Weekly Washington Healthcare Update

October 8, 2012

Pardon Our Dust

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This Week:

1. Congress

House of Representatives


2. Administration

Health and Human Services (HHS)

Centers for Medicare and Medicaid Services (CMS)

Department of Justice (DOJ)

3. State Activities

4. Regulations Open for Comment

5. Reports

Health Affairs

Urban Institute

Avalere Health

1. Congress

House of Representatives

Key Committee Chairmen Weigh in on Electronic Health Records

Arguing that the bar for “meaningful use” of electronic health records (EHRs) is too low under regulations promulgated by HHS, Ways and Means Committee Chairman Dave Camp (R-MI), Energy and Commerce Committee Chairman Fred Upton (R-MI), Ways and Means Health Subcommittee Chairman Wally Herger (R-CA) and Energy and Commerce Health Subcommittee Chairman Joe Pitts (R-PA) this weeksent a letter to Secretary Sebelius asking that she “immediately suspend” electronic health record incentive payments to providers and delay penalties for not participating in the meaningful use program. The letter went on to request that expectations for recipients of federal funds should be increased, and that overall the EHR incentive program should focus on making health care delivery more efficient and affordable, instead of focusing on participation rates.

However, the interoperability concerns expressed by the lawmakers were somewhat muted by a study from the Bipartisan Policy Center (BPC), and Doctors Helping Doctors Transform Health Care recently noted that the interoperability standards for Stage 2 meaningful use are being implemented on a “very aggressive schedule,” which may address the most important types of data sharing identified by physicians.

House Wants Health Information Technology Working Group

A group of House Republicans sent a letter last Friday asking HHS Secretary Sebelius to convene a working group of patients, industry groups and other stakeholders in updating its current regulatory framework surrounding health information technology (HIT), pursuant to Section 618 of the recently enacted Food and Drug Administration Safety and Innovations Act. The letter stresses the importance of balancing the need for patient safety with the need for innovation in the sector.


Sen. Grassley Questions 340B Integrity

Last week, Sen. Grassley (R-IA) sent letters to three North Carolina hospitals seeking information regarding utilization of the 340B Drug Discount Program, which aims to help covered providers and qualified patients obtain certain pharmaceutical drugs at discounted prices. Specifically, Grassley asked for revenue data related to the 340B program, and how the hospitals have used the program to benefit patients. The letters follow on a letter sent by Sen. Grassley, Sen. Hatch (R-UT) and Rep. Upton (R-MI) last year to the Health Resources and Services Administration (HRSA), which oversees the 340B program, regarding federal oversight of the program. For more information see “Grassley Seeks Answers from N.C. Hospitals on Discount Drug Program.”

2. Administration


Office of Inspector General to Examine Exchange Grants, CO-OPs

The HHS Office of Inspector General (OIG) recently listed health insurance exchanges and the consumer owned and operated plan (CO-OP) program among new programs established by the ACA scheduled forreview by the internal integrity body. Specifically, OIG will be looking at exchange grants and state readiness with regard to the exchange program, and at the selection process for recipients of federal funds to establish CO-OPs.

Docs in Congress Object to HHS Patient Self-Reporting Proposal

Several Republican Members of Congress who are also physicians sent a letter to Dr. Carolyn Clancy, Director of the Agency for Health Research and Quality (AHRQ), to express their opposition to a new HHS proposal that would allow people to self-report medical errors. “While it is important to understand the subjective patient experience of care, it would be inaccurate to use this information as an objective standard of care,” the lawmakers wrote. “Many patients do not have the medical knowledge to accurately determine when an adverse medical event occurred … [and] there is a likelihood that the patient could mischaracterize it.” Questions posed to the director centered on the government’s intended handling and application of the data it would acquire, particularly with regard to patient privacy and medical malpractice.

Upton, Grassley Question Exchange Grant Program Integrity

Last week, Sen. Grassley (R-IA) and House Energy and Commerce Committee Chairman Upton (R-MI) sent a letter to HHS Secretary Sebelius claiming “inadequate or non-existent” oversight of more than $1 billion that has been distributed to establish American Health Benefit Exchanges. Citing reports of questionable use of funds by states, the lawmakers asked the Secretary to report on the effectiveness of efforts the Department may be taking to monitor uses of funds, as well as measures it’s taking to combat possible fraud and abuse.


CMS Taps Firm for Federal Exchange Outreach

According to PRWeek, the Centers for Medicare and Medicaid Services (CMS) has signed a $3.1 million contract with PR firm Weber Shandwick to develop an outreach and communications plan in states with federally run health insurance exchanges. The contract is slated to end on April 15, 2013, though the option of an additional 12-month extension exists. Many states have expressed concerns about a lack of information regarding the establishment of exchanges. 


Alleged $430 Million Fraud Ring Uncovered

Last week, the Department of Justice announced the arrest of more than 90 suspects in a reported $430 million Medicare fraud ring uncovered by the Medicare Fraud Strike Force. In a press conference with HHS Secretary Kathleen Sebelius, HHS Inspector General Daniel R. Levinson and others, Attorney General Eric Holder said charges against defendants in Miami, Los Angeles, Dallas, Houston, New York City, Chicago and Baton Rouge, La., were filed for schemes including home health care, mental health care and ambulance fraud. Some offenders could face up to 50 years in prison.

3. State Activities

North Dakota Opts for Exchange

Recently, North Dakota Insurance Commissioner Adam Hamm submitted the state’s Sanford Health Plan to HHS as its benchmark plan recommendation for an essential health benefits (EHB) package. The recommendation comes after the state’s request for additional time to allow its legislature to make a final recommendation was denied this summer, and without a final rule from HHS to guide state decisions. In a letter to stakeholders, Commissioner Hamm explained, “The interim Legislative Health Care Reform Review Committee discussed the EHB choice several times, also taking public comment and ultimately indicating their preference for a Sanford Health Plan recommendation.”

Alabama Pushes For Information, Flexibility on Essential Health Benefits

Alabama Gov. Robert Bentley reported to HHS Secretary Sebelius this week that because of a lack of clarity and flexibility, his state will not select an EHB benchmark. In the letter, Bentley, also a physician, cited the absence of additional guidance promised by the Administration, coupled with the extensive impact his decision would have on the state, as rationale for his determination.

West Virginia, Wisconsin Would Also Like More Information on Exchanges

In a recent letter to HHS Secretary Sebelius, Wisconsin Insurance Commissioner Ted Nickel requested that states be allowed 60 days after HHS issues final rules regarding EHBs to select a benchmark plan for their respective states. The objection to making a decision on EHB in the absence of clear guidance is not new, but Commission Nickel’s letter goes on to request that HHS refrain from interpreting the lack of a decision on state benchmark as an admission that the state would prefer a federally imposed benchmark. “With no EHB regulations issued to date, two days before states are to identify their EHB Benchmark plans, we respectfully request that HHS not make this important decision on behalf of Wisconsin,” the letter states.

In addition, West Virginia Governor Earl Ray Tomblin, a Democrat up for reelection, took an approach more common among Republican governors in stating concerns over the lack of guidance from HHS with regard to EHBs as justification for what will at least be a delay in his selection of a benchmark benefit plan. “It is critical to our analysis of essential health benefits that we measure the impact of this federal requirement on our citizens in as accurate a manner as possible, which can only happen through the clarity of final federal rules,” Tomblin wrote.

4. Regulations Open for Comment

HHS Releases Electronic Funds Transfer (EFT) Rule

HHS released an interim final rule with comment period offering guidance on the operation of electronic health care transactions under HIPAA. The rule implements portions of Sec. 1104 of the Affordable Care Act (ACA), and it is expected to save $9 billion over the next 10 years “by reducing inefficient manual administrative processes for physician practices, hospitals, and health plans,” HHS said. Comments on the rule, which is scheduled to be published in the Aug. 10 Federal Register, are due Oct. 9.

FDA Proposes Unique Device Identifier (UDI) Rule

The FDA will accept comments on theproposed rule to implement a Unique Device Identifier system for medical devices distributed in the United States. Comments on the proposed rule will be accepted either electronically or written until Nov. 7, 2012.

5. Reports

Health Affairs

Will Accountable Care Organizations Actually Save Money?

The Medicare Shared Savings Program, created under the Affordable Care Act, aims to reward participating ACOs that succeed in lowering health care costs while improving performance. Depending on how the organizations perform on several quality measures, they will “share savings” in Medicare Part A and B payments. However, a new study in Health Affairs analyzing the effects of the program quality measures and performance targets on Medicare costs reports that a simulated population of patients ages 65-75 with type 2 diabetes produced a 10-percentage-point improvement in performance on diabetes quality measures, which would reduce Medicare costs by up to only about 1 percent. To view the study, please visit theHealth Affairs website (subscription required):

Urban Institute

ACA Making Progress in Health Care Cost Containment

A recent report by the Urban Institute highlighted the ACA’s payment reductions to providers, and demonstration projects that test bundled payments and market competition in the state health insurance exchanges, as well as a variety of other provisions in the law, are already reducing projections of future health expenditures. It also says that more steps should be taken to control costs, including medical malpractice reform.

Avalere Health

Essential Health Benefit Benchmarks Offer Adequate Rx Coverage

While some have expressed concerns that the EHB benchmark plans required of states in establishing insurance exchanges will not provide adequate prescription drug coverage, arecent study of eight state benchmark plans by Avalere found that all plans analyzed covered a significant number of drugs in each class required by HHS, which is well beyond the proposed one drug per class minimum. While the study noted that there is wide variation among states, on average, the selected benchmark plans covered approximately 62 percent of the drugs available in the chosen classes. Avalere has also produced amap of overall state progress with regard to EHB benchmark submissions.

If you have any questions, please contact Stephanie Kennan, Senior Vice President, or Brian Looser, Assistant Vice President, at McGuireWoods Consulting.

Founded in 1998, McGuireWoods Consulting LLC (MWC) is a full-service public affairs firm offering state and federal government relations, national/multistate strategies, infrastructure and economic development, strategic communications and grassroots issue management services. McGuireWoods Consulting is a subsidiary of the McGuireWoods LLP law firm and in 2010 was ranked in the Top 20 of The National Law Journal‘s “The Influence 50,” an annual report of the top public affairs firms in Washington, D.C.

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