Washington Healthcare Update

May 12, 2014

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1. Congress

House of Representatives


2. Administration

3. State Activities

4. Regulations Open for Comment

5. Reports

1. Congress


Energy and Commerce Hosts 21st Century Cures Roundtable

On May 6, 2014, the Energy and Commerce Committee hosted a roundtable discussion in which thought leaders in the field of biomedical innovation in the United States informed the subcommittee on the current state of activities being conducted to accelerate the process of bringing new treatments and cures to patients. The discussion served as the first roundtable of the Energy and Commerce Committee’s 21st Century Cures initiative — a collaborative effort that aims to accelerate the pace of cures and medical breakthroughs in the United States. The initiative also will try to identify the countries from which the United States can learn and the actions lawmakers can take to advance this research, such as providing NIH with more tools and modernizing FDA’s drug approval process. During this first discussion, participants specifically noted the importance of harnessing data to lessen delays on the regulatory approval process, the role of federal funding for research and the threat posed by drug shortages.


Dr. Francis Collins
Director of the National Institutes of Health

Dr. Janet Woodcock
Director of FDA’s Center for Drug Evaluation and Research

Dr. Jeff Shuren
Director of FDA’s Center for Devices and Radiological Health

Margaret Anderson
Executive Director of FasterCures

Dr. James Woolliscroft
Dean of the University of Michigan Medical School

Dr. Joe Gray
Associate Director for Translational Research, Knight Cancer Institute, Oregon Health and Science University

Dr. Andrew von Eschenbach
President of Samaritan Health Initiatives Inc.
Chairman of Project FDA at the Manhattan Institute

Dr. Peter Huber
Senior Fellow at the Manhattan Institute

Dr. Ellen Sigal
Chairperson and Founder of Friends of Cancer Research

Sarah Despres
Pew Charitable Trusts

Jonathan Leff
Partner at Deerfield Management
Chairman of the Deerfield Institute

For more information, or to view the roundtable, please visitenergycommerce.house.gov.

Energy and Commerce Subcommittee Hearing on ACA Enrollment

On May 7, 2014, the House Energy and Commerce Subcommittee on Oversight and Investigations held a hearing entitled “PPACA Enrollment and the Insurance Industry.” Witnesses representing insurers including Aetna and Cigna, as well as representatives from America’s Health Insurance Plans and the Blue Cross Blue Shield Association, informed the subcommittee regarding various aspects of ACA enrollment, including how many enrollees had paid their premiums.


Frank Coyne
Vice President of Operations
Chief Transformation Officer
Blue Cross and Blue Shield Association

Mark Pratt
Senior Vice President of State Affairs
America’s Health Insurance Plans

Paul Wingle
Executive Director of Individual Business and Public Exchange Operations and Strategy

Brian Evanko
President, Individual Segment

J. Darren Rodgers
Senior Vice President and Chief Marketing Officer
Health Care Service Corporation

Dennis Matheis
President of Central Region and Exchange Strategy
Wellpoint, Inc.

For more information or to view the hearing, please visitenergycommerce.house.gov.


HELP Committee Hearing on Burwell HHS Secretary Nomination

On May 8, 2014, the Senate Health, Education, Labor and Pensions (HELP) Committee held a hearing on the nomination of Sylvia Mathews Burwell to be Secretary of Health and Human Services. Burwell currently serves as Director of the Office of Management and Budget, a position to which she was confirmed by a vote of 96-0 in April 2013. In her testimony, Burwell said that should she be confirmed as the next Secretary of HHS, she will approach her work at the Department with three guiding tenets — driving solutions for important issues,; building teams with the talent and focus to implement objectives, and strengthening relationships to make progress on the wide variety of issues at HHS. The Senate Finance Committee will hold a confirmation hearing on May 14.


Sylvia M. Burwell
U.S. Office of Management and Budget
Nominee for Secretary
United States Department of Health & Human Services

For more information, or to view the hearing, please visitwww.help.senate.gov.

Labor/HHS Appropriations Subcommittee Hearing on FY 2015 HHS Budget

On May 7, 2014, the Senate Appropriations Subcommittee on Labor, Health, and Human Services held a hearing on this FY 2015 HHS budget. In her opening statement, Chairwoman Mikulski (D-MD) noted that this hearing is part of the Senate Appropriation Committee’s mission to hold more than 60 hearings in a span of six weeks and to complete all of the appropriations work by October 1. The committee will begin the process of marking up appropriations bills on May 22, and hopes to consider this subcommittee’s bill in June.


The Honorable Thomas R. Frieden, MD, MPH
Centers for Disease Control and Prevention

The Honorable Mary K. Wakefield, PhD, RN
Health Resources and Services Administration

Mark H. Greenberg, Esq.
Acting Assistant Secretary
Administration for Children and Families

Tim Love
Chief Operating Officer
Centers for Medicare and Medicaid Services

For more information, or to view the hearing, please visitwww.appropriations.senate.gov.

2. Administration

HHS: Hospital-acquired Conditions Decrease, Reduced Readmission Rates Due to ACA

The Department of Health and Human Services’ (HHS) Centers for Medicare & Medicaid Innovation (CMMI)released data on May 7 that found that hospital-acquired conditions (HACs) such as falls, infections and adverse drug events decreased 9 percent from 2010 to 2012; this decrease is estimated to have prevented almost 15,000 deaths in that same period. The reductions in adverse drug events, falls, infections and other HACs saved the government almost $4 billion in just those two years. Other data cited in the report showed that readmissions from January 2012 to December 2013 fell by 8 percent, representing an estimated 150,000 fewer readmissions. “These historic improvements are a result of strong, diverse public-private partnerships, active engagement by patients and families, and a wide range of aligned federal programs and initiatives — including new tools provided by the Affordable Care Act (ACA) — working in concert towards shared aims,” the report said. The ACA tools cited by HHS to increase hospital quality improvement include in particular the federal Partnership for Patients. The program, led by CMS and launched in 2011, aims to improve patient care while simultaneously reducing costs. The primary goal of the partnership is to decrease preventable HACs by 40 percent and 30-day readmissions by 20 percent between 2010 and 2014.

CMS: Intensive Cardiac Rehabilitation Benefits Expanded to Include New Wellness Program

In a May 6decision memorandum from the Centers for Medicare & Medicaid Services, the agency said it would expand Medicare coverage benefits for intensive cardiac rehabilitation wellness programs. The proposed coverage expansion was released in February 2014, but the expansion was finalized after CMS said it found evidence in recent peer-reviewed medical research that supported a lower mortality rate of participants in the Benson-Henry Institute Cardiac Wellness Program. As it stands, the current concept of cardiac rehabilitation includes specific exercise prescription, health education and personal counseling, and behavioral and lifestyle risk factor reduction. Alternatively, the Cardiac Wellness Program is a “multicomponent intervention program that includes supervised exercise, behavioral interventions, and counseling and is designed to reduce cardiovascular risk and improve health outcomes,” the CMS said in a memo. These interventions target cardiac risk factors and lead to a reduction in the progression of coronary heart disease to cardiovascular endpoints and will likely lead to a reduction in overall mortality of Medicare beneficiaries. The CMS coverage expansion would allow providers to bill Medicare as an intensive cardiac rehabilitation (ICR) program instead of as a traditional cardiac rehabilitation service.

Data Show Information Exchange Among Acute-Care Hospitals Growing

According todata released May 5 by the Office of the National Coordinator (ONC) for Health Information Technology, the number of acute-care hospitals that electronically shared health information with a provider outside their information network reached a new high in 2013. Specifically, the data show that more than 60 percent of nonfederal acute-care hospitals electronically exchanged some kind of patient health information with a health care provider outside their network in 2013, a 4 percent increase compared with exchange rates in 2012. However, the interoperability of hospital health IT systems varied across the country. For example, all acute-care hospitals in Delaware and Rhode Island exchanged data with an outside provider in 2013, but in Oklahoma just 38 percent of acute-care hospitals exchanged data with an outside provider in 2013 and just 25 percent exchanged clinical care summaries.

3. State Activities

Massachusetts Grapples with Health Exchange Troubles

The board of the Massachusetts health insurance exchangevoted on Thursday to purchase software aimed to help individuals access health insurance through the state’s troubled exchange, while also preparing to join the federal marketplace if the system is not ready by fall. However, insurers in the state have expressed concerns about the estimated $121 million cost of the plan. In addition, insurers contend the new approach would require insurance companies to have contingency plans in place for two systems, one state run and one federal. “We cannot overstate the complexity and technical issues that come with having to develop two separate systems,” Eric Linzer, a senior vice president at the association, wrote in a letter delivered to board members before the vote.

Colorado to Allow Non-ACA Compliant Plans Through 2015

The Colorado Division of Insuranceannounced it will allow insurance carriers to continue through 2015 health plans for individuals and small groups that don’t comply with the ACA’s requirements for minimum coverage. According to state officials, the decision to allow insurers to offer noncompliant plans was based on the White House’s similar announcement in March, allowing such plans to be offered on federally facilitated exchanges. Critics of the ACA have noted that the law’s requirements for qualifying health benefits (QHBs) threaten to eliminate plans that many individuals believe are adequate.

4. Regulations Open for Comment

CMS Proposed Rule FY 2015 Hospice Payment Rate Update

On May 2, 2014, CMS issued a proposed rule [CMS-1609-P] that would update fiscal year (FY) 2015 Medicare payment rates and the wage index for hospices serving Medicare beneficiaries. As proposed, hospices would see an estimated 1.3 percent ($230 million) increase in their payments for FY 2015. The hospice payment increase would be the net result of a proposed hospice payment update to the hospice per diem rates of 2 percent (a “hospital market basket” increase of 2.7 percent minus 0.7 percent for reductions mandated by law), and a 0.7 percent decrease in payments to hospices due to updated wage data and the sixth year of CMS’ seven-year phase-out of its wage index budget neutrality adjustment factor (BNAF). This rule also provides an update on hospice payment reform analyses and solicits comments on “terminal illness” and “related conditions” definitions, and on a process and appeals for Part D payment for drugs, while beneficiaries are under a hospice election. In addition, the rule proposes timeframes for filing the notice of election and the notice of termination/revocation; adding the attending physician to the hospice election form; a requirement that hospices complete their hospice inpatient and aggregate cap determinations within five months after the cap year ends, and remit any overpayments; and updates for the hospice quality reporting program.

Public comments on the proposal will be accepted until July 1, 2014.

CMS Final Rule — Federally Qualified Health Center Prospective Payment System

On May 2, 2014,CMS issued a final rule with comment period to implement methodology and payment rates for a prospective payment system (PPS) for federally qualified health center (FQHC) services under Medicare Part B beginning on Oct. 1, 2014, in compliance with the statutory requirement of the Affordable Care Act. In addition, it establishes a policy that allows rural health clinics (RHCs) to contract with nonphysician practitioners when statutory requirements for employment of nurse practitioners and physician assistants are met, and makes other technical and conforming changes to the RHC and FQHC regulations. Finally, this final rule with comment period implements changes to the Clinical Laboratory Improvement Amendments (CLIA) regulations regarding enforcement actions for proficiency testing (PT) referrals. Comments will be accepted through July 1, 2014.

CMS Issues Proposed Hospital Inpatient Payment Regulation

CMS issued aproposed rule that would update fiscal year (FY) 2015 Medicare payment policies and rates for inpatient stays at general acute care and long-term care hospitals (LTCHs). This rule builds on the Obama administration’s efforts through the Affordable Care Act to promote improvements in hospital care that will lead to better patient outcomes while slowing the long-term health care cost growth. CMS projects that the payment rate update to general acute care hospitals will be 1.3 percent in FY 2015. The rate update for long-term care hospitals will be 0.8 percent. The difference in the update is accounted for by different statutory and regulatory provisions that apply to each system.

The rule’s most significant changes are payment provisions intended to improve the quality of hospital care, which reduce payment for readmissions and hospital acquired conditions (HACs). The rule also includes proposed changes to the Hospital Inpatient Quality Reporting (IQR) Program. The rule also describes how hospitals can comply with the Affordable Care Act’s requirements to disclose charges for their services online or in response to a request, supporting price transparency for patients and the public.

CMS will accept comments on the proposed rule until June 30, 2014, and will respond to comments in a final rule to be issued by Aug. 1, 2014.

Fiscal Year 2015 Inpatient Psychiatric Facilities Prospective Payment System

On May 1, 2014, CMS issued aproposed rule that would update the prospective payment rates for Medicare inpatient hospital services provided by inpatient psychiatric facilities (IPFs). These changes would be applicable to IPF discharges occurring during the fiscal year (FY) beginning Oct. 1, 2014, through Sept. 30, 2015. This proposed rule would also address implementation of ICD-10-CM and ICD-10-PCS codes; propose a new methodology for updating the cost of living adjustment (COLA); and propose new quality measures and reporting requirements under the IPF quality-reporting program. The proposed rule will appear in the May 6, 2014, Federal Register and will be open to public comment for 60 days.

Proposed Fiscal Year 2015 Payment and Policy Changes for Medicare Inpatient Rehabilitation Facilities

On May 1, 2014, CMS issued aproposed rule that would update the prospective payment rates for inpatient rehabilitation facilities (IRFs) for federal fiscal year (FY) 2015 (for discharges occurring on or after Oct. 1, 2014, and on or before Sept. 30, 2015) as required by the statute. The rule also proposes to collect data on the amount and mode (that is, Individual, Group and Co-Treatment) of therapy provided in the IRF setting according to therapy discipline, revise the list of impairment group codes that presumptively meet the “60 percent rule” compliance criteria, provide for a new item on the Inpatient Rehabilitation Facility-Patient Assessment Instrument (IRF-PAI) form to indicate whether the prior treatment and severity requirements have been met for arthritis cases to presumptively meet the “60 percent rule” compliance criteria, and revise and update quality measures and reporting requirements under the IRF quality reporting program (QRP). The proposal also addresses the implementation of the International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM), for the IRF prospective payment system (PPS), effective when ICD-10-CM becomes the required medical data code set for use on Medicare claims and IRF-PAI submissions. The proposed rule will appear in the May 7 Federal Register and will be open to public comments for 60 days.

FDA Proposed Rule on Deeming Tobacco Products To Be Subject to the Federal Food, Drug, and Cosmetic Act

FDA has issued aproposed rule that would deem products meeting the statutory definition of “tobacco product,” except accessories of a proposed deemed tobacco product, to be subject to the Federal Food, Drug, and Cosmetic Act (the FD&C Act), as amended by the Family Smoking Prevention and Tobacco Control Act (Tobacco Control Act). The Tobacco Control Act provides FDA authority to regulate cigarettes, cigarette tobacco, roll-your-own tobacco, smokeless tobacco and any other tobacco products that the Agency by regulation deems to be subject to the law. Option 1 of the proposed rule would extend the Agency’s “tobacco product” authorities in the FD&C Act to all other categories of products, except accessories of a proposed deemed tobacco product, that meet the statutory definition of “tobacco product” in the FD&C Act. Option 2 of the proposed rule would extend the Agency’s “tobacco product” authorities to all other categories of products, except premium cigars and the accessories of a proposed deemed tobacco product, that meet the statutory definition of “tobacco product” in the FD&C Act. FDA also is proposing to prohibit the sale of “covered tobacco products” to individuals under the age of 18 and to require the display of health warnings on cigarette tobacco, roll-your own tobacco and covered tobacco product packages and in advertisements. FDA is taking this action to address the public health concerns associated with the use of tobacco products. Comments are due July 9, 2014.

CMS Proposed Rule on Life Safety Codes for Medicare, Medicaid Providers

On April 14, 2014, CMS announced a proposed rule on the adoption of an updated life safety code (LSC) that CMS would use in its ongoing work to ensure the health and safety of all patients, family and staff in every provider and supplier setting. The updated code contains new provisions that are vital to the health and safety of all patients and staff. CMS intends to adopt the National Fire Protection Association’s (NFPA) 2012 editions of the (LSC) and the Health Care Facilities Code (HCFC), as the 2012 edition of the LSC also is aligned with the international building codes to make compliance across codes much simpler for Medicare- and Medicaid-participating facilities.

Currently, CMS applies the standards set out in the 2000 edition of the LSC to facilities in order to ensure patients’ and caregivers’ health and safety. CMS is now proposing to adopt the 2012 editions of the LSC and the Health Care Facilities Code. The LSC sets out fire safety requirements for new and existing buildings, and is issued by the NFPA, a private, nonprofit organization dedicated to reducing loss of life due to fire. The new edition of the LSC applies to: hospitals, long-term care facilities (LTC), critical access hospitals (CAHs), Programs for All-Inclusive Care for the Elderly (PACEĀ®), religious nonmedical healthcare institutions (RNHCIs), hospice inpatient facilities, ambulatory surgical centers (ASCs) and intermediate care facilities for individuals with intellectual disabilities (ICF-IIDs).

Comments are due June 16, 2014.

5. Reports

World Health Organization: Threat of Antimicrobial Resistance

According to a recent report by the World Health Organization, antibiotic resistance — when bacteria change so antibiotics no longer work in people who need them to treat infections — is now a major threat to public health. Key findings of the report, “Antimicrobial resistance: global report on surveillance,” include concerns that resistance to the treatment of last resort for life-threatening infections caused by a common intestinal bacteria, Klebsiella pneumoniae — carbapenem antibiotics — has spread to all regions of the world. K. pneumoniae is a major cause of hospital-acquired infections such as pneumonia, bloodstream infections and infections in newborns and intensive-care unit patients. In some countries, because of resistance, carbapenem antibiotics would not work in more than half of people treated for K. pneumoniae infections. In addition, resistance to one of the most widely used antibacterial medicines for the treatment of urinary tract infections caused by E. coli — fluoroquinolones — is very widespread. In the 1980s, when these drugs were first introduced, resistance was virtually zero. Today, there are countries in many parts of the world where this treatment is now ineffective in more than half of patients.

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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