Washington Healthcare Update

May 7, 2018

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This Week: Payment rules proposed and concern over EU data rules.

1. Congress



2. Administration

3. Courts

1. Congress


Congressional Work Period


Congressional Work Period

2. Administration

SNF Payment Gets Proposed Overhaul

In the proposed SNF payment rule released April 27, CMS is proposing to dramatically change the way Medicare pays nursing homes so as to focus more on each resident’s particular needs and move away from volume-based reimbursements. The new payment model, called the Patient-Driven Model, would tie payments to patients’ conditions and simplify nursing homes’ reporting requirements, CMS said.

“Patients will have more opportunity to choose a skilled nursing facility that offers services tailored to their conditions and preferences, as the payment to nursing homes will be more based on the patient’s condition rather than the specific services provided by each skilled nursing facility,” CMS said in a press release.

CMS issued an Advanced Notice of Proposed Rulemaking in May 2017 outlining a pay model known as Resident Classification System, Version 1. The model released April 27 would take effect Oct. 1, 2019. CMS believes the model reflects substantial changes as a result of feedback from stakeholders.

The new proposed model would adjust Medicare payments based on each aspect of a resident’s care, most notably for Non-Therapy Ancillaries (NTAs), which are items and services not related to the provision of therapy such as drugs and medical supplies, thereby more accurately addressing costs associated with medically complex patients. It also would adjust per diem payments to nursing homes in response to varying costs during a patient’s stay.

The proposed rule also would adjust the SNF Value-based Purchasing Program, which provides incentive payments to nursing homes based on quality of care. The adjustments include changes to the scoring methodology and the addition of an extraordinary-circumstances exemption policy.

The proposed rule includes an inflationary increase in overall Medicare payments to nursing homes of 2.4 percent in the 2019 fiscal year, which represents $850 million in new spending. That amount was mandated by the Bipartisan Budget Act that Congress passed earlier this year. CMS will accept comments on the proposed rule through June 2.

See the fact sheet and link to the proposed rule.

CMS Proposes Change in IRF Quality Reporting Program

CMS is proposing to remove both the face-to-face requirement for rehabilitation physician visits and the Functional Independence Measure instrument, as well as to increase inpatient rehabilitation facilities’ net pay by 0.9 percent compared to fiscal year 2018. In its proposed rule for fiscal year 2019, CMS also proposes to eliminate two measures—Methicillin Resistant Staph Aureus Infection and seasonal flu vaccinations—from the IRF quality reporting program starting Oct. 1 of this year.

CMS says many of the proposed changes respond to suggestions from stakeholders on how to reduce the regulatory burden on IRFs. Specifically, the agency proposes to let the rehabilitation physician lead the interdisciplinary team meeting remotely without any additional documentation requirements, and to remove the admission order documentation requirement in an effort to reduce duplicative requirements.

CMS also proposes to remove the Functional Independence Measure (FIM) instrument and associated function modifiers from the IRF patient assessment instrument and proposes changes to the case mix classification system.

Hospice Reimbursement Increase Proposed

CMS on April 27 proposed to increase hospice pay by 1.8 percent in fiscal 2019, and also took steps to implement a congressional requirement that physician assistants be recognized as attending physicians for hospice beneficiaries.

The Bipartisan Budget Act of 2018 requires that, effective Jan. 1, 2019, physician assistants be recognized as attending physicians for Medicare hospice beneficiaries. “This statutory change expands the definition of attending physician to include physician assistants in addition to physicians and nurse practitioners.”

The proposed rule also updates the quality reporting program for hospices, including a review of quality measures using the meaningful measures framework, and proposes updates to the public reporting of these measures on Hospice Compare.

CMS Proposes Eliminating Eight IPF Quality Measure Reporting

In a proposed rule on April 27, CMS proposed eliminating eight inpatient psychiatric facility (IPF) quality reporting measures starting in fiscal 2020. The rule also projects that payments for the facilities will increase by 0.98 percent, or $50 million, in fiscal 2019, and asks stakeholders to weigh in on the differences in inpatient psychiatric facility costs, patient mix and provision of drugs and laboratory services to help CMS better refine the payment calculations.

By removing the eight reporting measures CMS is scaling back the amount of data that psychiatric facilities will have to report under the inpatient psychiatric facility quality reporting program set up by the Affordable Care Act.

The reporting measures removed would be: influenza vaccination coverage among health care personnel (CMS says the costs associated with the measure outweigh the benefits of reporting); alcohol use screening (costs outweigh benefits); tobacco use screening (costs outweigh benefits); hours of physical restraint use (“measure performance among IPFs is so high and unvarying that meaningful distinctions and improvements in performance can no longer be made,” CMS says); hours of seclusion use (same reason it removed physical restraint measure); tobacco use treatment provided or offered at discharge and tobacco use treatment at discharge (costs outweigh benefits); use of an electronic health record (costs outweigh benefits); and assessment of patient experience (costs outweigh benefits).

For links to the proposed rules: 

Sharing Medical Records

In the SNF payment proposed rule, CMS is requesting information on promoting interoperability and electronic health care information exchange using interoperability as a conditions of participation. CMS Administrator Seema Verma also said this week that CMS wants to hear views on whether providers should be required to share medical records with patients in a universal electronic format.

“Specifically, CMS is requesting stakeholder feedback through an RFI on the possibility of revising Conditions of Participation related to interoperability as a way to increase electronic sharing of data by providers,” CMS states in a press release on the proposed pay rules. “This will inform next steps to advance this critical initiative.”

The information request says most hospitals have installed electronic health records, but there are still significant obstacles to exchanging electronic health information among the many providers who care for beneficiaries in separate settings.

Concern Over New EU Data Rules’ Impact on the U.S.

The HHS Secretary’s Advisory Committee on Human Research and Protections is urging Secretary Alex Azar to meet with his European counterparts to avoid adverse impacts on U.S.-based medical research from strict EU data rules taking effect May 25. Concerns include new EU requirements that will give patients and clinical trial subjects increased control over their personal information.

The HHS Advisory Committee warns the new EU data regulations could disrupt U.S.-based research, and says reaching a “workable” arrangement with European regulators “is of critical importance to the mission of the HHS.” The advisory group—which includes physicians, researchers and lawyers—laid out its concerns in an April 11 letter to Azar with an attached set of recommendations approved by the group on March 14.

At issue is the EU’s General Data Protection Regulation affecting the handling and processing of EU citizens’ personal information anywhere, including the United States. The EU rules also set a 72-hour reporting requirement for data breaches and would impose stiff penalties of 10 million euros or more, among other measures.

The advisory group’s letter focuses on two specific aspects of GDPR’s impact on U.S.-based research: “the ability to obtain, at the time personal data are collected, consent to future research uses and…the need for continued use of personal data to satisfy legal obligations following subjects’ withdrawal of consent for the processing of their data, such as those imposed by” FDA.

A U.S.-based clinical study could be subject to the GDPR if it uses digital technology, such as wearables, mobile phones, or other personal electronic devices, to track subjects’ heart rate, blood pressure, levels of physical activity, or other data points,” according to the advisory group.  The GDPR replaces the EU’s decades-old directive on data management by adopting a much broader view of the types of information covered by the regulations and the scope of activities addressed.

The group also warns HHS of the broad impacts of the EU GDPR not specifically addressed in its letter, such as compliance with the Health Insurance Portability and Accountability Act, which governs data security and privacy for the health care sector in the United States.

Gottlieb Talks Drug Rebates

FDA Commissioner Scott Gottlieb said in a speech May 3 that removing the safe harbor that prevents manufacturer rebates from being considered a kickback “could help restore some semblance of reality to the relationship between list and negotiated prices and thereby boost affordability and competition.”

His remarks at the Food and Drug Law Institute Annual Conference come ahead of major announcements on drug pricing expected next week from President Donald Trump and HHS.  Gottlieb has previously taken aim at the rebate system, calling out pharmacy benefits managers and drug companies for their roles in the process.

Gottlieb, in his talk, offered other clues about coming changes to the drug pricing system, saying that the framework HHS Secretary Alex Azar has developed will “dismantle” provisions that have shielded parts of the drug industry from more vigorous competition, including changes to the Medicare Part D system.

3. Courts

Maine Medicaid Expansion

Supporters of the Affordable Care Act’s Medicaid expansion are suing Maine Gov. Paul LePage to force him to expand Medicaid, accusing the Republican of ignoring a ballot initiative that ordered the state to join the coverage program.

LePage has refused to expand Medicaid nearly six months after 59 percent of the state’s voters approved it in a first-of-its-kind ballot measure. LePage has insisted he won’t adopt Medicaid expansion unless state lawmakers meet his conditions for funding the program.

The lawsuit against LePage was expected after the Maine Legislature’s recent session ended without a funding agreement. A LePage spokesperson didn’t immediately respond to a request for comment.

LePage, now in his last year in office, previously vetoed Medicaid expansion bills five times, prompting the state’s Obamacare supporters to organize the ballot initiative last year. Advocates are spearheading similar campaigns to get measures on the ballot this year in Idaho, Nebraska and Utah.

Under the Maine ballot initiative, roughly 80,000 low-income adults are supposed to qualify for Medicaid benefits starting July 2. The LePage administration skipped an early April deadline to formally notify the federal government it would expand Medicaid.

Democratic Attorneys General and the ACA Case

A group of 17 Democratic attorneys general asked a federal court in Texas to expedite a decision on whether the AGs can intervene in a lawsuit filed by 20 GOP-led states seeking to toss out the Affordable Care Act, stressing time is of the essence because the government is slated to weigh in June 7 on the request for a preliminary injunction to end enforcement of the ACA.

In the case against HHS and other federal agencies, filed in the Northern District of Texas in February, the 20 GOP-led states and two Texas residents argue the repeal of the ACA’s individual mandate effective in 2019 means the law itself is no longer constitutional. The Supreme Court ruled in 2012 that an individual cannot be compelled to purchase coverage under the Commerce Clause, but that the penalty is legal under Congress’ taxation authority. Therefore, once the penalty goes away in January 2019, the remaining parts of the ACA also must be thrown out, the states argue in the suit.

If the federal government decides against defending the ACA, then the Democratic AGs would play a pivotal role if allowed to join the case. The GOP-led states are required to respond to the AGs’ motion to intervene by April 30, and the AGs’ response to the states’ brief is due by May 14. In the motion filed Friday, April 27, the AGs instead offered to reply by May 7 and requested the court issue a ruling allowing them to intervene by May 15.

The plaintiffs’ lawyer told the attorneys general April 27 that the states object to an expedited ruling, according to court filings.

Becerra said, “Our coalition represents nearly half of the nation. If Texas believes in their position, then they should have nothing to fear from us presenting evidence in this case and having our voices heard. The stakes are high, and it is a foundational American principle that we should all have our day in court.”

The filings show that the AGs also spoke with government lawyers who took no position on the request for a quicker ruling. However, in separate filings, the government asked the court to extend its deadline to reply to the motion to intervene from May 17 to June 7, which is the same date the government is set to respond to the injunction request. The AGs objected to the request for an extension, and despite three days of phone conversations the two parties were unable to come to agreement, according to the filings.

Title X Lawsuits Filed

Two lawsuits were filed against the Trump administration over its changes to the Title X family planning program. The suits were filed in U.S. District Court in Washington, D.C.

In one lawsuit, three Planned Parenthood affiliates say the administration’s proposed changes contradict what Congress wanted in the Title X program, “violate the government’s own existing regulations, and threaten devastating, irreparable harms to the very patients Title X was meant to help.” A separate suit was filed by the National Family Planning & Reproductive Health Association, represented by the American Civil Liberties Union.

The lawsuits are the latest step in a growing feud between Title X clinics and their advocates and the GOP. Congressional Republicans have said they want to further limit Title X providers from talking about abortion—proposed changes that are not related to these lawsuits.

The administration said earlier this spring that the latest round of Title X funding—applications for which are due later this month—would not require providers to support all FDA-approved forms of contraception and would be open to facilities that encourage natural family planning. The Planned Parenthood lawsuit alleges HHS is now putting “ ‘meaningful emphasis’ on abstinence as an approach to birth control (even for adults), providing onsite primary care, and cooperating with faith-based organizations.”

Final decisions on funding this year will be made by Valerie Huber, a Trump administration official who has a long record of promoting abstinence, instead of a group of HHS officials, as the department did in prior years.

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

StephanieKennan, Senior Vice President

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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