman (R-OH) said that burdensome requirements on employers with more than 50 full-time workers and repealing taxes on insurance companies "imposed by this big-government health care law that will likely continue to cause premiums to rise, harm employers, and stifle consumer-driven health care." As for the repeal of the individual mandate, its sponsors -- Sens. Hatch (R-UT) and Alexander (R-TN) -- stated, "Congress should repeal the law, especially the individual mandate, and then proceed step by step to reduce the cost of health care so more Americans can afford to buy insurance."

2. Administration

Health and Human Services (HHS)

Employer Notice Requirement Delayed as Part of New ACA FAQ Document

Under the 11th set of frequently asked questions-and-answers on implementation of the Affordable Care Act, employers learned they will not need to notify employees of coverage available under the health insurance exchanges until regulations outlining the notification requirements are issued. The ACA called for employers to provide employees with a written notice no later than March 1, but the Department of Labor has determined that such notice should coincide with HHS outreach efforts and IRS guidance on minimum value, and the administration said the extra time would help employers. The FAQs also address questions regarding integration of coverage under health reimbursement arrangements (HRAs) and clarify that the joint board of trustees of a multiemployer plan may be subject to fees established under the ACA used to fund the Patient-Centered Outcomes Research Trust Fund.

Centers for Medicare and Medicaid Services (CMS)

CMS Seeks Information for Patient Experience Survey

On Friday, CMS announced its intent to develop a standardized Hospital Outpatient Surgical Department/Ambulatory Surgical Center (HOSD/ASC) Experience of Care Survey to evaluate patients' experiences and the care they received. Specifically, CMS is looking for information-related communication between patients and health care providers, access to care (including follow-up care) and care coordination. According to the announcement, "[w]e are seeking topic areas, surveys, questions and measures that are applicable across outpatient surgical settings (for example, freestanding settings, hospital based settings, for-profit settings; not-for-profit settings; rural settings; urban settings; multi-specialty and single-specialty surgery departments/centers)." CMS said it plans to submit the survey to the Agency for Healthcare Research and Quality (AHRQ) for recognition as a CAHPS survey.

3. State Activities

Vermont Single-Payer Plan

A new report from Vermont Gov. Peter Shumlin's administration finds the state's single-payer system will cost about $3.5 billion, with Vermont liable for about $1.6 billion. Pursuant to a 2011 law in which Vermont's state legislature set forth a broad outline of a universal coverage health care system, the state of Vermont Agency of Administration Health Care Reform delivered a report describing the expected cost of the state's single-payer health plan, but the 156-page report found that there are too many unknowns in order to recommend specific funding sources. "We need to gather broad input on financing prior to finalizing on the right final mix of revenues," according to the report. "Publicly financed health insurance coverage will make sense to most Vermonters, but we have to explain it and we need input on how best to spread the cost burden. Because of this, the administration is not asking the Legislature to endorse a specific financing plan during this session."

Florida Democrats Ask Sebelius Not to Rush Medicaid Waiver Decision

In response to a request made by Republican Florida Gov. Rick Scott for HHS Secretary Sebelius to expedite approval of a statewide expansion of a previously approved pilot program to test managed care delivery for Medicaid enrollees, all 10 Democratic members of Florida's delegation in the U.S. House reached out in a letter to Sebelius earlier this month urging caution in her decision. "We urge you to take more time to listen to stakeholders on the worrisome effects the long term care privatization may have on Florida seniors and disabled and, if possible, craft solutions that ensure that Florida seniors are not taken advantage of," the group wrote. "There has been no conclusive evidence proving that this scheme saves money or better coordinates care," they noted. "In fact, we have heard from many stakeholders on the ground that patients have lost access to care. A failed experiment should not be the foundation for statewide expansion."

4. Regulations Open for Comment

HHS Issues Medicaid, CHIP, Exchange Eligibility Rule

On Jan. 1, HHS posted a proposed rule to implement provisions of the ACA and the Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA). Notable provisions include:

Eligibility Appeals Process
The rule proposes a coordinated Exchange and Medicaid appeals process such that enrollees will first have the opportunity for a preliminary case review by appeals staff, referred to as "informal resolution." State-based Exchanges would have the flexibility to implement their own appeals processes in accordance with the NPRM's standards, with individuals retaining the right to a federal appeal at HHS after exhausting the state-based appeals process.

Notices
The rule proposes that notices to applicants and beneficiaries would include combined, clear and accurate information about eligibility for all insurance affordability programs, including Medicaid, CHIP, advance payments of the premium tax credit and cost-sharing reductions, as well as eligibility to enroll in a qualified health plan through the Exchange. This coordinated process would not be required to be in place until Jan. 1, 2015, or, optionally, at an earlier date if all relevant agencies have the necessary systems in place.

Medicaid Benefits
The proposed rule modifies existing "benchmark" regulations applicable to Medicaid programs, as previously described in a letter to state health officials, to implement the benefit options available to low-income adults beginning Jan. 1, 2014.

Verification of Employer-sponsored Coverage
The proposed rule includes detail on the procedures for the Exchange to verify access to employer-sponsored coverage. It also proposes that an Exchange may opt to fulfill the employer-sponsored coverage verification process by relying on HHS.

Comments must be received no later than Feb. 13, 2013.

A fact sheet is available from www.cms.gov.

Employer Health Care Coverage of Dependents Under ACA

Treasury and IRS released a notice of proposed rules (REG-138006-12) Dec. 28 on employer-provided health care coverage related to ACA's employer "shared responsibility" provisions, which were added to the tax code under Section 4980H. Starting in 2014, employers with at least 50 full-time and/or full-time equivalent employees (FTEs) will be required to offer affordable health care coverage that provides a minimum level of coverage or pay a penalty. These proposed regulations would affect only employers that meet the definition of "applicable large employer" as described in these proposed regulations. As discussed in section X of this preamble, employers may rely on these proposed regulations for guidance pending the issuance of final regulations or other applicable guidance. This document also provides notice of a public hearing on these proposed regulations.

Comments on the proposed rule must be received by March 18, 2013.

Guidance for Industry Abuse-Deterrent Opioids -- Evaluation and Labeling

The FDA has issued guidance intended to assist sponsors who wish to develop formulations of opioid drug products with potentially abuse-deterrent properties (abuse-deterrent formulations). Specifically, the guidance explains FDA's current thinking about the studies that should be conducted to demonstrate that a given formulation has abuse-deterrent properties, how those studies will be evaluated, and what labeling claims may be approved based on the results of those studies. FDA will accept comments on the guidance received by March 11, 2013. See FDA's press release.

Food and Drug Administration (FDA) Proposes New Food Safety Rules

The FDA has proposed new rules on food safety, including regulations on good manufacturing practices standards for growing, handling and packaging produce. Specifically, to minimize the risk of serious adverse health consequences or death from consumption of contaminated produce, the FDA is proposing to establish science-based minimum standards for the safe growing, harvesting, packing and holding of produce, meaning fruits and vegetables grown for human consumption. FDA is proposing these standards as part of its implementation of the FDA Food Safety Modernization Act (FSMA). These standards would not apply to produce that is rarely consumed raw, produce for personal or on-farm consumption, or produce that is not a raw agricultural commodity. The proposed rule would also set forth procedures, processes and practices that minimize the risk of serious adverse health consequences or death, including those reasonably necessary to prevent the introduction of known or reasonably foreseeable biological hazards into or onto produce and to provide reasonable assurances that the produce is not adulterated on account of such hazards.

Another proposed rule would amend FDA's current regulation for Current Good Manufacturing Practice In Manufacturing, Packing, or Holding Human Food (CGMPs), which requires domestic and foreign facilities that are required to register under the Federal Food, Drug, and Cosmetic Act (FD&C Act) to establish and implement hazard analysis and risk-based preventive controls for human food. FDA also is proposing to revise certain definitions in FDA's current regulation for Registration of Food Facilities to clarify the scope of the exemption from registration requirements provided by the FD&C Act for "farms."

Comments on both proposed rules are due by May 16, 2013.

Additional "Meaningful Use" Guidance Issued

HHS has issued an interim final rule with comment period revising the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs, updating a few technical specifications for EHR systems participating in the meaningful use program, in addition to adjusting some elements for hospital Stage 2 reporting requirements. The rule also provides notice of CMS's intention to issue technical corrections to the electronic specifications for clinical quality measures (CQMs) released on Oct. 25, 2012. A 60-day public comment period will expire Feb. 4, 2013.

Additional Medicare Tax for Wealthy Beneficiaries

This proposed regulation addresses issues relating to Additional Hospital Insurance Tax on income above threshold amounts ("Additional Medicare Tax"), as added by the Affordable Care Act. Specifically, the proposed regulation provides guidance for employers and individuals relating to the implementation of Additional Medicare Tax. This document also contains proposed regulations relating to the requirement to file a return reporting Additional Medicare Tax, the employer process for making adjustments of underpayments and overpayments of Additional Medicare Tax, and the employer and employee processes for filing a claim for refund for an overpayment of Additional Medicare Tax. The document also provides notice of a public hearing scheduled for April 4, 2013, on these proposed rules. The deadline for submitting comments on the proposed regulation is March 1, 2013.

5. Reports

Congressional Budget Office (CBO)

Government Will Save on Refundable Tax Credits This Year

The Congressional Budget Office estimates that the government will spend only $149 billion on credits in 2013. In 2008, it spent $238 billion. However, the CBO noted that "by 2021, the amount will increase to $213 billion due to new refundable tax credit ... available to some people for the purchase of health insurance through newly created exchanges." The full report is available from the CBO website.

HHS -- Office of the Inspector General (HHS-OIG)

Medicare Improperly Paid Health Care Costs for Noncitizens

On Jan. 24, the Department of Health and Human Services Office of Inspector General released two reports finding that the Centers for Medicare and Medicaid Services made $126 million in improper payments for services for illegal immigrants and prisoners between 2009 and 2011. Federal law prohibits CMS from paying for services to prisoners and illegal immigrants. As a result, OIG recommended that CMS recover the improper payments and implement new policies to detect and recover improper payments and to ensure payment accuracy. CMS said it will implement new procedures in April and will consider recovering the improper payments. It stated, "[i]n recovering overpayments, CMS must take into account the respective cost benefit of recoupment activities, including potential appeal costs and efforts to manually reopen, reprocess, and track these claims." The full report can be found at the HHS-OIG website.

Institute of Medicine (IOM)

Veterans with Multiple Chronic Conditions Require Customized Care

A recently released Institute of Medicine report found veterans with chronic multi-symptom illness (CMI) will need customized care, and no single treatment or therapy will help all symptoms. Veterans who have CMI experience fatigue, joint and muscle pain, gastrointestinal symptoms and cognitive symptoms such as memory difficulties. There is no consensus among health professionals as to the cause of CMI. The Committee on Gulf War and Health Chairman, Bernard Rosof, stated, "we endorse individualized health care management plans as the best approach for treating this very real, highly diverse condition."

Journal of the American Medical Association (JAMA)

Reduce Hospital Readmissions to Save Medicare Spending

The Journal of American Medical Association released a report stating that cutting down on unnecessary hospital readmissions could cut Medicare costs. According to JAMA, by reducing hospital readmission rates by 6 percent, the average community could save $4 million per year on hospital bills. Researchers said the solution is coordinated care for patients after leaving the hospital and stronger relationships between hospitals and nursing homes. The report is available online (subscription required).

American Hospital Association (AHA)

Economic Contribution of Hospitals Often Overlooked

The American Hospital Association released a fact sheet on the importance of the hospitals to the economy. It noted hospitals employ 5.5 million people, but with "ripple effects," hospitals employ upward of 15.4 million people. It said that hospitals are the "second-largest source of private sector jobs." The fact sheet is supposed to remind policymakers of the importance of hospitals and the health care industry when considering deficit reduction plans in the coming months.