Congress Objects to Possible Changes to Medicare Group Appeals Process

On July 23, Senate Commerce Committee member Dan Coats (R-IN) and House Ways and Means Committee member Todd Young (R-IN) sent a joint letter to CMS Administrator Marilyn Tavenner raising concerns over a provision in the FY 2015 Hospital Inpatient Prospective Payment Systems ("IPPS") proposed rule that could make it more difficult for hospitals to effectively contest Medicare reimbursement laws and regulations. The letter, which was sent at the request of Hall Render acting on behalf of over 450 hospitals from around the country, notes the proposed changes could make it more difficult for hospitals to pursue cost report appeals before the Provider Reimbursement Review Board and prohibit hospitals from participating in a group appeal based on changes to Medicare reimbursement policy printed in the Federal Register unless their cost report has been filed. 

The proposed rule could be finalized and released as early as Friday, August 1. If these changes occur, congressional intervention may be necessary in order to protect a provider's Medicare reimbursement appeal rights.

Courts Divided on ACA Subsidies

Congress is mulling a pair of July 22 federal appeals court decisions on the Affordable Care Act ("ACA") subsidies provisions.  The U.S. Court of Appeals for the D.C. Circuit released its opinion in Halbig v. Burwell, which says insurance subsidies cannot be awarded through the insurance exchange run by the federal government.  Later in that same morning, the U.S. Court of Appeals for the Fourth Circuit in Richmond, Virginia ruled that subsidies can be drawn from both federal and state run exchanges.

The Justice Department quickly announced it will ask for further review by all judges who sit on the D.C. Circuit. Regardless of the outcome, the matter is widely expected to reach the Supreme Court when its next term begins in October. In the interim, the Obama Administration will continue implementing the ACA and providing subsidies to individuals purchasing health insurance from any ACA exchange.

Telemedicine Legislation to Be Introduced in the House

On July 21, Reps. Mike Thompson (D-CA) and Glenn Thompson (R-PA) announced that they are set to introduce legislation that seeks to expand Medicare coverage for telemedicine service beyond what CMS proposed on July 3 in the Physician Fee Schedule. The proposal outlines a "phased-in" expansion of telemedicine coverage over four years.  Reimbursement would be expanded to include remote patient management services for chronic conditions such as heart disease and diabetes. Communications consisting of only telephone audio conversations or emails between providers and patients would not be covered.

Earlier this month, CMS proposed to expand telemedicine coverage by including annual wellness visits and psychotherapy as covered services under Medicare. The final Physician Fee Schedule rule is expected to be published sometime in November.

HRSA Clarifies 340B Orphan Drug Policy

On July 21, HHS and the Health Resources and Services Administration ("HRSA") published an interpretive rule enabling hospitals subject to the orphan drug exclusion to purchase orphan drugs through the 340B program. This action comes in the wake of a federal court opinion that vacated HHS's adoption of a regulation to implement the orphan drug exclusion policy, but it did not invalidate HRSA's interpretation of the statute.  The newly released interpretive rule reiterates HRSA's stance on the orphan drug exclusion, which applies to critical access hospitals, sole community providers, rural referral centers and freestanding cancer hospitals.

The interpretive rule says that because Congress wanted 340B-eligible entities to participate and benefit from the drug discount program, it's important that HHS ensure there is enough value in the program for them to participate. The rule is effective as of July 21, 2014 and does not include a notice and comment period.

Bills Introduced This Week

Rep. Tulsi Gabbard (D-HI) introduced H.R. 5131, a bill that would direct the Department of Veterans Affairs ("VA") to reimburse non-VA medical providers who provide care to eligible veterans. The legislation does not require veterans to get pre-approval from the VA before seeking outside care, which many believe is an obstacle in the comprehensive VA reform bill that is currently being negotiated by Congress.

Sen. Tammy Baldwin (D-WI) introduced legislation to increase the number of graduate medical education residency positions at VA medical facilities.

Next Week in Congress

The House and Senate return on Monday, July 28 for their final week of legislative business before the August district work period begins. The House will vote on whether to approve Speaker John Boehner's lawsuit over the Obama Administration's decision to delay the ACA's employer mandate.

To date, the House has passed seven of the twelve appropriations bills it is required to pass each year, while the Senate has passed none. Since there is little expectation the two chambers will complete passage of these bills on time, the House will continue work on a short-term spending bill to keep the government operating beyond October 1.