Washington Healthcare Update

October 26, 2015

Pardon Our Dust

We recently launched this new site and are still in the process of updating some of our archived content. Some details of this article may be incomplete, links may be broken, and other elements may not display properly yet. We appreciate your patience and understanding.

This Week:The House sets date to elect a new Speaker… No path forward on debt ceiling yet… More co-ops collapse.

1. Congress

House of Representatives


2. Administration

3. State Activities

4. Regulations Open for Comment

5. Reports

1. Congress


Elections for Speaker of the House and Potential Changes at Ways and Means Committee

Rep. Paul Ryan (R-WI) announced Tuesday (Oct. 20) that he will run for the House Speaker position if the major House Republican coalitions endorse him. Hegave those coalitions until the end of the week to decide. Speaker Boehner announced that the internal Republican election for Speaker will be Oct. 28, andthe floor election (the full House of Representatives) will be Oct. 29.

If Rep. Paul Ryan, who is currently the Chairman of the House Ways and Means Committee, becomes Speaker, a vacancy occurs at Ways and Means. This committeeis responsible for legislation concerning tax, trade, Medicare and Social Security. Rep. Jim Brady (R-TX), who currently chairs the committee’ssubcommittee on health, is next in line to be Chair of the full committee. However, Rep. Pat Tiberi (R-OH) has made clear that if the Chairmanship is open,he too will run. Tiberi is fourth in seniority on the panel and current chair of the trade subcommittee. He would have to jump over Reps. Sam Johnson(R-TX), Brady and Devin Nunes (R-CA). Johnson is not expected to throw his name in for the slot. Nunes already serves as chairman of the House IntelligenceCommittee. Brady previously ran against Ryan for the chairmanship before withdrawing from the race.

In addition, to a change in Chairmanship, should Ryan become Speaker, another Republican would have to be named to serve on the committee.

House Energy and Commerce Health Subcommittee Holds Hearing to Examine Medicare Part D Medication Therapy Management Program

The House Energy and Commerce Subcommittee on Health, chaired by Rep. Joe Pitts (R-PA), held a hearing on Oct. 21 entitled “Examining the Medicare Part DMedication Therapy Management Program.” Subcommittee members discussed opportunities to strengthen medication therapy management for seniors in MedicarePart D. The program’s original intention was to help people adhere to their prescriptions more diligently, thus optimizing therapeutic outcomes andreducing the need for additional care. The Centers for Medicare and Medicaid Services (CMS) announced a new program designed to strengthen it. Subcommitteemembers reviewed possible plans to improve the Medication Therapy Management Program (MTM) so that the people covered will benefit and experience morepositive outcomes.

Witness List

Panel I

Tim Gronniger
Director of Delivery System Reform
Centers for Medicare and Medicaid Services

Panel II

Lawrence Kocot
Principal and National Leader
Center for Healthcare Regulatory Insight

Mark Merritt
President and CEO
Pharmaceutical Care Management Association

Jesse McCullough
Field Clinical Services
Rite Aid Corporation

Richard Thomas Benson
Associate Director of Stroke
MedStar Washington Hospital Center

A background memo can be found here.

For more information or to watch the hearing, please visit energycommerce.gov.

House Energy and Commerce Health Subcommittee Holds Hearing to Review the Accuracy of Medicaid and Exchange Eligibility Determinations

The House Energy and Commerce Subcommittee on Health, chaired by Rep. Joe Pitts (R-PA), held a hearing on Oct. 23 entitled “Reviewing the Accuracy ofMedicaid and Exchange Eligibility Determinations.” Recent reports from the Department of Health and Human Services’ Office of Inspector General (OIG) andthe Government Accountability Office (GAO) raised concerns about the accuracy of the eligibility verification systems related to Healthcare.gov and stateexchanges. Subcommittee members heard from two witnesses from the GAO about the agency’s assessment of Medicaid and exchange eligibility controls andcoordination:

  • Carolyn Yocom presented findings from two new GAO reports. One report assesses federal and state policies and procedures to minimize duplicative coverage for Medicaid and exchange premium subsidies. The second report examines federal efforts to ensure the accuracy of Medicaid eligibility determinations and the federal matching rate for state Medicaid expenditures.
  • Seto Bagdoyan presented preliminary results of undercover testing of federal and state exchanges’ application, enrollment and eligibility verification controls, including opportunities for potential enrollment fraud, during ACA’s second open enrollment period.


Carolyn Yocom
Health Care
Government Accountability Office

Seto Bagdoyan
Audit Services
Forensic and Investigative Service
Government Accountability Office

A background memo can be found here.

For more information or to watch the hearing, please visit energycommerce.gov.

CBO Reports That House Reconciliation Legislation (H.R. 3762) Would Reduce the Deficit by $130 Billion

On Oct. 20, the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) released a cost estimate for the bill that repeals major partsof Obamacare and defunds Planned Parenthood for one year. H.R. 3762 would lower the deficit by about $130 billion over the 2016-2025 period. Excludingmacroeconomic effects, the bill would cut the deficit by $79 billion. The biggest sources of the budgetary effects come from repealing provisions of theAffordable Care Act (ACA) and repealing the federal excise taxes on the sale of medical devices and employer-provided health coverage with higher premiums.

Repeal of the individual and employer mandates results in net budgetary savings to the federal government of $147.1 billion over 10 years. However, thereport also states that repealing the individual mandate would also result in higher health insurance premiums in the non-group market after 2016. Repealof the medical device tax would reduce revenues and thus increase federal deficits by about $23.9 billion over 10 years.

Repeal of the excise tax on high-premium insurance plans (the Cadillac tax) would increase federal deficits over 10years by $109.3 billion decrease inrevenues, partially offset by $18.2 billion decreases in spending.

In addition, the report estimates that fewer people would enroll in employment-based coverage, in the non-group market and in Medicaid and the Children’sHealth Insurance Program (CHIP).

The House passed the Reconciliation legislation on Oct. 23, 240 to 189.

The CBO cost estimate report can be found here.

Bipartisan Group Asks CMS to Finalize Guidelines Concerning Part D and Pharmacy Price Concessions

A bipartisan group of House members is asking CMS to finalize guidelines released last year on pharmacy price concessions to increase transparency in theMedicare Part D program. Without this information, beneficiaries choosing a plan for 2016 now may be relying on inaccurate data on the Medicare Plan Finderwebsite.

The letter signed by 11 members was led by Reps. Austin Scott (R-GA) and Dave Loebsack (D-IA) and said some Part D plans manipulate how and when to reportcertain price concessions they received from pharmacies, as well as incentive payments made to pharmacies related to drugs dispensed to Medicarebeneficiaries. The 2014 guidance would standardize the process. In addition, the guidance would help ensure Part D plans consistently report direct andindirect remuneration fees paid by pharmacies.

The letter was supported by the National Community Pharmacists Association. Last year, in testimony before the House Energy and Commerce HealthSubcommittee, the Medicare Rights Center advocated standardizing reporting by drug plans on negotiated prices because it would benefit the Medicare programand also improve the accuracy of premium and cost amounts in the Medicare Plan finder.

Debt Ceiling Legislation Stalled

The House GOP leaders ditched their plans to bring a vote to the floor on a proposal to raise the debt ceiling while imposing new limits on the executivebranch’s powers. Republican leadership found that the proposal would fall short of the 218 votes needed if it were brought to a vote. It was not expectedto pass the Senate. There is no apparent plan ready, and the debt ceiling has to be raised by Nov. 3.


Sen. Ben Sasse Asks for an Explanation of Co-op Closures

Sen. Ben Sasse (R-NE) announced he will block the approval of any Health and Human Services (HHS) nominees until the department explains the reasons behindthe collapse of eight co-ops formed under the Affordable Care Act (ACA). Currently there are three HHS nominees pending in the Senate. They are: KarenDeSalvo, nominated for HHS Assistant Secretary for Health; Andy Slavitt, nominated for Administrator for the Centers for Medicare and Medicaid Services(CMS); and Robert Califf, nominated for Food and Drug Administration Commissioner. Twenty-three co-ops were started under the ACA. In a letter to HHS, Sasseexplains, “Taxpayers have spent a total of $2.4 billion on loans for co-ops and hundreds of thousands of Americans have enrolled in these health plans. Itis imperative that we understand the cause of these failures and that the Centers for Medicare and Medicaid Services (CMS) be working to protect taxpayersfrom wasted spending and consumers from unstable health plans.”

One of the co-ops that failed also did business in Nebraska. There are 420,000 people enrolled in co-ops that must find new coverage in the next enrollmentperiod beginning Nov. 1.

The Senate HELP Committee Schedules Hearing on Mental Health

The Senate Health, Education, Labor and Pensions Committee (HELP) scheduled a hearing entitled “Mental Health and Substance Use Disorders in America:Priorities, Challenges, and Opportunities.” The hearing is set to take place Oct. 29 at 10 a.m. The witness list includes Substance Abuse and Mental HealthServices Administration (SAMHSA) Administrator Kana Enomoto, Health Resources and Services Administration (HRSA) Acting Administrator Jim Macrae andoutgoing National Institute of Mental Health (NIMH) Director Thomas Insel. Legislation is not expected to be written until early next year.

2. Administration

HHS Awards $22.9 Million in Mental Health Planning Grants

On Oct. 19, the U.S. Department of Health and Human Services (HHS) announced thatthe Substance Abuse and Mental Health Services Administration (SAMHSA), together with the Centers for Medicare and Medicaid Services (CMS) and theAssistant Secretary of Planning and Evaluation (ASPE), awarded $22.9 million in planning grants to support 24 states in their efforts to improve thebehavioral health of their citizens.

“The planning grants will help states strengthen payment for behavioral health services for Medicaid and CHIP beneficiaries, and will help individuals withmental and substance use disorders obtain the health care they need to maintain their health and well-being,” said Vikki Wachino, deputy administrator ofCMS, and director, Center for Medicaid and CHIP Services. This money will be used by the states to develop applications to participate in a two-yeardemonstration program — just eight of those 24 states will be selected for this program, which will begin January 2017. Under the demonstration program,the eight selected states will provide behavioral health services to eligible beneficiaries and be paid using an approved prospective payment system.

In addition to supporting the application process, the grants will aim toward supporting states to certify community behavioral health clinics, solicitinput from stakeholders and establish prospective payment systems for demonstration reimbursable services.

HHS Awards $2.2 Billion in Ryan White HIV/AIDS Grants

On Oct. 22 HHS Secretary Sylvia Mathews Burwell announced more than $2.2 billion in Ryan White HIV/AIDS Program grants were awarded in fiscal 2015. Thisfunding supports a coordinated and comprehensive system of care to ensure that more than half a million people living with and affected by HIV in theUnited States continue to have access to critical HIV health care, support services and essential medications. More than $600 million went to 53metropolitan areas for core medical and support services for people living with the disease and approximately $1.3 billion in grants to states andterritories for medical and support services. Other funding went toward the education and training of health care professionals; community organizationsthat provide family-centered care for women, infants and young children; and programs targeted at minorities.

For more information about the recipients of the funding click here.

CMS Answers Questions on the Impact of the PACE Act on State Small Group Expansion

In response to questions from state regulators and health insurance experts,the Centers for Medicare and Medicaid Services (CMS) released an FAQ entitled “Frequently Asked Questions on the Impact of PACE Act on State Small Group Expansion.” The Protecting Affordable Coverage for EmployeesAct (PACE Act) makes the ACA’s small-group expansion optional — it defines a small employer as one who employed an average of 1-50 employees on businessdays during the preceding calendar year, but gives states the option to extend this definition to include employers with up to 100 employees. If a statechooses expansion, it is requested to inform CMS by Oct. 30.

In the FAQ, CMS clarified what constitutes a state election to change the definition of a small employer, whether carriers have the ability to change theirrate filings for 2016, and more.

CMS Adds FAQ on Public Health Reporting

On Oct. 6, the Centers for Medicare and Medicaid Services (CMS) released the final rule for the Medicare and Medicaid Electronic Health Record (EHR)Incentive Programs. To support provider participation in 2015, CMS has also released FAQ #12985 in response to inquiries about the public health reporting objective in2015.

In the FAQ, CMS clarifies that alternate exclusions to the measures in the public health reporting objective are available for providers in 2015 based onthe changes to the public health reporting objective. Providers for whom the alternate exclusion is applicable will be presented with that option in theattestation system.

Advocacy Group Consumers’ CHECKBOOK Sues HHS and Receives Marketplace Public Use Files

On Oct. 15, the U.S. Department of Health and Human Services (HHS) provided Consumer’s CHECKBOOK with the 2016 plan benefit details for federallyfacilitated marketplace products — known as the marketplace public use files. This occurred per a court order after Consumers’ CHECKBOOK sued HHS under theFreedom of Information Act (FOIA). The files are crucial to stakeholders because they provide benefits and rate information that is necessary for theircost calculations. The files were released to the general public Oct. 23.

The court order can be foundhere

Federally Facilitated Marketplaces (FFMs) Are Investigating an Error Preventing Customers From Enrolling

The Centers for Medicare and Medicaid Services (CMS) published a slideshow Aug. 17 announcing that federally facilitated marketplace states (FFMs) areinvestigating a validation error in the system, blocking people from enrolling in coverage. This has been an ongoing problem since May. According to theslideshow, in most cases the consumers were trying to update their application, but couldn’t continue to enrollment. If affected, people need to contactthe FFM call center to open a Health Insurance Casework System (HICS) to the issuer with their updated information. “The HICS case will note that theconsumer experienced the 500.300588 error and will instruct the issuer to update the issuer’s system; it will also note whether the consumer is entitled toa retroactive effective date based on the date that the consumer attempted to update his or her application and enroll.”

The CMS slideshow can be foundhere.

Reaction to CMS Report on 115 Waivers

Last week, the Centers for Medicare and Medicaid Services (CMS) released a legislatively required report concerning Medicaid 115(a) waivers. However, twoHouse members and the Government Accountability Office (GAO) raised concerns about the report. The GAO said the criteria CMS used to approve a 115 waiverapplication are not specific enough as described in the report. Rep. Gus Bilirakis (R-FL) raised concerns about whether a state was coerced into takingaction when it may not have wanted to do so. House Energy and Commerce Subcommittee on Health Chairman Joe Pitts (R-PA) raised concerns about the report’sdescription of the approval process and whether the agency was approving waivers that replicated other federal programs. It is likely that the CMS approvalprocess will continue to be scrutinized by Congress and the GAO.

CMS Expands Prior Authorization for Repetitive Scheduled Non-Emergent Ambulance Transports

On Oct. 23, CMS published a notice announcing an expansion of the three-year Medicare Prior Authorization Model for Repetitive Scheduled Non-EmergentAmbulance Transport in accordance with Section 515(a) of the Medicare Access and CHIP Reauthorization Act of 2015. This expansion will begin on Jan. 1,2016, in Maryland, Delaware, the District of Columbia, North Carolina, Virginia and West Virginia.

FDA’s Final “Deeming Rule” on Tobacco Products Now Being Reviewed by the OMB

The Tobacco Control Act provides FDA authority to regulate cigarettes, cigarette tobacco, roll-your-own tobacco, smokeless tobacco and any other tobaccoproducts that the Agency by regulation deems to be subject to the law

TheFDArulethat will give the agency authority to regulate e-cigarettes and other various tobacco products originally outside its purview is now being reviewed by theWhite House. The proposed rule was published Apr. 25, 2014. On Oct. 20, the Office of Management and Budget received the final deeming rule for review. Therule was created by the Family Smoking Prevention and Tobacco Control Act (Tobacco Control Act) and its regulations would not take effect until two yearsafter they are finalized — per the timeline in the proposed rule.

There are three major areas covered in the proposed rule: 1) setting the minimum legal age of sale at 18; 2) restrictions on vending machine sales; and 3)specifications for warning labels. It would also require that new tobacco products go through FDA’s pre-market review process. FDA announced its intentionto regulate e-cigarettes four years ago and has faced criticism for slow progress.

FDA Nominee’s Ties to Industry Called into Question

The AIDS Healthcare Foundation called on the Obama administration to withdraw Robert Califf’s nomination due to his relationship with Faculty Connections,a firm that seeks to find academic researchers who can help influence providers and others. Through that company he worked with Amgen, AstraZeneca, DaichiSankyo, Merck, Novartis and Sanofi over the last year. The Chairman of the Senate Health, Education, Labor and Pensions Committee (HELP) has said heexpects to hold a confirmation hearing before Thanksgiving.

3. State Activities

Colorado Co-op Fights Closure But Drops Lawsuit

Colorado HealthOP filed a lawsuit in state court seeking a temporary restraining order preventing the Colorado Division of Insurance from kicking the co-opoff the state’s exchange. However, after a hearing on Oct. 19, the co-op dropped its lawsuit. Colorado HealthOP had argued in the legal complaint that itwas poised to turn a profit next year, despite missing out on nearly $9 million in anticipated risk corridor payments from the feds.

South Carolina Co-op Becomes Ninth Co-op to Close

Consumers’ Choice Health Insurance Company, a co-op created with Affordable Care Act (ACA) funding, will close at the end of the year. The co-op has about40 percent of South Carolina’s exchange enrollment. This means about 67,000 customers will need to shop for new plans when the open enrollment periodbegins on Nov. 1. Under the ACA, 23 startup insurers were provided $2.4 billion in low-interest loans. Just 14 remain in business.

Florida: Cigna Announces Its Withdrawal From the Florida State Exchange

Cigna announced it will leave the Florida state exchange two weeks before the 2016 enrollment period begins. Cigna spokesman Joseph Mondy explained thatthe insurer’s departure is due to “an exponential increase in fraudulent and abusive care delivery practices in 2015 in Florida.” As a result, an estimated30,000 people enrolled in Cigna plans in Florida will have to find new coverage for next year. Those receiving coverage from Cigna through Medicare or agroup plan through an employer or union will not be affected by this change.

Minnesota: Resident Sues the State Over Its Decision to Drop UCare

A resident of Minnesota, filing under an anonymous name, is suing the state over its decision to drop health insurer UCare from public health careprograms. The insurer was dropped after a competitive bid process, and that means 370,000 customers will need to pick new plans for next year. UCare hadfiled its own lawsuit, but subsequently dropped it. The resident who is suing argues that the state must offer a free choice of plans to Medical Assistanceenrollees, and that the state is required to provide people with an option to keep their current providers.

New York: Four Urgent Care Centers Will Disclose More Information on the Insurance Plans They Accept

Four urgent care centers in New York signed agreements to disclose more information concerning the insurance plans they accept. The centers are 181stStreet Urgent Care in Manhattan; Brookdale Urgent Care (affiliated with Brookdale Hospital); New York Doctor’s Urgent Care (two locations in Manhattan);and Cure Urgent Care (three locations in Manhattan and Long Island). These centers will list the health plans they contract with as in-network providersand also explain to consumers the consequences of using an out-of-network provider.

These agreements are part of the first enforcement action brought under New York’s new “surprise medical bill” law. The new law aims to protect consumers who get surprised by largerbills than expected and see providers on them who are not part of their insurance plan networks. Even though consumers may not notice, their visits tothese urgent care clinics can result in these out-of-network bills.

Arizona: Comment Period Opens for Proposed Changes in Arizona’s Medicaid Expansion Population

The required comment period for changes Arizona is seeking to make for its Medicaid expansion population started on Oct. 15. These changes include a new 2percent premium paying up to 3 percent in copays, eliminating non-emergency medical transportation, a five-year maximum lifetime coverage limit and a workrequirement. Comments will be accepted through Nov.