Washington Healthcare Update

July 31, 2017

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This Week: All eyes on the Senate as efforts to repeal the ACA fail.

1. Congress



2. States

3. Administration

4. Regulations Open for Comment

5. Reports

1. Congress


House Budget Resolution Vote Likely in September

On July 27, House Republicans announced a deal has been struck betweenRepublican Study Committee Chairman Mark Walker (R-AL) and House SpeakerPaul Ryan (R-WI) for a vote on the House budget resolution in exchange foran omnibus package prior to the August recess. The budget resolution, anintegral part of tax reform, will be voted on the first week in September,when Congress returns from its recess, based on a commitment Walkerreceived from the Speaker.

Walker, in return, withdrew his minibus amendment, which would haverequired votes on all 12 spending bills. Further, Walker stated he wouldnot push the trillion-dollar FY 2018 budget, rather than the Speaker’s planto move the four-bill package. The budget resolution passed the HouseBudget Committee last week by a vote 22-14 along party lines.

To view the House budget resolution,click here.

To view the four-bill package,click here.

House Passes Medicare Part B Improvement Act

On July 25, the House passed the Medicare Part B Improvement Act, H.R.3178, by voice vote. The bill was introduced by House Ways and MeansChairman Kevin Brady (R-TX) and Ranking Member Richard Neal (D-MA) andwould:

  • Create a transitional home infusion payment system until a new payment for services associated with home infusion is implemented in 2021;
  • Extend the Medicare Patient IVIG Access Demonstration;
  • Include orthotists’ and prosthetists’ clinical notes in the medical record of beneficiaries to make it easier to show medical necessity for prosthetics and orthotics;
  • Allow for independent accreditation for dialysis facilities;
  • Expand access to home dialysis by allowing for more use of telehealth; and
  • Make changes to the Stark Rule that are meant to modernize that policy.

The Congressional Budget Office said the legislation would reduce directspending by $4 million between 2018 and 2027.

To view the bill,click here.

Menu Labeling Bill Moves to Floor

On July 27, the House Energy and Commerce Committee passed the MenuLabeling bill by a vote of 39-14. The bill is sponsored by House RepublicanConference Chairwoman Cathy McMorris Rodgers (R-WA) and attempts to modifya mandate that requires menu labeling on a federal level. The mandaterequires that grocery stores, chain restaurants and other prepared fooddistributors with 20 or more locations post calorie content. Last Congress,the bill passed the floor, however the Senate companion bill has not madeas much movement.

In May, the FDA said it would not implement the rule for a year in anattempt to come off as more business friendly. While health advocatescriticized the delay, many small business groups praised time to acclimate.

To view the bill,click here.


Repeal and Replace Efforts Fail

Early in the morning of July 28, Senate Republicans had to declare defeatas their latest reiteration of repealing the Affordable Care Act failed topass. Three Republican senators voted against what was known as the“skinny” repeal bill: Sens. Collins (ME), Murkowski (AK) and McCain (AZ).

The skinny bill came after a string of stumbling blocks and failed votes onother proposals. Before the debate began on Tues., July 25, the Senateparliamentarian ruled that a number of crucial provisions in the SenateRepublican bill did not pass the Byrd Rule, a rule that requires theprovision impact federal spending. The Senate considered straight repeal,repeal in two years, single payer, an amendment by Sen. Cruz (R-TX) topermit plans that did not meet ACA requirements, various amendments relatedto Medicaid and multiple motions to recommit the bill to committees ofjurisdiction for further consideration. At one point, Senate MinorityLeader Charles Schumer (D-NY) announced that Democrats would no longeroffer amendments because they did not know the underlying bill that was tobe amended.

The skinny bill was developed somewhat hastily and evolved over Thurs.,July 27, as the hours of debate began to dwindle down. The skinny repealbill would have eliminated the ACA’s requirement for individuals to haveinsurance and repealed the employer mandate for eight years. It alsodefunded Planned Parenthood for one year, temporarily eliminated themedical device tax, and expanded Section 1332 waivers so states coulddevelop their own health systems and increase contribution limits to healthsavings accounts for three years. The Congressional Budget Office hasestimated that scrapping the individual mandate would lead to a 20 percentincrease in premiums and 15 million more uninsured Americans.

The controversy over the skinny bill among Republicans was a concern thatthe House would take that bill, if passed by the Senate and pass it insteadof having a House-Senate conference to work out a proposal between the twobodies.

In the end, the skinny version collapsed. Most likely, the House and Senatewill pivot to tax reform. Concerns have been raised about whether theAdministration will continue the cost-sharing reduction payments. Endingthose payments would create havoc in the exchanges.

Whether efforts will be made to make changes to the ACA on other healthcare legislation that has to pass this year is not known. Stay tuned.

To view the failed “skinny” repeal bill,click here.

Sen. McCaskill Continues Investigation into Causes ofthe Opioid Epidemic

On July 26, Sen. Claire McCaskill (D-MO) sent letters to several opioidmanufacturers and distributors in an effort to gather information on theirefforts to oversee the distribution of opioids for illicit purposes. Thisrequest follows an appeal the Missouri senator made to the JusticeDepartment for their investigation into DEA’s ability to hold drugdistributors accountable for opioid diversion. The chairwoman of theSenate’s Homeland Security and Governmental Affairs Committee has begunthis investigation into business practices of the country’s five largestmanufacturers.

The letters released this week specifically ask manufacturers forsuspicious order notifications that stem out of her home state of Missouri.Further, the chairwoman is seeking details of efforts to audit pharmaciesand details of opioid shipments to pharmacies.

To read the letters and learn more on the opioid investigation,click here.

2. States

Nevada: Aetna Will Not Sell Plans on the Exchange in 2018

Aetna originally intended to sell individual plans in two counties inNevada, but only because it was required to participate in the exchangethere under terms of its Medicaid contract. However, Aetna attracted just1,600 Medicaid beneficiaries this year, and an agreement has been reachedto terminate the contract at the end of August, according to a companyspokesman.

This means Aetna will not compete in any Obamacare marketplaces next year.

Nevada currently has 14 counties where no insurer has agreed to sellindividual plans for next year, but Aetna’s decision to drop out will notadd to the count of “bare” counties. Centene has announced that it’sentering the Nevada market for 2018, but hasn’t provided details on exactlywhere it will compete.

3. Administration

HHS Issues Revised Web Tool on Data Breaches

The Department for Health and Human Services (HHS) Office for Civil Rights(OCR) has released a newly renovated tool to help identify breaches, knownas the HHS OCR breach portal or HIPAA Breach Reporting Tool (HBRT). Thetool empowers the health care industry to find information on breaches andgives companies the ability to report breaches more easily. The tool wasoriginally released in 2009, mandated by the Health Information Technologyfor Economic and Clinical Health Act (HITECH Act). The tool providesinformation on the name of the entity covered, the state, the coveredentity type, the amount of individuals affected, the breach submissionsdate, the type of breach and the location of the breach. Overall, theportal is designed to provide individuals with information to betteridentify health information breaches.

To view the newly revamped breach portal,click here.

4. Regulations Open for Comment 

CMS Issues Proposed Revision Requirements for Long-Term CareFacilities’ Arbitration Agreements

On June 5, CMS issued proposed revisions to arbitration agreementrequirements for long-term care facilities. The proposed revisions wouldhelp strengthen transparency in the arbitration process, reduce unnecessaryprovider burden and support residents’ rights to make informed decisionsabout important aspects of their health care.

The Reform of Requirements for Long-Term Care Facilities Final Rule,published on Oct. 4, 2016, listed the requirements facilities need tofollow if they choose to ask residents to sign agreements for bindingarbitration. The final rule also prohibited predispute agreements forbinding arbitration. The American Health Care Association and a group ofnursing homes sued for preliminary and permanent injunction to stop CMSfrom enforcing that requirement. The court granted a preliminary injunctionon Nov. 7, 2016. After that decision, CMS reviewed and reconsidered thearbitration requirements in the 2016 Final Rule.

The proposed rule focuses on the transparency surrounding the arbitrationprocess and includes the following proposals:

  • The prohibition on predispute binding arbitration agreements is removed.
  • All agreements for binding arbitration must be in plain language.
  • If signing the agreement for binding arbitration is a condition of admission into the facility, the language of the agreement must be in plain writing and in the admissions contract.
  • The agreement must be explained to the resident and his or her representative in a form and manner they understand, including that it must be in a language they understand.
  • The resident must acknowledge that he or she understands the agreement.
  • The agreement must not contain any language that prohibits or discourages the resident or anyone else from communicating with federal, state or local officials, including federal and state surveyors, other federal or state health department employees, or representatives of the State Long-Term Care Ombudsman.
  • If a facility resolves a dispute with a resident through arbitration, it must retain a copy of the signed agreement for binding arbitration and the arbitrator’s final decision so it can be inspected by CMS or its designee.
  • The facility must post a notice regarding its use of binding arbitration in an area that is visible to both residents and visitors.

This proposed rule is scheduled to be published in the Federal Register on June 8, 2017, and comments are due by Aug. 7,2017. For more information,click here.

CMS Proposes MACRA Rule

On June 19, CMS issued aproposed rulethat would make changes in the second year of the Quality Payment Programas required by the Medicare Access and CHIP Reauthorization Act of 2015(MACRA).

The 1,058-page rule continues the “pick-your-pace” option in year two ofthe program, letting doctors report a limited amount of quality data to beexempted from Medicare’s penalties.

CMS creates a “virtual group” reporting option, allowing doctors to poolthe information on how they care for patients and be subjected toMedicare’s quality payment scheme.

CMS is also increasing the minimum number of patients doctors can treatbefore being subject to the program’s Merit-based Incentive Payment System.It establishes more flexibility for doctors who see limited numbers ofpatients face to face or in a hospital. For 2017, roughly 800,000clinicians were exempt from the MIPS program.

CMS will not require doctors to use 2015 certified EHRs next year, as ithad ordered during the Obama administration. However, clinicians areoffered bonuses for using new versions of the software. Medicare also willdelay for another year judging doctors for how much they spend for treatingpatients.

Comments on the rule are due no later than 5 p.m. on Aug. 21, 2017. For afact sheet on the proposed rule,click here.

CMS Proposes 2018 Policy and Payment Rate Changes for End-Stage RenalDisease Facilities

On June 29, the Centers for Medicare & Medicaid Services (CMS) issued aproposed rule that would update payment policies for the End-Stage RenalDisease (ESRD) Prospective Payment System (PPS). The rule covers paymentrates for renal dialysis services, including updates to acute kidney injury(AKI), furnished to beneficiaries on or after Jan. 1, 2018.

The ESRD Quality Incentive Program (QIP) proposed changes are for paymentyears 2019, 2020 and 2021, and a number of key dialysis data methodologiesand quality measures. The proposed rule also requests comment on how toinclude individuals with acute kidney injury in the ESRD QualityImprovement Program.

In addition to the proposed rule, CMS is releasing a request forinformation to welcome continued feedback on the Medicare program. CMS iscommitted to maintaining flexibility and efficiency throughout Medicare.Through transparency, flexibility, program simplification and innovation,CMS aims to transform the Medicare program and promote the availability ofhigh-value and efficiently provided care for its beneficiaries.

Comments are due no later than 5 p.m. on Aug. 28, 2017.

For a fact sheet on the proposed rule, please clickhere.

For the ESRD proposed rule (CMS 1674-P), please click here.

CMS Proposes 2018 Policy and Rate Changes for Hospital Outpatient,Ambulatory Surgical Center Payment Systems

The Centers for Medicare & Medicaid Services (CMS) on July 13, issued aproposed rule that updates payment rates and policy changes in the HospitalOutpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center(ASC) Payment System.

Among the provisions in this rule, CMS is proposing to change the paymentrate for certain Medicare Part B drugs purchased by hospitals through the340B program. The proposed rule also requests comment on how CMS can bestimplement the proposal to pass savings on to beneficiaries and providers,and to allow seniors to save money on their drug costs. The 340B DrugPricing Program allows certain hospitals and other health care providers topurchase drugs and biologicals (other than vaccines) that are administeredin a hospital outpatient department from drug manufacturers at discountedprices.

The proposed rule also includes a provision to address rural hospitalsrecruiting physicians by placing a two-year moratorium on the directsupervision requirement currently in place at rural hospitals and criticalaccess hospitals.

In addition, CMS is releasing within the proposed rule a request forinformation to welcome continued feedback on flexibilities and efficienciesin the Medicare program.

Comments are due 5 p.m. Sept. 11, 2017.

To view a fact sheet on the proposed rule,click here.

To view the proposed rule, click here.

CMS Proposes 2018 Payment and Policy Updates for the Physician FeeSchedule

The Centers for Medicare & Medicaid Services (CMS) on July 13 issued aproposed rule that would update Medicare payment and policies for doctorsand other clinicians who treat Medicare patients in calendar year (CY)2018. This proposed rule seeks public comment on reducing administrativeburdens for providing patient care, including visits, care management andtelehealth services. The rule takes steps to better align incentives andprovide clinicians with a smoother transition to the new Merit-basedIncentive Payment System under the Quality Payment Program (QPP). The rulealso attempts to encourage fairer competition between hospitals andphysician practices by promoting greater payment alignment, and it wouldimprove the payment for office-based behavioral health services that areoften the therapy and counseling services used to treat opioid addictionand other substance use disorders. In addition, the proposed rule makesadditional proposals to implement the Center for Medicare & MedicaidInnovation’s Medicare Diabetes Prevention Program expanded model startingin 2018.

In addition to the proposed rule, CMS is releasing a request forinformation to welcome continued feedback on the Medicare program. CMS iscommitted to maintaining flexibility and efficiency throughout Medicare.Through transparency, flexibility, program simplification and innovation,CMS aims to transform the Medicare program and promote the availability ofhigh-value and efficiently provided care for its beneficiaries. This willinform the discussion on future regulatory action related to the PhysicianFee Schedule. Comments are due by 5 p.m. on Sept. 11, 2017.

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

To view the proposed rule,click here.

CMS Proposes 2018 and 2019 Payment Changes for Medicare Home HealthAgencies

The Centers for Medicare & Medicaid Services (CMS) on July 25 issued aproposed rule that would update payment rates and the wage index for homehealth agencies (HHAs) serving Medicare beneficiaries in 2018; it alsoproposes a redesign of the payment system in 2019. Comments are due Sept.25, 2017.

CMS is planning a slight pay cut for home health agencies in 2018, byreducing Medicare payments to the agencies by 0.4 percent next year, savingthe federal government an estimated $80 million. That change is driven inpart by CMS’s planned phase out of a provision boosting pay rates forcertain home health services delivered to rural patients. The agency isalso floating a series of changes to the payment methodology beginning in2019, which could result in a pay cut of up to 4.3 percent. That wouldtranslate to as much as $950 million in reduced Medicare payments to homehealth agencies.

Under the proposed rule, the home health payment update percentage for HHAsthat submit the required quality data for the Home Health Quality ReportingProgram would be 1 percent in 2018. The proposed rule also includesproposals to refine the HH PPS case-mix adjustment methodology, including achange in the unit of payment from 60-day episodes of care to 30-dayperiods of care, to be implemented for periods of care beginning on orafter Jan. 1, 2019. Additionally, the proposed rule includes proposals forthe Home Health Value-Based Purchasing Model and the Home Health QualityReporting Program.

To view the proposed rule,click here.

For more information on the Home Health Prospective Payment System,click here.

5. Reports

Air Ambulance: Data Collection and Transparency Needed to Enhance DOT Oversight

The GAO released a report on July 27 on Air Ambulance: Data Collection andTransparency Needed to Enhance DOTS Oversight. The report found thatbetween 2010 and 2014 the median prices providers charged for helicopterair ambulance service approximately doubled, from around $15,000 to about$30,000 per transport, according to Medicare data from the Centers forMedicare & Medicaid Services (CMS) and private health insurance data.Air ambulance providers do not turn away patients based on their ability topay and receive payments from many sources, depending on the patient’scoverage, often at rates lower than the price charged. For example, theMedicare median payment was $6,502 per transport in 2014. Air ambulanceproviders might bill a privately insured patient for the difference betweenthe price charged and the insurance payment—a practice called balancebilling—when the provider lacks an in-network contract with the insurer.However, due to a lack of information it is unclear to what extent patientsare balance billed.

Actions proposed by stakeholders included (1) raising Medicare rates, (2)allowing state-level regulation of air ambulance prices and (3) improvingdata collection for the purposes of investigations and transparencyregarding prices. Stakeholders expressed mixed views on the first twoproposals but none disagreed with the third. Federal internal controlstandards state that management should identify and communicate informationneeded to achieve objectives and address risks. The Department ofTransportation (DOT) has discretionary authority to investigate potentiallyunfair practices in air transportation or the sale of air transportation,but has not exercised this authority in regard to helicopter airambulances. Although DOT recently modified its online form to include airambulance complaints, it has not communicated how to file complaints.Without doing so and obtaining more industry data, DOT is missing importantinformation needed to put complaints into the context of the overallindustry that could affect its assessment on whether to pursueinvestigations. Further, stakeholders such as hospital staff could benefitfrom greater transparency, as they currently have limited ability to makeair ambulance decisions that serve both the financial interests and medicalneeds of the patient.

To view the report,click here.

If you have any questions, contact the following individuals atMcGuireWoods Consulting:

StephanieKennan, Senior Vice President
Anne Starke,Research Associate

Founded in 1998, McGuireWoods Consulting LLC(MWC) is a full-service public affairs firm offering infrastructure andeconomic development, strategic communications & grassroots, and governmentrelations services. McGuireWoods Consulting is a subsidiary of the McGuireWoods LLPlaw firm and has been named in The National Law Journal’s special annualreport, “The Influence 50,” for the past several years. In the most recentreport, McGuireWoods Consulting was ranked 15th of the 1,900 governmentrelations firms in Washington, D.C.

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