This Week: Bipartisanship breaks out in the Senate and House as they look at health reform solutions; FDA User Fee legislation on the way to the President; more HHS nominees move out of committee and toward full Senate; CSR payments still in jeopardy; HHS finalizes payment rules.

1. Congress

House

Bipartisan Health Reform Plan Emerges in the House

On July 31 the House Problem Solvers Caucus, a group comprising an even number of Democrats and Republicans, released a plan to fix the ACA. The plan would fully fund cost-sharing reductions (CSRs) and create a fund that states could use to support their individual insurance markets to drive down premiums. The proposal also eliminates the medical device tax and curtails the employer mandate.

To view the proposal, click here.

Senate

Right to Try Legislation Passes Senate

On Aug. 3 the Senate approved by unanimous consent a bill that would allow seriously ill patients in all 50 states to request access to experimental medicines without FDA approval.

Sen. Ron Johnson's (R-WI) Trickett Wendler, Frank Mongiello, Jordan McLinn and Matthew Bellina Right to Try Act of 2017 (S. 204) would authorize the use of unapproved medicines by patients diagnosed with a life-threatening illness as long as the drugs in question have already been tested in the first phase of human clinical trials and are continuing on in further FDA-overseen research. Patients must have exhausted other treatment options and be unable to participate in ongoing clinical trials. The passage of the legislation came after Senator Johnson threatened to hold up the reauthorization of the FDA user fee legislation if he did not get a vote on the bill. A compromise reached by Senate leadership and the HELP Committee leadership permitted Johnson to allow the FDA user fee legislation to move forward and his revised right-to-try legislation to be voted on in the Senate. The compromise includes changes to satisfy the FDA and public health officials’ concerns. For example, the legislation now requires FDA to receive reports of safety events that occur in right-to-try situations. It also forbids patients from being charged more than the cost of production for the medicines.

Similar right-to-try laws have passed in 37 states. Reps. Andy Biggs (R-PA) and Brian Fitzpatrick (R-AZ) have a similar bill pending in the House.

To view S. 204, click here.

To view H.R. 878, click here.

HELP Committee Moves Forward Five HHS Nominees

On Aug. 3 the Senate voted on nominees approved on Aug. 2 by the Senate’s Health, Education, Labor and Pensions (HELP) Committee, which finished the nominee process for the assistant secretaries of Health and Human Services (HHS). The five nominations were:

  • Lance Allen Robertson, Assistant Secretary for Aging
  • Brett Giroir, Assistant Secretary for Health
  • Robert Kadlec, Assistant Secretary for Preparedness and Response
  • Elinore F. McCance-Katz, Assistant Secretary for Mental Health and Substance Use (a position created by the 21st Century Cures Act)
  • Jerome Adams, Surgeon General of the Public Health Service

To view the press release and read more on the nominees, click here.

Health, Education, Labor and Pensions Committee to Look for Short-Term Solutions to Stabilize Market

On Aug. 1, Chairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA) of the Senate’s HELP committee announced there will be a series of hearings in September to help stabilize the individual markets of the Affordable Care Act. The hearings are likely to be held in September. The chairman also stated that he may push for a bill that would guarantee cost-sharing reduction payments for the following year to ensure markets are stabilized.

To view the press release, click here.

FDA User Fee Bill Passes Senate

On Aug. 3, the Senate voted for a five-year reauthorization of FDA user fee programs that fund drug and medical device reviews. The bill passed 94-1. Senator Bernie Sanders (D-VT) was the only senator to vote against the legislation.

The FDA Reauthorization Act of 2017 now heads to the President having already passed the House. The administration put out a mixed statement on the bill in July following House passage. The White House was critical of the bill’s not containing a Trump administration proposal to require drug and device companies to pay the full cost of their FDA reviews. However, it didn’t threaten a veto. The administration acknowledged the importance of the law, pledged to work with lawmakers and supported the timely reauthorization of the user fee programs. The new five-year agreement runs from fiscal 2018 to 2022 and enables FDA’s prescription drug program to collect nearly $880 million in user fees from the industry next year. In addition, FDA would take in $494 million in generic drug fees, $183 million in medical device fees and $45 million in biosimilar fees. The user fee programs account for about half of FDA’s yearly budget. The current program expires on Sept. 30.

The legislation also addresses FDA’s digital health work and expanded use of electronic health records for oversight of drugs and devices.

To view the legislation, click here.

2. Administration

CSR Payments in Jeopardy

The President threatened to cut off key payments known as cost-sharing reduction payments (CSRs) following the failed Senate vote concerning repeal of the ACA.

However, a federal appellate court ruling on Aug. 1 could complicate Trump’s efforts to unilaterally cut off the payments. The court ruled that more than a dozen Democratic state attorneys general could intervene in a lawsuit brought by House Republicans contesting the legality of the subsidies. In essence, states can still continue to fight for the payments in court, even if the Trump administration refuses to defend them.

Members of the National Governors Association health care committee, meanwhile, urged the administration to commit to paying the subsidies through 2018. “The uncertainty surrounding CSR payments is resulting in significantly higher premiums for consumers in many parts of the country and insurers exiting the marketplace altogether,” wrote Republican Gov. Charlie Baker of Massachusetts and Democratic Gov. Terry McAuliffe of Virginia. The NGA previously called on Congress to fund the subsidies and stabilize markets.

In addition, Sen. Lamar Alexander, Chairman of the Health, Education, Labor and Pensions Committee (HELP), urged Trump to pay the subsidies through September so Congress has time to craft a bipartisan stabilization plan that would include one year of funding for the payments.

CMS Finalizes 2018 Payment and Policy Updates for Medicare Hospital Admissions

On Aug. 2 CMS issued a rule updating the 2018 Medicare payment and policies when patients are discharged from the hospital: the FY 2018 Medicare Inpatient Prospective Payment System and Long-Term Care Hospital Prospective Payment System final rule. The rule states that hospitals will see an increase in Medicare spending on inpatient hospital payments of $2.4 billion based on payment rate increases and other policies. However, overall payments to long-term care hospitals will decrease by $110 million due to changes included in the final rule. CMS is also providing further clarification about discounts given to uninsured patients.

CMS also issued a notice on updating 2018 Medicare payment policies and rates for inpatient psychiatric facilities and predicts that Medicare payments to those facilities will increase by $45 million in FY 2018.

To view a fact sheet on the fiscal year 2018 Medicare Inpatient Prospective Payment System and Long-Term Care Hospital Prospective Payment System final rule, click here.

To view a fact sheet on the fiscal year 2018 Medicare Inpatient Psychiatric Prospective Payment System notice with comment period, click here.

CMS Announces Part D Prescription Drug Average Basic Premiums for 2018

On Aug. 2 CMS announced the average basic premium for Medicare Part D plan will drop to about $33.50/month in 2018. In 2017 the actual average premium was $34.70, marking a decrease of $1.20. The drop in the premium price is announced despite spending for the Part D program increasing faster than other parts of Medicare. The Medicare enrollment period begins on Oct. 15, 2017, and closes on Dec. 7, 2017. Premiums and costs for Medicare health and drug plans for 2018 are expected to be released in September.

To view the data analysis, click here.

FDA and Duke to Explore “Real-World Evidence”

In September the Duke-Margolis Center for Health Policy and the FDA will hold a meeting in order to discuss ideas on opportunities and challenges for applying real-world evidence to support approval of a new indication and satisfy post-approval study requirements. FDA is required to consult with stakeholders to create the structure for using the real-world experience (RWE) as required by the 21st Century Cures Act. The group in September is expected to discuss challenges related to collection, methods for development and pilot demonstrations.

This area has been highly criticized as HHS human research projects state the FDA’s guidance is too vague to be useful.

To view the draft guidance, click here.

The workshop website can be accessed by clicking here.

Commission on Opioid Addiction Sends Interim Report

On July 31, the Commission on Combating Drug Addiction and the Opioid Crisis released an interim report calling the epidemic a national emergency and increased federal funding to address the crisis, including for substance abuse treatment, expanding access to medication-assisted treatment and helping states enhance their prescription monitoring programs.

President Trump established the commission, which is housed within the Office of National Drug Control Policy, by executive order on March 29.

The commission also recommended mandatory education for doctors and new government partnerships with the pharmaceutical industry to develop non-opioid pain relievers in addition to new medication-assisted treatment options. The commission’s report proposes waiving a long-standing prohibition on using Medicaid funds to pay for residential substance abuse treatment. That could cost the federal government between $40 billion and $60 billion over a decade, according to previous estimates from the Congressional Budget Office. Since the 1960s, the federal government has barred certain health care facilities with more than 16 beds—classified as Institutions for Mental Disease—from receiving federal matching funds to treat Medicaid patients.

The ban was originally intended to force states to pay for the long-term institutionalization of psychiatric patients and limit Medicaid spending.

The report also recommends expanding access to medication-assisted treatment, such as buprenorphine and methadone, for Medicaid and Medicare beneficiaries, as well as for people who are incarcerated. The report also calls for increased training for doctors to combat “inappropriate overprescribing.”

The final report is due in October.

The interim report can be found, here.

CMS Updates Medicare Payment Rates for SNFs and Inpatient Rehab

The 2018 Skilled Nursing Facility (SNF) Prospective Payment System Final Rule increases Medicare payment rates by 1 percent for FY 2018 and revises the SNF market basket index through updating the base year data from FY 2010 to 2014. The rule also finalizes updates to the SNF Quality Reporting Program and policies for the SNF Value-Based Purchasing Program from FY 2019.

The rule revises and rebases the SNF market basket index by updating the base year data from FY 2010 to 2014 and by adding a new cost category for Installation, Maintenance and Repair Services. The rule also finalizes updates to the SNF Quality Reporting Program, including replacing the pressure ulcer measure with an updated version, adopting new functional status measures and publicly displaying new measures. In addition, it finalizes policies for the SNF Value-Based Purchasing Program for FY 2019, the first year this program will impact Medicare payments and the requirements regarding the composition of professionals for the survey team.

The 2018 Inpatient Rehabilitation Facility (IRF) Prospective Payment System Final Rule updates payment rates for FY 2018 to reflect a 1 percent increase factor in accordance with 411(b) of the Medicare Access and CHIP Reauthorization Act of 2015. An additional 0.1 percent decrease to aggregate payments due to updating the outlier threshold results in an overall update for FY 2018 of 0.9 percent (or $75 million) relative to payments in FY 2017. CMS also finalized the removal of the 25 percent payment penalty.

To view a fact sheet on the FY 2018 Skilled Nursing Facility Prospective Payment System final rule, click here.

To view a fact sheet on the FY 2018 Inpatient Rehabilitation Facility Prospective Payment System Final Rule (CMS-1671-F), click here.

CMS Finalizes Updates to the Wage Index and Payment Rates for the Medicare Hospice Benefit

Hospices will generally see a 1 percent ($180 million aggregate) increase in their payments for FY 2018. The hospice payment system includes a statutory aggregate cap. The aggregate cap limits the overall payments made to a hospice annually. As mandated by the Improving Medicare Post-Acute Care Transformation Act of 2014 (Pub. L. 113-185) (IMPACT Act), the cap amount for accounting years that end after Sept. 30, 2016, and before Oct. 1, 2025, must be updated by the hospice payment update percentage, rather than the Consumer Price Index (CPI). Therefore, the cap amount for FY 2018 will be $28,689.04 (2017 cap amount of $28,404.99 increased by 1 percent).

Hospice Quality Reporting Program

The rule finalizes eight measures from CAHPS Hospice Survey data already submitted by hospices and also finalizes the extension or exception for quality reporting purposes from 30 calendar days to 90 calendar days after the date that an extraordinary circumstance occurred. Additionally, this rule outlines policies and procedures associated with the public reporting of the quality measures used in the hospice program.

For FY 2019 payment determination and subsequent years, CMS finalized that it will extend the period of time a hospice may have to submit a request for an extension or exception for quality reporting purposes from 30 calendar days to 90 calendar days after the date that an extraordinary circumstance occurred. This change will align the HQRP with the other post-acute care quality reporting programs, as well as the Hospital Inpatient Quality Reporting Program, and will give additional time for providers to focus on operations related to patient care should a situation arise, such as an unforeseen environmental emergency.

CMS will begin public reporting Hospice Quality Reporting Program (HQRP) data via a Hospice Compare Site in August 2017 to help customers make informed choices. In this final rule, CMS has also finalized policies and procedures associated with the public reporting of the quality measures used in the Hospice Program, including release of the aggregate quality data file and the Provider Preview Reports.

CMS discussed enhancing the current Hospice Item Set data collection instrument to be more in line with other post-acute care settings. CMS received public feedback on considering this revised data collection instrument, HEART, which would be a patient assessment tool, rather than the current chart abstraction tool.

To view the finalized updates, click here.

3. Regulations Open for Comment

CMS Issues Proposed Revision Requirements for Long-Term Care Facilities’ Arbitration Agreements

On June 5, CMS issued proposed revisions to arbitration agreement requirements for long-term care facilities. The proposed revisions would help strengthen transparency in the arbitration process, reduce unnecessary provider burden and support residents’ rights to make informed decisions about important aspects of their health care.

The Reform of Requirements for Long-Term Care Facilities Final Rule, published on Oct. 4, 2016, listed the requirements facilities need to follow if they choose to ask residents to sign agreements for binding arbitration. The final rule also prohibited predispute agreements for binding arbitration. The American Health Care Association and a group of nursing homes sued for preliminary and permanent injunction to stop CMS from enforcing that requirement. The court granted a preliminary injunction on Nov. 7, 2016. After that decision, CMS reviewed and reconsidered the arbitration requirements in the 2016 Final Rule.

The proposed rule focuses on the transparency surrounding the arbitration process and includes the following proposals:

  • The prohibition on predispute binding arbitration agreements is removed.
  • All agreements for binding arbitration must be in plain language.
  • If signing the agreement for binding arbitration is a condition of admission into the facility, the language of the agreement must be in plain writing and in the admissions contract.
  • The agreement must be explained to the resident and his or her representative in a form and manner they understand, including that it must be in a language they understand.
  • The resident must acknowledge that he or she understands the agreement.
  • The agreement must not contain any language that prohibits or discourages the resident or anyone else from communicating with federal, state or local officials, including federal and state surveyors, other federal or state health department employees, or representatives of the State Long-Term Care Ombudsman.
  • If a facility resolves a dispute with a resident through arbitration, it must retain a copy of the signed agreement for binding arbitration and the arbitrator’s final decision so it can be inspected by CMS or its designee.
  • The facility must post a notice regarding its use of binding arbitration in an area that is visible to both residents and visitors.

This proposed rule is scheduled to be published in the Federal Register on June 8, 2017, and comments are due by Aug. 7, 2017. For more information, click here.

CMS Proposes MACRA Rule

On June 19, CMS issued a proposed rule that would make changes in the second year of the Quality Payment Program as required by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).

The 1,058-page rule continues the “pick-your-pace” option in year two of the program, letting doctors report a limited amount of quality data to be exempted from Medicare’s penalties.

CMS creates a “virtual group” reporting option, allowing doctors to pool the information on how they care for patients and be subjected to Medicare’s quality payment scheme.

CMS is also increasing the minimum number of patients doctors can treat before being subject to the program’s Merit-based Incentive Payment System. It establishes more flexibility for doctors who see limited numbers of patients face to face or in a hospital. For 2017, roughly 800,000 clinicians were exempt from the MIPS program.

CMS will not require doctors to use 2015 certified EHRs next year, as it had ordered during the Obama administration. However, clinicians are offered bonuses for using new versions of the software. Medicare also will delay for another year judging doctors for how much they spend for treating patients.

Comments on the rule are due no later than 5 p.m. on Aug. 21, 2017. For a fact sheet on the proposed rule, click here.

CMS Proposes 2018 Policy and Payment Rate Changes for End-Stage Renal Disease Facilities

On June 29, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would update payment policies for the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS). The rule covers payment rates for renal dialysis services, including updates to acute kidney injury (AKI), furnished to beneficiaries on or after Jan. 1, 2018.

The ESRD Quality Incentive Program (QIP) proposed changes are for payment years 2019, 2020 and 2021, and a number of key dialysis data methodologies and quality measures. The proposed rule also requests comment on how to include individuals with acute kidney injury in the ESRD Quality Improvement Program.

In addition to the proposed rule, CMS is releasing a request for information to welcome continued feedback on the Medicare program. CMS is committed to maintaining flexibility and efficiency throughout Medicare. Through transparency, flexibility, program simplification and innovation, CMS aims to transform the Medicare program and promote the availability of high-value and efficiently provided care for its beneficiaries.

Comments are due no later than 5 p.m. on Aug. 28, 2017.

For a fact sheet on the proposed rule, please click here.

For the ESRD proposed rule (CMS 1674-P), please click here.

CMS Proposes 2018 Policy and Rate Changes for Hospital Outpatient, Ambulatory Surgical Center Payment Systems

The Centers for Medicare & Medicaid Services (CMS) on July 13, issued a proposed rule that updates payment rates and policy changes in the Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System.

Among the provisions in this rule, CMS is proposing to change the payment rate for certain Medicare Part B drugs purchased by hospitals through the 340B program. The proposed rule also requests comment on how CMS can best implement the proposal to pass savings on to beneficiaries and providers, and to allow seniors to save money on their drug costs. The 340B Drug Pricing Program allows certain hospitals and other health care providers to purchase drugs and biologicals (other than vaccines) that are administered in a hospital outpatient department from drug manufacturers at discounted prices.

The proposed rule also includes a provision to address rural hospitals recruiting physicians by placing a two-year moratorium on the direct supervision requirement currently in place at rural hospitals and critical access hospitals.

In addition, CMS is releasing within the proposed rule a request for information to welcome continued feedback on flexibilities and efficiencies in the Medicare program.

Comments are due 5 p.m. Sept. 11, 2017.

To view a fact sheet on the proposed rule, click here.

To view the proposed rule, click here.

CMS Proposes 2018 Payment and Policy Updates for the Physician Fee Schedule

The Centers for Medicare & Medicaid Services (CMS) on July 13 issued a proposed rule that would update Medicare payment and policies for doctors and other clinicians who treat Medicare patients in calendar year (CY) 2018. This proposed rule seeks public comment on reducing administrative burdens for providing patient care, including visits, care management and telehealth services. The rule takes steps to better align incentives and provide clinicians with a smoother transition to the new Merit-based Incentive Payment System under the Quality Payment Program (QPP). The rule also attempts to encourage fairer competition between hospitals and physician practices by promoting greater payment alignment, and it would improve the payment for office-based behavioral health services that are often the therapy and counseling services used to treat opioid addiction and other substance use disorders. In addition, the proposed rule makes additional proposals to implement the Center for Medicare & Medicaid Innovation’s Medicare Diabetes Prevention Program expanded model starting in 2018.

In addition to the proposed rule, CMS is releasing a request for information to welcome continued feedback on the Medicare program. CMS is committed to maintaining flexibility and efficiency throughout Medicare. Through transparency, flexibility, program simplification and innovation, CMS aims to transform the Medicare program and promote the availability of high-value and efficiently provided care for its beneficiaries. This will inform the discussion on future regulatory action related to the Physician Fee Schedule. Comments are due by 5 p.m. on Sept. 11, 2017.

For a fact sheet on the proposed rule, click here.

To view the proposed rule, click here.

CMS Proposes 2018 and 2019 Payment Changes for Medicare Home Health Agencies

The Centers for Medicare & Medicaid Services (CMS) on July 25 issued a proposed rule that would update payment rates and the wage index for home health agencies (HHAs) serving Medicare beneficiaries in 2018; it also proposes a redesign of the payment system in 2019. Comments are due Sept. 25, 2017.

CMS is planning a slight pay cut for home health agencies in 2018, by reducing Medicare payments to the agencies by 0.4 percent next year, saving the federal government an estimated $80 million. That change is driven in part by CMS’s planned phase out of a provision boosting pay rates for certain home health services delivered to rural patients. The agency is also floating a series of changes to the payment methodology beginning in 2019, which could result in a pay cut of up to 4.3 percent. That would translate to as much as $950 million in reduced Medicare payments to home health agencies.

Under the proposed rule, the home health payment update percentage for HHAs that submit the required quality data for the Home Health Quality Reporting Program would be 1 percent in 2018. The proposed rule also includes proposals to refine the HH PPS case-mix adjustment methodology, including a change in the unit of payment from 60-day episodes of care to 30-day periods of care, to be implemented for periods of care beginning on or after Jan. 1, 2019. Additionally, the proposed rule includes proposals for the Home Health Value-Based Purchasing Model and the Home Health Quality Reporting Program.

To view the proposed rule, click here.

For more information on the Home Health Prospective Payment System, click here.

4. Reports

CBO Releases Score on S. 870, Creating High-Quality Results and Outcomes Necessary to Improve Chronic Care Act of 2017 (CHRONIC)

The Congressional Budget Office released a score for S. 870 stating that it would reduce spending for the Medicare and Medicaid programs by $217 million between the years 2018-2022 but have no major effect on total direct spending over 2018-2027. S. 870 would not affect direct spending, so pay-as-you-go procedures would not apply and enacting the bill would not affect revenues.

To view the score, click here.

If you have any questions, contact the following individuals at McGuireWoods Consulting:

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