Washington Healthcare Update

March 28, 2016

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 Affordable Care Act turned 6 years old on March 23… Four in ten voters say health care is extremely important when picking a President, according toa Kaiser Family Foundation’s new tracking poll… Congressional Budget Office says in 2026, the number of Americans covered by employment-sponsored insurance will be 152 million, a slight decrease from 155 million today.

1. Congress

House of Representatives


2. Administration

3. State Activities

4. Regulations Open for Comment

5. Reports

1. Congress

House of Representatives

House Small Business Committee Holds Hearing on Small Business Health Insurance Tax Credit

On March 22, the House Small Business Committee held a hearing to examine the efficacy of the Affordable Care Act’s (ACA) small business health insurancetax credit.

The National Federation of Independent Business (NFIB)testifiedat the hearing that the health tax credit is not working. “For the same reason that no one buys a new car because of an air freshener, no one is buyingvery expensive health insurance because of a small, temporary and hard-to-qualify-for tax credit,” said NFIB research director Holly Wade.

Government Accountability Office (GAO) Director of Strategic Issues James McTigue, Jr., also testified at the hearing and released a report on the health tax credit. According to the report, relatively few employers are claimingthe small business health insurance tax credit. GAO found that claims of the health tax credit have continued to be lower than projected to be eligible bygovernment agency and small business group estimates, limiting the effect of the credit on expanding health insurance coverage through small employers.

Just 181,000 small businesses claimed the ACA’s health tax credit in 2014, down from about 188,303 claims in 2010. These numbers are relatively lowcompared to the number of employers eligible for the credit. In 2012, GAO estimated between 1.4 million and 4 million employers were eligible. GAO citedmultiple reasons for the lack of use, including the cost and complexity involved in claiming the tax credit that employers can use for only two consecutiveyears.

For more information or to view the hearing, click here.

House Telehealth Working Group Asks CMS to Include Telemedicine in Implementation of MIPS and APMs

House Energy and Commerce Telehealth Working Group members sent a letter to the Centers for Medicare and Medicaid Services (CMS) Acting Administrator AndySlavitt asking that CMS incorporate telemedicine in its implementation of the Merit-Based Incentive Payment System (MIPS) and Alternative Payment Models(APMs).

In theMarch 15 letter members said MIPS will evaluate Medicare Part B providers based on quality, resource use,clinical practice improvement activities and meaningful use of certified electronic health record (EHR) technology. They argued that the incorporation oftelemedicine data should also be considered a meaningful use of EHRs.

Also, remote synchronous face-to-face video visits between providers and patients or remote patient monitoring of chronic conditions should be outlined asa clinical practice improvement activity. The working group also urged CMS to not subject eligible APMs to telehealth restrictions. For example,telemedicine could be identified within the Patient-Centered Medical Home model.

Reps. Greg Walden (R-OR), Doris Matsui (D-CA), Peter Welch (D-VT), Robert Latta (R-OH), Gregg Harper (R-MS), Bill Johnson (R-OH) and Markwayne Mullin(R-OK) signed the letter.

House Judiciary Committee Holds Markup on Medical Malpractice Legislation but the Bill Gets Derailed

On March 22, the House Judiciary Committee held a markup on the tort reform bill —the Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act — to be included in the House GOP budget package. The bill establishes a $250,000cap on compensation for non-economic damages because of medical malpractice, limits the contingency fees lawyers can charge, exempts firms whose drugs anddevices are FDA approved, and implements a three-year statute of limitations after the manifestation of an injury. It applies to both health care providersand makers of FDA-approved drugs and devices. The Congressional Budget Office (CBO) estimates the tort reform bill would reduce spending by $44 billionover ten years.

Republicans have been unable to pass the HEALTH Act for more than a decade. At the markup, the legislation met the same opposition from states’-rightsconservatives as it did in 2011 when the GOP previously tried to pass the bill. Reps. Ted Poe (R-TX) and Louie Gohmert (R-TX) argued against the bill as aninfringement of states’ rights in 2011 and both opposed the bill again on March 22.

Judiciary Chair Robert Goodlatte (R-VA) said committee Republicans modeled H.R. 4771 after tort reform laws in California and Texas. He argued that it iswell within Congress’s power to impose federal caps on non-economic damages. Referring to the Federalist Papers, Goodlatte said that Congress may passlegislation that supersedes state tort laws when state laws pose barriers to free enterprise.

Democrats spent their time arguing against the policies in the bill. Ranking Democrat John Conyers (MI) said women, children and the poor are hurt the mostwhen non-economic damages are capped because they are less likely to be able to demonstrate economic damages due to lost wages.

The committee adjourned without voting on the bill.

Additionally, 29 groups — including the Center for Justice and Democracy and Consumer Watchdog — have signed a letter protesting the bill. To read theletter, click here.

Oversight Subcommittees Hold Joint Hearing on Health Information Technology

On March 22, two Oversight subcommittees — Information Technology and Health Care, Benefits, and Administrative Rules — held a hearing on standardizingand modernizing health information technology. Members focused on policies ranging from those that affect wearable devices and apps to electronichealth records (EHRs). There were calls for new or improved legislation to fill in the gaps in current cybersecurity law. Rep. Ted Lieu (D-CA) notedthat ransomware attacks against health care institutions are not covered in the Health Information Technology for Economic and Clinical Health Act(HITECH), which promotes the adoption of EHRs.


Karen DeSalvo, M.D.
National Coordinator for Health Information Technology
U.S. Department of Health and Human Services (HHS)

Jessica Rich
Director, Bureau of Consumer Protection
U.S. Federal Trade Commission

Matthew Quinn
Federal Managing Director
Intel Healthcare and Life Sciences

Neil DeCrescenzo
Member, Executive Committee
Healthcare Leadership Council

Mark Savage
Director of Health IT Policy and Programs
National Partnership for Women and Families

For more information or to view the hearing, click here.

Energy and Commerce Committee Holds “Conversation on Child Cures”

On March 23, Energy and Commerce Committee Chairman Fred Upton (R-MI) and Rep. Diana DeGette (D-CO) led an event entitled Conversation on Child Cures.”The Who front man and co-founder of Teen Cancer America, Roger Daltrey, headlined the event. Featured patients and advocates included the following:

Sarah Kennedy, mother of Brooke and Brielle Kennedy, sisters battling spinal muscular atrophy (SMA) in Mattawan, Michigan, and the inspiration behind the Cureseffort

Walter Whitt, senior at Bishop O’Connell High School in Arlington, Virginia, who has cystic fibrosis (CF)

Joel Wood, co-founder (with his wife, Dana) of the Foundation to Eradicate Duchenne

The event came just a week after Upton, DeGette and other members of the Energy and Commerce Committee met with Vice President Joe Biden at the WhiteHouse to discuss the 21st Century Cures legislative effort, which is seeking to spur safer cures and treatments for patients, especially children andyoung adults.

The House passed the Cures bill in July 2015 and a companion bill is currently being negotiated in the Senate by Sens. Lamar Alexander (R-TN) and Patty Murray (D-WA).

To see a related press release, click here.

House Oversight Committee Holds Hearing on Opioid Abuse

On March 22, the House Oversight Committee held a hearing to examine the strategies of the Office of National Drug Control Policy and the SubstanceAbuse and Mental Health Services Administration to address opioid abuse. Members highlighted the increase in abuse of illegal opioids, such as heroinand fentanyl, as well as controlled prescription opioids like hydrocodone and oxycodone. Key takeaways from the hearing are as follows:

  • Drug overdoses are the leading cause of accidental death in the United States
  • Experts believe the current epidemic of opioid abuse has contributed to an increase in heroin deaths as opioid consumers move toward heroin use
  • In recent years, opioid-related overdoses have started to decrease while heroin-related overdoses have severely increased
  • According to the DEA, Mexican-based criminal organizations are the principal suppliers of heroin in the United States. Members emphasized a need to stop the flow of heroin across the southern border
  • Primary and secondary prevention programs are in place to decrease the use of potential gateway drugs in youth and others vulnerable to heroin use
  • In 2015, $400 million was appropriated to address the opioid epidemic — an increase of $100 million. To date, none of the money has been spent

For additional information or to view the hearing, click here.


Senate Activity on Drug Abuse and Mental Illness

In the past few weeks, the Senate has addressed legislation to curb drug abuse and treat mental illness:

  • The Senate Health, Education, Labor and Pensions Committee unanimously passed the Mental Health Reform Act of 2016 (S. 1945) on March 16
  • Senate Democrats introduced on March 7 the Behavioral Health Coverage Transparency Act (S. 2647) to strengthen parity in mental health and substance use disorder benefits
  • The Senate passed the Comprehensive Addiction and Recovery Act (S. 524) on March 10 — the bill would let the attorney general give out grants to those fighting the prescription opioid epidemic

2. Administration

CMS Announces Final Round of Applications for the Next Generation ACO Model

On March 21, the Centers for Medicare and Medicaid Services (CMS) announced the second and final round of applications for the Next Generation AccountableCare Organization (ACO) Model. The model will begin its second performance year on Jan. 1, 2017. Details on model parameters are included in the Requestfor Applications, which is now available on theNext Generation ACO Model web page.

Available below are links and dial-in information to newly scheduled Open Door Forums:

All organizations interested in applying to the Next Generation Model must first submit a letter of intent (LOI), which is now available on the NextGeneration ACO Model web page. The LOI due date has been extended to May 2, 2016.

CMS Signals Interest in a Home Care Prior Authorization Demo

The Centers for Medicare and Medicaid Services (CMS) signaled interest in subjecting home health claims in some states to prior authorization through ademonstration. CMS plans to test whether prior authorization would work in a Medicare Part B environment. The agency released a Paperwork Reduction Actnotice that said it is developing a prior authorization demonstration for home health in high-risk fraud states including Florida, Illinois, Michigan,Massachusetts and Texas. Beneficiary advocates say the demonstration would hurt home health access.

White House Asking Medical Schools to Require Prescriber Education

The White House is asking medical schools to pledge to make prescriber education a graduation requirement, and that the coursework be consistent with theCenters for Disease Control and Prevention’s (CDC) opioid prescribing guidelines.

This could confirm the medical community’s fear that there would be an effort to force people to strictly follow the guidelines once released. Others worrythis type of pledge could open the doors for outside influence on the education curriculum.

Tannaz Rasouli, senior director of public policy and strategic outreach at the Association of American Medical Colleges (AAMC), said the group thinks it isup to the Liaison Committee on Medical Education (LCME) — an accrediting body recognized by the Department of Education — to set standards for medicaleducation. The AAMC has not taken a position on the CDC guidelines.

The CDC released its final guidelines on March 15. The recommendations include: considering non-opioid medications as an initial therapy; starting patientswith chronic pain on immediate-release opioids instead of extended-release/long-acting opioids; starting patients with the lowest effective dosage; andprescribing no greater quantity than needed for the expected duration of pain.

Outside stakeholders and government officials, including U.S. Food and Drug Administration (FDA) Commissioner Robert Califf, have raised concerns about theevidence supporting the guidelines and the process used to develop them.

CMS Office of the Actuary Certifies Diabetes Prevention Program Saves Money, Improves Health

On March 23, the Centers for Medicare and Medicaid Services (CMS) Office of the Actuary certified that an intervention program preventing diabetes savesthe government money. Specifically, the office certified that expansion of the Diabetes Prevention Program — a model funded by the Affordable Care Act(ACA) — would reduce net Medicare spending. The expansion was also determined to improve the quality of patient care without limiting coverage or benefits.This is the first time that a preventive service model from the CMS Innovation Center has become eligible for expansion into the Medicare program.

The three-year pilot program run by YMCA succeeded in its efforts to prevent high-risk enrollees from fully developing type 2 diabetes. In the first year,the average enrollee lost about 5 percent of body weight, and Medicare saved $2,650 for each enrollee over a 15-month period, determined by a comparison ofparticipants’ costs to otherwise similar enrollees.

The federal agency’s endorsement of expanding the Medicare diabetes program nationwide could mean that tech firms and community centers will soon obtainfederal funding to keep patients thin. With certification from the CMS actuary, Medicare can begin the process of reimbursing providers for diabetesprevention efforts — which it could do in Medicare’s physician fee schedule update this summer.

If CMS expands the diabetes prevention program, it will be a victory for startup Omada Health and YMCA, which already serve tens of thousands ofprediabetics.

Omada executive Mike Payne estimates CMS reimbursement could drive up the numbers served by various programs nationwide to 6 million within the next fewyears, with roughly 22 million Medicare beneficiaries potentially eligible.

Community YMCAs that participated in the pilot program saw enrollment increase almost 1,100 percent compared to its typical diabetes prevention program,which may be reimbursed by private companies or require enrollees to pick up the cost. The YMCA’s Matt Longjohn attributed the huge enrollment jump to theMedicare pilot program’s easing costs for participants.

The large numbers of potential new customers could create an atmosphere in which some unethical or ineffective providers are paid for their preventionservices. The Centers for Disease Control and Prevention (CDC) and CMS will need to create an effective oversight structure to prevent this from happening.The expansion could also strain existing infrastructure.

To see a related press release, click here.

CMS Releases Risk Adjustment Methodology White Paper

On March 24, the Centers for Medicare and Medicaid Services (CMS) released the Risk Adjustment White Paper,which provides a summary of the Health and Human Services (HHS) risk adjustment methodology, as it applies to health insurance issuers in theindividual and small group markets, including detailed explanations of the risk adjustment models and payment transfer formula, as well as the updatesto the models CMS has made since the initial 2014 calibration. The white paper also explores potential areas of improvement for the 2018 benefit yearand beyond.

CMS is looking at ways to incorporate prescription drug data, better account for partial-year enrollments and adjust the population set it uses to createthe payment formula. Some small health plans have said they have no way to reliably forecast how much they will have to receive or pay out under the riskadjustment program. They argue that major insurers are better able to manipulate their data and qualify for payments.

The potential changes outlined in the white paper largely track suggestions made by Avalere Health in a report also issued on March 24. The consulting firmidentifies flaws in the methodology used by CMS to create the payment formula. For example, CMS uses data from the employer-based insurance market tocreate the methodology, but there are substantial differences between that population and the individual and small group markets.

This white paper will inform the discussion at the CMS risk adjustment meeting on March 31, which is open to the public. CMS is seeking feedback on thetopics described in the paper, as well as other improvements that should be made to its risk adjustment models and the payment transfer formula,including with respect to how the various changes will interact.Comments should be submitted on the proposals discussed in this paper through hhshccraops@cms.hhs.gov orREGTAP athttps://www.REGTAP.info, by April 22, 2016.

CMS Launches New Payment Model to Improve Care for Nursing Facility Residents

On March 24, the Centers for Medicare and Medicaid Services (CMS) announced it will test a new payment model for nursing facilities and practitioners thatis intended to further reduce avoidable hospitalizations, lower combined Medicare and Medicaid spending and improve the quality of care received by nursingfacility residents.

This next phase of the Initiative to Reduce Avoidable Hospitalizations among Nursing Facility Residents seeks to reduce avoidable hospitalizationsamong beneficiaries eligible for Medicare and/or Medicaid by providing new payments to practitioners for engagement in