This Week: Drug pricing remains a focus as CMS rolls out a demonstration project for Part B drugs... The Senate passes The Comprehensive Addiction and Recovery Act (CARA) and Senate Cures legislation moves forward... Senate looks at co-ops... House was in recess.

1. Congress

House of Representatives

NIH Refuses House Democrats’ Request to Issue Guidance on March-In Rights

The National Institutes of Health (NIH) refused a request from over 50 House Democrats that the agency put the drug industry on notice that it is prepared to use its “march-in rights” to stop pharmaceutical price gouging, arguing that the issue is better suited for lawmakers to address. March-in rights give NIH the authority to require patent holders of federally funded intellectual property to license their patents to third parties to ensure the products are available to the public.

Rep. Lloyd Doggett (D-TX) led the lawmakers’ letter to NIH and the Department of Health and Human Services (HHS) that said some experts estimate about one-fourth of priority reviewed drugs could be impacted by NIH’s fully exercising its march-in rights. The letter added that even an announcement of reasonable guidelines in response to price gouging could positively influence pricing across the industry.

HHS responded that NIH considered using its march-in rights to address drug pricing concerns for Norvir and Xalatan in 2004, and also again in 2013, related to Norvir again. Each time, NIH determined that the drug did not meet the statutory requirements to justify use of the authority.

In its 2013 review of Norvir, NIH found, “As stated in previous march-in considerations, the general issue of drug pricing is appropriately addressed through legislative and other remedies, not through the use of the NIH’s march-in authorities. The exercise of the Government’s use license to the Subject Patents is not appropriate in this case.”

The lawmakers said, “The failure to act in the past has undoubtedly sent an unfortunate signal that prices for federally-funded inventions can be set as high as a sick or dying consumer will pay.”

HHS said that NIH considers application of the march-in statute on a case-by-case basis and is prepared to use its authority when the statutory criteria are met. Neither HHS nor NIH think additional guidance is needed.

HHS has taken other actions however. The agency sent a notice to all 50 state Medicaid directors and letters to the CEOs of many drug manufacturers about providing access to drugs for Hepatitis C patients; it held a forum with stakeholders to speak about opportunities to improve patient access to affordable prescription drugs; it is incorporating value-based and outcomes-based models into purchasing programs in the public and private sectors and is publishing the Medicare Drug Spending Dashboard to provide information on the highest-priced drugs in Medicare Parts B and D.

House Energy and Commerce Committee’s Subcommittee on Health to Review MACRA

The House Energy and Commerce Committee’s Subcommittee on Health scheduled a March 17 hearing to review the payment reforms in the Medicare Access and CHIP Reauthorization Act (MACRA), which passed in April 2015. For more information or to watch the hearing, click here.

Senate

GOP Split Widens on the Budget

The divide between House and Senate Republicans on how to handle the budget is widening. On March 7, Senate Budget Committee Chairman Mike Enzi said lawmakers will delay consideration of a fiscal blueprint until at least April. The announcement comes as the House Budget Committee is preparing to vote on a budget resolution this week. Also, the Senate GOP is preparing to move appropriations bills that stand by last year’s bipartisan deal, whereas Republicans in the House are still resistant.

Senate Majority Leader Mitch McConnell said the Senate will stick to the bipartisan spending deal that set discretionary spending at $1.07 trillion for fiscal year 2017. He said that specific allocations will come later and ensured the spending bills will get a lot of time on the floor in the coming months. McConnell did not commit this time to moving a budget through the Senate and said Sen. Mike Enzi and the Budget Committee are figuring out how to deal with that. He also ignored a question about what would happen in the case that the House adopted a budget with lower spending.

Senate HELP Committee to Mark Up Mental Health and Opioid Abuse Bills

On March 7, the Senate Committee on Health, Education, Labor and Pensions (HELP) released a draft of its bipartisan mental health bill. The bill requires SAMHSA to hire a chief medical officer and report to Congress every two years on its activities and HHS to establish a committee to work on serious mental illnesses. The draft also includes measures to address the provider workforce shortage and care access issues. According to a committee press release, the Mental Health Reform Act of 2016 will: 1) ensure that mental health programs are effectively serving those with mental illness; 2) help states meet the needs of those suffering from mental illness; 3) promote the use of evidence-based approaches, promising best practices in mental health care; and 4) increase access to mental health care.

The HELP committee will also consider legislation to help tackle the opioid epidemic by addressing treatment, prevention and other efforts to combat opioid addiction and abuse. That bill will be marked up alongside the mental health bill on March 16 — both measures are expected to be packaged with mental health reform bills, which await markups in the Senate Judiciary and Finance committees.

Senate HELP Committee Approves Seven Cures Bills

On March 9, the Senate HELP Committee approved seven biomedical innovation bills as part of an innovation companion to the House-passed 21st Century Cures Act (H.R. 6). The approved bills are as follows:

• The Advancing Hope Act of 2015 (S. 1878) : a bill to permanently reauthorize the Food and Drug Administration’s (FDA) rare pediatric disease priority review voucher program. Sens. Warren and Sanders voted against the bill.
• The Advancing Breakthrough Medical Devices for Patients Act of 2015 (S. 1077) : a bill to establish a breakthrough pathway for medical devices so they will move more efficiently through the FDA review process.
• The Medical Electronic Data Technology Enhancement for Consumer’s Health (MEDTECH) Act (S. 1101) : a bill exempting some medical software from FDA oversight.
• The Medical Countermeasures Innovation Act of 2015 (S. 2055) : a bill to address medical countermeasures. This would increase the likelihood that there will be a drug to help save someone’s life if they are a victim in a bioterror attack.
• The Combination Products Innovation Act of 2015 (S. 1767) : a bill that will help prevent combination products from being caught in regulatory red tape between various departments at FDA.
• Patient Focused Impact Assessment Act of 2015 (S. 1597) : a bill that requires FDA to document patient engagement in a drug’s development.
• Adding Zika to the Priority Review Voucher Program Act (S. 2512) : legislation adding Zika to the FDA rare disease priority review voucher program, which aims at a faster treatment, cure or vaccine for the virus.

Democrats proposed and withdrew two amendments: 1) one from Sen. Elizabeth Warren providing $5 billion in new mandatory funding to the National Institutes of Health (NIH) and FDA every year for 10 years and 2) a second from ranking member Patty Murray establishing a new FDA safety program for medical devices. These issues must be addressed before legislation goes to the Senate floor, according to Democrats. The committee earlier approved seven biomedical reform bills in February and will hold its third and final markup on April 6.

Sen. Carper Writes to HHS Regarding Nursing Home Violations

Sen. Tom Carper (D-DE) asked the Health and Human Services (HHS) Office for Civil Rights what efforts it is making to address possible violations of the Health Insurance Portability and Accountability Act in nursing homes related to the use of social media. In his letter, Carper points to the investigation by ProPublica that revealed nursing home staff posting inappropriate photos and videos of residents — some of whom were not fully clothed or had dementia. The posts have appeared on networks like Snapchat and Facebook. Under the federal patient privacy law, the Office for Civil Rights is responsible for investigating complaints such as these and taking corrective action when violations occur. However, according to ProPublica’s investigation, the office had not taken any such action as of December 2015.

Sens. Capito and Stabenow Ask CMS to Implement Alzheimer’s Caregiver Support Program

Sens. Shelley Moore Capito (R-WV) and Debbie Stabenow (D-MI) asked the Centers for Medicare and Medicaid Services (CMS) to implement a program that aims to support over 15 million Americans who are caring for a family member living with Alzheimer’s. These Americans provide roughly 18 billion hours of unpaid care annually. “Mounting evidence suggests that targeted support services directed to these informal family caregivers may help the caregiver prevent or mitigate these challenges and help keep an Alzheimer’s patient in the home setting for longer periods of time,” the senators wrote. Last year, Capito and Stabenow introduced the “HOPE Act” to provide Alzheimer’s patients and their families with necessary information about the disease and possible treatment options.

To read a press release and the letter, click here.

Senate Approves Opioids Bill

On March 10, the Senate easily approved a bill to address the opioid epidemic after Democrats gave up their effort to put funding in the legislation. Democrats had threatened to block the bill last month if Republicans didn’t add $600 million to fund its programs. They gave in after realizing there was no GOP support for the funds and advocacy groups backed the bill regardless.

The Comprehensive Addiction and Recovery Act (CARA) (S. 524) was approved 91-1, with Sen. Ben Sasse (R-NE) voting against the legislation. The bill redirects funding to drug abuse treatment and prevention programs. Democrats had put up a procedural vote on the funding amendment — sponsored by Sen. Jeanne Shaheen (D-NH) — and it fell 48-47 along party lines. Democrats believed this helped show that Republicans will not actually put money behind their legislation.

Republican lawmakers, however, point to $400 million in appropriations for opioid programs in the year-end budget deal and said any more funding should be considered through the appropriations process.

The House has not scheduled a hearing on companion legislation.

Senate Homeland Security and Governmental Affairs Permanent Subcommittee on Investigations Holds Hearing on ACA’s Co-ops Failure

CMS Acting Administrator Andy Slavitt and Marketplace CEO Kevin Counihan testified March 10 before the Senate Homeland Security and Governmental Affairs Committee Investigations Subcommittee at a hearing on the ACA’s troubled co-op program. Twenty-three co-ops were launched in 2013 with funding from the Affordable Care Act (ACA). Twelve have closed and eight are on enhanced oversight.

The subcommittee released a report at the hearing that said HHS ignored evidence that many of the nonprofit co-ops lacked sound business plans, had been oversubscribed and were underpriced. Chairman Rob Portman (R-OH) and Sen. Ben Sasse (R-NE) did most of the questioning. Portman focused on what information was available to CMS and what tools they were using. Sasse focused on the failure of CoOportunity Health, which was operating in Iowa and Nebraska. Acting Administrator Slavitt said that he did not think the Nebraska co-op should have been allowed to move forward for open enrollment in 2015 based on 2014 information.

Slavitt and Counihan both stressed the high-risk nature of starting up co-ops and that the co-ops did not have information to base price on experience until 2015.

Members of the subcommittee raised concerns about the amount of unpaid medical claims and the impact the co-ops’ underpricing of premiums might have had on the overall market.

For Slavitt and Counihan’s testimony or to view the hearing, click here.

For the subcommittee report, click here.

2. Administration

CMS Releases 2016 Value Modifier Results and Upward Payment Adjustment Factor

The Centers for Medicare and Medicaid Services (CMS) made results available from the implementation of the 2016 Value Modifier and the adjustment factor that will be applied to physician groups that are subject to upward payment adjustments under the Value Modifier in 2016. The upward payment adjustment factor in 2016 is +15.92 percent. The Value Modifier adjustment factor is determined after the close of the performance period and is based on the estimated aggregate amount of downward payment adjustments.

There are 13,813 physician group practices with 10 or more eligible professionals that are subject to the 2016 Value Modifier based on performance in 2014. Physicians in 128 groups exceeded the program’s benchmarks in quality and cost efficiency and will receive an increase in their payments under the Medicare Physician Fee Schedule. In contrast, physicians in 59 groups will see a decrease in their Medicare payments in 2016 based on their performance. Also, physicians in 5,418 groups that failed to meet minimum reporting requirements will see a decrease in their Medicare payments in 2016. Medicare payments for most physician groups nationwide (8,208 groups) that met the minimum reporting requirements will remain unchanged in 2016 because of their performance on quality and cost-efficiency measures or because there was insufficient data to calculate the groups’ Value Modifier.

CMS Announces Second Round of Applications for Next Generation ACO Model

On March 8, the Centers for Medicare and Medicaid Services’ (CMS) Innovation Center announced the second and final round of applications for the Next Generation Accountable Care Organization (ACO) Model. The model will start its second performance year on Jan. 1, 2017. Details on model parameters are included in the Request for Applications, which is available on the Next Generation ACO Model web page.

The Next Generation ACO Model is a health care delivery and payment model created by the CMS Innovation Center. Building upon experience from the Pioneer ACO Model and the Medicare Shared Savings Program, this model sets predictable financial targets, enables providers and beneficiaries greater opportunities to coordinate care, and aims to attain the highest-quality standards of care.

The ACOs in the Next Generation ACO Model take on greater performance risk than ACOs in current models, while also potentially sharing in a greater portion of savings. To support increased risk, ACOs have a stable, predictable benchmark and flexible payment options that support ACO investments in care improvement infrastructure that provides high-quality care to patients. Currently there are a total of 21 Next Generation ACOs all over the nation — including ones in Los Angeles, California, Boston and Massachusetts.

Organizations interested in applying to the model must submit a Letter of Intent (LOI) before completing an application. The LOI is available on the Next Generation web page. The Innovation Center will also hold open door forums (ODFs) to help applicants in the process and give more information on the model. The first ODF was on March 8 and the second will be on March 22. CMS has posted dial-in information for the ODFs on the Next Generation ACO model web page.

CMS Releases Skilled Nursing Facility Utilization and Payment Data

On March 9, the Centers for Medicare and Medicaid Services (CMS) released a public data set that provides information on services provided to Medicare beneficiaries by skilled nursing facilities (SNFs). The Skilled Nursing Facility Utilization and Payment Public Use File (SNF PUF) contains information on utilization, payments and submitted charges organized by provider, state and resource utilization group (RUG). The data includes information on 15,055 skilled nursing facilities, over 2.5 million stays and almost $27 billion in Medicare payments for 2013. The data set does not contain any individually identifiable information about Medicare beneficiaries.

In addition to information on payments and charges, the SNF PUF contains information on two categories of RUGs for patients who receive a significant amount of therapy: Ultra-High (RU) and Very High (RV) Rehabilitation RUGs. Consistent with prior CMS findings, the SNF PUF shows that for these two RUGs, the amount of therapy provided is often very close to the minimum amount of minutes needed to qualify a patient for these categories. Medicare SNF per diem payment amounts for rehabilitation RUGs are primarily based on therapy minutes, and payment amounts for these two RUGs can exceed payments for comparable RUGs with fewer therapy minutes by more than 25 percent.

The SNF PUF was created from CMS administrative claims data for Medicare beneficiaries enrolled in the fee-for-service program available from the CMS Chronic Condition Data Warehouse ( www.ccwdata.org ). The data covers calendar year 2013 and is based on SNF Part A institutional claims.

To view a fact sheet on the Skilled Nursing Facility data set, click here.

FDA, Amarin Settlement Allows Continued Promotion of Off-Label Drug Uses

Amarin, a biopharmaceutical company, will be able to promote its prescription fish oil pill for off-label uses under the terms of a settlement agreement reached with the Food and Drug Administration (FDA) on March 8. The agreement could have big consequences for the future of drug marketing. Amarin is now allowed to market Vascepa for off-label uses not approved by the FDA without fear of prosecution as long as its claims are truthful and nonmisleading.

Amarin had sued the FDA in federal court New York after failing to get expanded FDA approval for the drug. It claimed government prosecution for misbranding violated its free speech rights. The preliminary court ruling cited a 2012 case — U.S. v. Caronia — in which the 2nd Circuit Court of Appeals ruled that under the First Amendment the government could not prohibit and criminalize truthful off-label promotion. The settlement now binds Amarin and FDA to the ruling. Also, Amarin can submit to FDA up to two proposed communications per year and was offered a process for arbitration on any concerns FDA has.

FDA’s agreement to accept Amarin’s position in this case could mean that drugmakers will have more promotional freedom in the future.

3. State Activities

Alaska: Judge Dismisses State Legislature’s Lawsuit over Medicaid Expansion

On March 1, a Superior Court judge dismissed the Alaska Legislature’s lawsuit to stop Gov. Bill Walker’s Medicaid expansion plan. The legislature contended the Walker administration overstepped its bounds by expanding Medicaid unilaterally. The court concluded that the state’s expansion was within the bounds of the law. “Because the Social Security Act requires expansion, state law makes the expansion group eligible for Medicaid services. Because existing law required the Governor to provide Medicaid to the expansion group, the Governor did not violate the Alaska Constitution by doing so,” Judge Frank Pfiffner wrote in his decision.

California: Gov. Brown Signs Bill Taxing Health Plans

California Gov. Jerry Brown signed into law a tax on health plans to replace the state’s old Medicaid managed care organization tax. Federal officials said the latter tax was no longer permissible because it targeted only Medicaid plans. Without the new tax on managed care plans, there would have been a 41 billion hole in the state budget. The tax was part of a bigger package of bills that includes a $300 million increase in state funding for people with developmental disabilities and $400 million in debt relief by prefunding retiree health benefits and repaying transportation loans. The Centers for Medicare and Medicaid Services (CMS) still has the final word on the tax and whether California’s new structure makes it eligible for federal matching funds.

Michigan: SCOTUS Asks for Review of Case Against Gov. Snyder

The U.S. Supreme Court (SCOTUS) has asked a federal appeals court to reconsider a case against Michigan Gov. Rick Snyder in light of its recent decision in Gobeille v. Liberty Mutual Insurance Co. That decision limited states’ abilities to interfere with self-funded insurance plans that are governed by the Employee Retirement Income Security Act (ERISA). A group representing self-funded insurance plans in Michigan sued Snyder over the 2011 Michigan law imposing a 1 percent tax on paid health care claims for self-insured and other employers, and required plans — including self-insured plans — to file certain records with the state. Both the district and appeals courts rejected the case, and SCOTUS is asking them to revisit it. SCOTUS highlighted that its Gobeille decision will have impact beyond the claims databases at the center of that case. Read the request here.

Missouri: House Lawmakers Approve Prescription Drug Monitoring Program

House members approved legislation to create a prescription drug monitoring program in response to the opioid epidemic across the country, which would make Michigan the final state to adopt such a program. The bill — HB 1892 — would require pharmacies to report to the state health department details about medications dispensed to people. The bill will now go to the Senate, where similar proposals have stalled in the past. Sen. Robert Schaaf has been the main opponent to creating such a database, citing patient privacy concerns.

New Hampshire: State House Continues Medicaid Expansion Through 2018

On March 9, the New Hampshire House voted to continue Medicaid expansion through 2018, signaling a key victory for Democratic Gov. Maggie Hassan. Hassan — who is in a Senate race with incumbent Republican Sen. Kelly Ayotte — made reauthorization a top priority and contends the programs must continue to help New Hampshire combat its opioid abuse epidemic. Republican legislators added multiple conservation elements to expansion as a condition of a two-year extension. The state would also need to get another waiver approved by the Obama administration.

The model would create a work requirement — one that CMS has not agreed to — as well as copays for enrollees who visit the emergency room for nonemergency reasons. The legislation was amended on March 9 to make sure that the entire program would not fail if CMS does not approve the work requirement. Roughly 46,000 people have gained coverage in New Hampshire due to expansion. The bill will now go to the state Senate, where passage is expected.

North Carolina: North Carolina’s Pending 1115 Waiver

North Carolina’s draft 1115 waiver for Medicaid reform intends to establish new prepaid health plans for enrollment, build on the state’s current patient-centered medical home model and require providers to connect to the state health information exchange. It would also give hospitals supplemental funding through multiple mechanisms — like an uncompensated care pool and delivery system reform incentive payments. The waiver excludes the medically frail, people with emergency-only coverage and enrollees of the PACE program, among others. Gov. Pat McCrory said implementation could take 36 months, with half of that time devoted to garnering approval from the Centers for Medicare and Medicaid Services (CMS).

Oklahoma: Oklahoma House Bill Would Cut People From Medicaid

The Oklahoma House passed legislation that would cut 111,000 people out of the state’s Medicaid program. House Bill 2665, by Rep. Doug Cox, instructs the Oklahoma Health Care Authority to request a federal waiver that allows it to eliminate benefits for all able-bodied adults under 65 years old — this seems to primarily impact low-income parents. In Oklahoma, parents whose income is up to 42 percent of the federal poverty level qualify for Medicaid. Those parents are a mandatory coverage group under Medicaid, meaning the state would have to ask the federal government for permission to end their eligibility — a very unlikely occurrence. A move would save the state $130 million in state funding but cost $203 million in federal matching funds. The bill passed 65-34.

4. Regulations Open for Comment

Food and Drug Administration (FDA) Issues Final Rule to Phase Out Trans Fats

FDA issued a final rule June 16 that gives the food manufacturers three years to phase out partially hydrogenated oils (PHOs), which are still used in a wide variety of food products from microwave popcorn to cake frosting. The decision finalizes an agency determination that PHOs, the primary dietary source of artificial trans fat in processed foods, are not “generally recognized as safe” or GRAS for use in human food. Since 2006, manufacturers have been required to include trans fat content information on the Nutrition Facts label of foods. Between 2003 and 2012, the FDA estimates that consumer trans fat consumption decreased about 78 percent and that the labeling rule and industry reformulation of foods were key factors in informing healthier consumer choices and reducing trans fat in foods. Comments on the final rule are due by June 18, 2018.

More information on FDA’s decision can be found in the agency’s press release.

HHS Posts Guidance for State Innovation Waivers

On Dec. 11, the Department of Health and Human Services (HHS) posted guidance for states interested in seeking a State Innovation Waiver under Section 1332 of the Affordable Care Act (ACA). State Innovation Waivers allow states to receive federal funding to implement alternative models of health care coverage that provide affordable coverage to their residents. The notice clarifies that the minimum length of public notice and comment periods for waiver applications is 30 days.

To see the guidance, click here.

CMS Issues Proposed Rule Expanding Access to Medicare Claims Data

The Centers for Medicare and Medicaid Services (CMS) issued a proposed rule entitled “Medicare Program: Expanding Uses of Medicare Data by Qualified Entities.” The rule would expand access to Medicare information by permitting certain organizations to buy and share claims data. Created under Obamacare, Medicare’s qualified entity program allows providers, employers and others access to Medicare data to analyze the performance of providers and suppliers. The rule aims to help qualified entities make business decisions that reduce costs and improve quality of care. These changes were mandated in the Medicare Access and CHIP Reauthorization Act and CMS thinks the expansion of data sharing will stir more interest in the program. If the proposal is finalized, CMS estimates the number of qualified entities will go from 13 to 20. Comments will be accepted on the proposed rule until 5 p.m. on March 29, 2016.

CMS Releases Proposed Updates to Medicare Advantage and Part D Programs

On Feb. 19, the Centers for Medicare and Medicaid Services (CMS) released proposed updates to the Medicare Advantage (MA) and Part D programs for next year. The updates target high drug costs and the opioid abuse epidemic. CMS’s call letter encourages plans to notify patients about drugs that are added to formularies in the middle of the year, such as generics or other newly approved drugs, which could provide better value than existing options. It also aims to add a link from the Medicare Plan Finder website to the Medicare Drug Spending Dashboard by 2017. CMS is proposing for Part D plans to implement edits to prevent opioid overutilization at the point of sale, and says it will not approve benefit designs that hinder access to medication-assisted treatment through overly restrictive utilization management strategies or high cost-sharing. About one-third of enrollees are in Part D plans with quality rankings of at least four stars, compared to 27 percent in 2009. Comments must be submitted by March 4 and the proposal will be finalized April 4.

CMS Releases Proposed Rule for Provider Enrollment Process

On Feb. 25, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule to implement additional provider enrollment provisions of the Affordable Care Act (ACA) to help make sure that entities and individuals who pose risks to the Medicare program are kept out of it or removed for extended periods. This rule is part of CMS’s effort to prevent questionable providers and suppliers from entering the Medicare program.

If finalized, the regulations would allow CMS to remove or prevent enrollment of those who try to circumvent enrollment requirements through name and identity changes or through inter-provider relationships. It will also address vulnerabilities such as when providers and suppliers avoid paying their Medicare debts by reenrolling as a different entity.

Major provisions of the proposed rule include:

• Disclosure of Affiliations: Would require health care providers and suppliers to report affiliations with entities and individuals that: (1) currently have uncollected debt to Medicare, Medicaid or CHIP; (2) have been or are subject to a payment suspension under a federal health care program or subject to an Office of Inspector General (OIG) exclusion; or (3) have had their Medicare, Medicaid or CHIP enrollment denied or revoked. CMS could deny or revoke the provider’s or supplier’s Medicare, Medicaid or CHIP enrollment if CMS determines that the affiliation poses an undue risk of fraud, waste or abuse.
• Different Name, Numerical Identifier or Business Identity: CMS could deny or revoke a provider’s or supplier’s Medicare enrollment if CMS determines that the provider or supplier is currently revoked under a different name, numerical identifier or business identity.
• Abusive Ordering/Certifying: Would allow CMS to revoke a physician’s or eligible professional’s Medicare enrollment if he or she has a pattern or practice of ordering, certifying, referring or prescribing Medicare Part A or B services, items or drugs that is abusive, represents a threat to the health and safety of Medicare beneficiaries or otherwise fails to meet Medicare requirements.
• Increasing Medicare Program Re-enrollment Bars: Would improve protection of the Medicare Trust Funds and program beneficiaries by: 1) raising the existing maximum re-enrollment bar from three years to 10 years; 2) allowing CMS to add three more years to the provider’s or supplier’s re-enrollment bar if the provider attempts to re-enroll in Medicare under a different name, numerical identifier or business identity; and 3) imposing a maximum 20-year re-enrollment bar if the provider or supplier is being revoked from Medicare for the second time.
• Other Public Program Termination: Would permit CMS to deny or revoke a provider’s or supplier’s Medicare enrollment if: (1) the provider or supplier is currently terminated from participation in a particular Medicaid program or any other federal health care program under any of its current or former names, numerical identifiers or business identities; or (2) the provider’s or supplier’s license is revoked in a state other than that in which the provider or supplier is enrolled or enrolling.
• Expansion of Ordering/Certifying Requirements: Would permit CMS to require that physicians and eligible professionals who order, certify, refer or prescribe any Part A or B service, item or drug must be enrolled in or validly opted out of Medicare.

For more information, click here.

ONC Releases Proposed Rule Expanding Role in Health IT Certification Program

The Office of the National Coordinator for Health Information Technology (ONC) released a proposed rule that would enable the agency to conduct direct reviews of certified health IT products. Such direct review would also include how certified health IT interacts with other systems. The rule increases ONC’s oversight of health IT testing bodies to improve alignment and more successfully deal with issues, and seeks to increase transparency associated with the surveillance — it plans to make results of surveillance of electronic health records (EHRs) publicly available. The reviews would focus on situations posing health or safety risks. Depending on the findings, the office says it may require corrective action or suspend or terminate certification for an EHR or health IT module.

ONC hopes this move will enhance public confidence in health IT testing and certification. The U.S. Department of Health and Human Services (HHS) said the rule will empower consumers by improving availability of certification information. ONC is proposing a “strict process” for health IT recertification or replacement versions, and a program ban for those that don’t fix problems pointed out by ONC. Comments on the rule will be accepted through May 2.

To see the proposed rule, click here.

CMS Proposes to Test New Medicare Part B Prescription Drug Models

On March 8, the Centers for Medicare and Medicaid Services (CMS) announced a proposed rule to test new models to improve how Medicare Part B pays for prescription drugs and supports physicians and other clinicians in delivering higher-quality care. Medicare Part B covers prescription drugs that are administered in a physician’s office or hospital outpatient department, such as cancer medications, injectables like antibiotics, or eye care treatments. The proposed Medicare Part B Model would test new ways to support physicians and other clinicians as they choose the drug that is right for their patients. The proposed rule is designed to test different physician and patient incentives to do two things: drive the prescribing of the most effective drugs and test new payment approaches to reward positive patient outcomes. Among the approaches to be tested are the elimination of certain incentives that work against the selection of high-performing drugs, as well as the creation of positive incentives for the selection of high-performing drugs, including reducing or eliminating patient cost sharing to improve patients’ access and appropriate use of effective drugs.

Prescription drug spending in the U.S. was around $457 billion in 2015, or 16.7 percent of overall health spending. In 2015, Medicare Part B spent $20 billion on outpatient drugs administered by physicians and hospital outpatient departments. The proposed rule seeks comments on testing six different alternative approaches for Part B drugs to improve outcomes and align incentives to improve quality of care and spend dollars wisely:

1. Improving incentives for best clinical care
2. Discounting or eliminating patient cost sharing
3. Feedback on prescribing patterns and online decision support tools
4. Indications-based pricing
5. Reference pricing
6. Risk-sharing agreements based on outcomes

CMS is accepting comment on the proposed rule through May 9, 2016.

To see the press release, click here.

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

AHRQ Releases Draft Technology Assessment for Public Comment

The Agency for Healthcare Research and Quality’s (AHRQ) Technology Assessment Program posted a draft technical brief for review on March 11. The draft is entitled “Renal Denervation in the Medicare Population.” The document will be available for review from 9 a.m. on March 11 to 5 p.m. on April 1.

To review the document, click here.

5. Reports

GAO Report Suggests CMS Update Policies on Medicaid Supplemental Payments

According to a new report from the Government Accountability Office (GAO), the Centers for Medicare and Medicaid Services (CMS) should clarify its policies on Medicaid supplemental payments to hospitals. The report examines how hospitals in four states spent their supplemental funding. GAO made two recommendations: that CMS issue guidance clarifying its policies that 1) supplemental payments should be linked to the provision of Medicaid services and 2) payments should not be contingent on the availability of local financing. To read the report, click here.

MedPAC Analysis Shows Drugmakers Lowered Part B Drug Prices

According to an analysis prepared for MedPAC, drugmakers may have lowered Part B drug prices following the budget sequester in order to mitigate the financial hit to physicians. The analysis was based on 34 drugs that accounted for about two-thirds of Part B drug spending in 2014. Oncologists tried to get the Centers for Medicare and Medicaid Services (CMS) to exempt Part B drugs from sequestration cuts or to limit the cut to the service portion of reimbursement — CMS turned down the request. Oncologists have complained that the 2 percent cut to Medicare provider reimbursement would put cancer clinics in a grim situation.

MedPAC staff analysis suggests that some drugmakers responded to the sequester by lowering prices for physicians who were paying the high end of the price range to mitigate the effect of the sequester. Community Oncology Alliance Executive Director Ted Okon argued the commission’s analysis is misdirected.

Health Affairs Report Reveals Physicians Spending Over $15.4 Billion on Quality Reporting

According to a new study in Health Affairs, U.S. physician practices spend more than $15.4 billion annually to report quality measures to private insurers. This figure reaffirms a common complaint among doctors about the burdens of reporting multitudes of quality measures that usually overlap or conflict.

The authors of the study calculated the spending figure from an MGMA survey in which physician practices from common specialties said they spent an average 785 hours per physician per year on reporting and entering data. Four-fifths of the physicians surveyed said their reporting requirements are worse now than three years ago. And only 27 percent said they believed the current measures were moderately or very representative of the quality of care.

The requirements were highest for primary care practices — they spent $50,468 per year on quality measures, compared to $34,924 for cardiology practices and $31,471 for orthopedic practices. CMS is looking to reduce providers’ reporting burdens and to streamline requirements through the implementation of the new physician payment system under MACRA.

McKinsey Report Analyzed Every Hospital Network Across the U.S.

A new report from McKinsey analyzed every hospital network across the U.S. and found the following:

• Around 48 percent of networks in 2016 are tiered, narrow or ultra-narrow — this keeps with historic trends
• The total number of networks decreased over 10 percent from 2015 to 2016, primarily driven by carrier exits
• Provider-led plans are trying for more volume by decreasing prices — McKinsey found they were the lowest-price option for 31 percent of consumers in their markets (up from 23 percent in 2015)

To see the report, click here.

The company added that households that decided against obtaining insurance are paying more than twice the penalty this year, up from $172 to $383. The penalty this year is the larger of 2 percent of a household’s modified adjusted income or $325 per adult, up from 1 percent of adjusted income and $95 per adult in 2015.

The company’s figures are for returns filed through March 5.

H&R Report Finds Taxpayers Are Not Better at Estimating Yearly Income

On March 8, H&R Block released a report finding taxpayers who got health insurance through the Affordable Care Act (ACA) have not gotten better at estimating their yearly income to avoid repaying the Internal Revenue Service (IRS). The companies said about three in five customers are having to pay back a portion of the Advanced Premium Tax Credit they received to offset the costs of purchasing health coverage. This is up from 52 percent in 2015 tax season, the first for which taxpayers had to reconcile the amount of credit they got with their yearly income. Taxpayers who received too much of a credit are paying back more this year — $579, compared to $530 in 2015. Households that decided against getting insurance are paying over twice the penalty this year — up from $172 to $383. The penalty for this year is the larger of 2 percent of a household’s modified adjusted income, or $325 per adult. This is up from 1 percent of adjusted income and $95 per adult in 2015.

Avalere Health Finds Majority of Drugs Now Subject to Coinsurance in Part D Plans

Avalere Health released an analysis showing that the percentage of drugs in Part D plans that require coinsurance increased significantly since 2014, and Medicare Advantage plans require coinsurance much less often than Part D plans. Beneficiaries with coinsurance pay for a percentage of the drug cost, instead of a fixed amount, which is the case with copayments. Avalere estimates 58 percent of covered drugs were subject to coinsurance in 2016, up from 35 percent in 2014.

To see the analysis, click here.

CAP Analysis Argues Against Speeding Up Drug Approval Process

In an analysis published March 9, the Center for American Progress argues that federal regulators should not try to speed up the approval of new prescription drugs in an effort to undermine the authority of the U.S. Food and Drug Administration (FDA). Speeding up the process by allowing FDA to find a drug safe and effective on the basis of less scientific evidence will harm patients and have no effect on drug prices, the CAP analysis argues.

To read the full analysis of the drug approval process, click here.