Washington Healthcare Update

August 14, 2017

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This Week: Congress in recess but the HHS OIG, HRSA and the FDA continue to makeannouncements.

Because Congress will be out for August recess, the next newsletterwill be August 28. Happy August!

1. Congress


2. Administration

3. Regulations Open for Comment

1. Congress


Senate Democrats Urge CMS to Drop Rule Concerning SNFs and Arbitration

Thirty-one Democratic senators have written CMS Administrator Seema Vermaurging her to drop a proposed rule that would require prospective patientsof federally funded nursing homes to sign an arbitration agreement as acondition to being admitted. The agreements prohibit patients or theirfamilies from taking facilities to court, requiring them to instead appealto an arbitration tribunal. Critics say many residents are not aware theysigned away their right to sue until they actually try to file charges.

“Forced arbitration clauses… prevent many of our country’s most vulnerableindividuals from seeking justice in a court of law, and instead funnel alltypes of legal claims, no matter how egregious, into a privatized disputeresolution system that is often biased toward the nursing home,” thesenators, led by Sens. Al Franken (D-MN) and Ron Wyden (D-OR), wrote onAug. 7.

Last October, the Obama administration banned any nursing home thatreceives federal dollars from requiring prospective tenants to sign anarbitration agreement.

To read the full letter,click here.

Senate Democrats Express Frustration Over Tobacco Deeming Rule

On Aug. 4, thirteen Senate Democrats sent a letter to FDA CommissionerScott Gottlieb, chastising him for his decision to further delay thetobacco deeming rule and expressing concern that FDA may consider rollingback its regulation of premium cigars. The senators say that by delayingthe rule, which extends FDA’s regulatory authority to cigars and electronicnicotine delivery systems (ENDS), “FDA is failing in its commitment tosafeguard public health, especially for children.”

The letter was led by Sens. Patty Murray (D-WA), Jeff Merkley (D-OR) andDick Durbin (D-IL) and raises criticism similar to those raised by advocacygroups, arguing that delaying implementation of the deeming rule gives“e-cigarettes and cigar manufacturers—including flavored products—a freepass to stay on the market for years with minimal oversight andrestrictions. This is a step backwards and contradicts years of datademonstrating the danger these products pose to public health,” the lettersays.

The Democratic senators also point out that delaying the deeming rule willallow flavored products to stay on the market until 2022. The lawmakersargue that FDA already has enough evidence to prohibit flavored tobacco.

However, some members of Congress encouraged Gottlieb to further delay therule. House appropriators on May 25 asked Gottlieb to further delayenforcement of the rule, with Rep. Kevin Yoder (R-KS) saying that theTobacco Control Act (TCA) has had certain effects on the e-cigarette andvaping industry that Congress did not intend when it passed the TCA.

To read the letter,click here.

2. Administration

FDA to Increase Staff Inspecting International Mail

In a speech, FDA Commissioner Scott Gottlieb said the FDA will increasestaff at international mail facilities from 8 to 22 and double the numberof port agents assisting its Office of Criminal Investigations. Gottliebwill also add more laboratory analysts, may see “some additional limitedresources and authorities from Congress” and promised a full work plan onthe matter in the next month. The purpose of the increased staff is to stopillegal drugs like synthetic opioids and fentanyl from entering the UnitedStates.

To read the full speech,click here.

HHS OIG to Review Telehealth Medicare Reimbursement

HHS Office of Inspector General recently announced its first review ofMedicare payments for telehealth services. Telehealth services amounted toonly $17.6 million in Medicare reimbursement in 2015, but due to strictregulations surrounding telemedicine, the OIG could discover the misuse ofthose services.

Medicare only covers telehealth in federally defined rural healthprofessional shortage areas; only eight types of practitioners may delivertelehealth services to Medicare beneficiaries from a qualified distantsite; and CMS publishes a limited number of reimbursement codes for theseservices. Medicare beneficiaries are required to use an “interactive 2-waytelecommunications system (with real time audio and video)” and mustreceive telehealth services at an official originating site. Doctors can’tbe reimbursed by Medicare for telehealth services if requirements aren’tmet.

The Inspector General’s review will focus on claims for telehealth servicesprovided at distant sites that do not match up with claims from anoriginating site and intends to look into whether or not providers aresubmitting telehealth claims that don’t follow current reimbursement rules.

In a 2016 report to Congress, the Medicare Payment Advisory Commission(MedPAC) found that among the 175,000 Medicare telehealth claims fromdistant sites in 2014, 55 percent were without a corresponding originatingsite claim. MedPAC determined that this discrepancy “could be due toproviders not bothering to bill for the $25 facility fee, or it could bethat some services inappropriately originated from a patient’s home.”

Although there are at least four different pieces of legislation that couldexpand Medicare coverage of telehealth services currently pending onCapitol Hill, Congressional Budget Office scoring and concerns about costcould hold back such legislation. Many Medicaid programs include telehealthcoverage and 34 of 50 states require telehealth parity under privateinsurance.

If the OIG finds significant evidence of improper claims, those findingscould significantly impact telemedicine reimbursement and potentialexpansion of telemedicine.

To view the announcement by the HHS OIG,click here.

HRSA Transitions to New 340B Registration System

On Aug. 9, the Health Resources and Services Administration (HRSA)announced a temporary closure of the 340B Office of Pharmacy AffairsInformation System (OPAIS) from Aug. 15 until the middle of September asthe office transitions to a new registration system. Previously, KristaPedley, director of HRSA’s Office of Pharmacy Affairs, said the new systemwill include a 340B price ceiling verification system. HRSA is required toprovide ceiling prices “as calculated and verified by the Secretary” forhospitals and those who receive the 340B drug discounts that HRSA protect“privileged pricing data” as a part of the ACA.

As a part of the HRSA’s FY 2019 budget request, the House AppropriationsCommittee FY 2018 HHS report asked for an update on the system regardingconcerns with ceiling prices.

3. Regulations Open for Comment

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.

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 theMcGuireWoods 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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