Washington Healthcare Update

August 20, 2018

Pardon Our Dust

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This Week: The House is in congressional work period. The Senate took a break and returned August 15 to work on appropriations and nominations.

1. Congress



2. Administration

3. Courts

4. Reports

1. Congress


Bipartisan Letter on Use of Prior Authorization

Reps. Phil Roe (R-TN) and Ami Bera (D-CA) are asking colleagues to join them on a letter requesting that CMS Administrator Seema Verma inform Medicare Advantage plans they can’t use prior authorization to inhibit access to services. A number of organizations are concerned that the effect of prior authorization will be to limit care. CMS on Aug. 7 announced that next year Medicare Advantage plans for the first time will be allowed to make beneficiaries use step therapy for doctor-administered drugs.


Senate Starts Debate on Appropriations Bill

The Senate began debating the combined appropriations bill covering the departments of Defense, Education, Labor and Health. Debate is expected to go through next week with hundreds of amendments likely to be filed.

2. Administration

FDA Warns of Opioids Intended for Pets Being Stolen

The Food and Drug Administration warned that some pet owners could be stealing pain medications intended for animals. FDA Commissioner Scott Gottlieb said the agency has a resource guide for veterinarians because there is little information on the misuse of opioids intended for animals.

CMS Proposed Significant Changes in ACOs

On Aug. 9, CMS proposed an overhaul of the Medicare Shared Savings Program Accountable Care Organizations, including a plan to give new ACOs only two years before they must start sharing both savings and losses with CMS. CMS wants to work with ACOs that are serious, and can no longer afford to continue a program that loses money for taxpayers, according to CMS Administrator Seema Verma. 

ACOS raised concerns, calling the proposal a misguided plan that will wreak havoc and cause many ACOs to quit the program. The American Hospital Association criticized the agency’s plan to drastically shorten the time ACOs have before they must take on risk.

CMS expects the planned overhaul to lead to 109 fewer ACOs in the program at the end of 10 years and says that is mostly because the program will be less attractive to new ACOs.

The rule proposes to redesign the Medicare Shared Savings ACO program by offering two tracks starting next July: the basic track and the enhanced track. CMS also wants to move to five-year participation agreements rather than three-year agreements. The basic track would allow ACOs to begin under a one-sided risk model, where they share savings with CMS but don’t owe CMS money if certain goals aren’t met, and incrementally phase in higher levels of risk. That glide path would allow new ACOs to share only the savings with CMS for two years, rather than the six years currently available to ACOs, before they must take on risk. After that, CMS says the basic track would have three levels of progressively higher risk and potential rewards. Under the one-sided model, ACOs would be able to share in at most 25 percent of savings, after they meet minimum savings rates, but by the end of the glide path they would be eligible for a 50 percent shared savings rate and would take on enough risk to qualify as an alternative pay model under the Quality Payment Program.

ACOs in the basic track would take on more risk every year unless they decide to move more quickly. By the end of the basic track glide path, ACOs would have the same level of risk and reward being tested in the ACO Track 1+ model.

Under the proposal, ACOs that have already participated in Track 1 of the current program would only be allowed to continue without taking on risk for one year in the revamped basic track.

To ease the transition, CMS says it will start new ACO agreements in July 2019 rather than January of next year. ACOs currently in the program would have an option to extend their participation agreement through the end of next June. The usual application cycle will pick up again in January 2020, CMS says. That means providers would have an extra six months where they do not have to take on risk—an arrangement not offered in later years.

The proposed rule says CMS would keep the current Track 3 for ACOs and rename it the enhanced track.

3. Courts

Beneficiary Groups File Lawsuit Challenging Arkansas’s Medicaid Work Requirements

Advocacy groups filed a lawsuit on Aug. 14 challenging CMS’s decision to allow Arkansas to impose work requirements on Medicaid recipients. The lawsuit, filed against the U.S. Department of Health and Human Services in federal court in Washington on behalf of three Medicaid recipients in the state, claims that the federal Medicaid law does not allow the administration to approve work requirements. Specifically it contends that the administration’s approval of the state’s plan is unconstitutional, violates congressional power and undermines the basic purpose of the program, which was to serve as a safety net.

Oral Arguments Set for Suit Seeking to End Individual Mandate

Oral arguments have been scheduled for Sept. 10 in a Texas lawsuit seeking to strike the individual mandate as unconstitutional because there is no longer a penalty to collect.

4. Reports

Indian Health Service: Agency Facing Ongoing Challenges Filling Provider Vacancies
GAO-18-580: Published: Aug. 15, 2018. Publicly Released: Aug. 15, 2018.

This report examines: (1) IHS provider vacancies and challenges filling them; (2) strategies IHS has used to recruit and retain providers; and (3) strategies IHS has used to mitigate the negative effects of provider vacancies. GAO reviewed IHS human resources data for the provider positions that the agency tracks. GAO also reviewed policies, federal internal control standards and legal authorities related to providers in federally operated IHS facilities. GAO interviewed IHS officials at the headquarters and area levels and at selected facilities. GAO selected facilities based on variation in their number of direct care outpatient visits and inpatient hospital beds in 2014.

The GAO recommends that IHS obtain, on an agencywide basis, information on temporary provider contractors, including their associated cost and number of full-time equivalents, and use this information to inform decisions about resource allocation and provider staffing.

Read the report.

Health Resources and Services Administration: Efforts to Help Ensure Health Center Compliance with Prohibitions on the Use of Federal Funds for Certain Abortions
GAO-18-508R: Published: Jul. 12, 2018. Publicly Released: Aug. 13, 2018.

The Health Resources and Services Administration (HRSA) is responsible for overseeing health centers—which receive grant funds from HRSA—including helping to ensure that no federal funds are used for prohibited abortions, in accordance with federal laws. Federal law prohibits the use of federal funds from HRSA for abortions, unless the pregnancy is the result of rape or incest, or the life of the pregnant woman would be endangered unless an abortion is performed. 

In carrying out its responsibility, HRSA emphasizes the restrictions on the use of federal funds for prohibited abortions in its funding opportunity notices and its notices of awards for health center grants. Additionally, according to agency officials, HRSA makes project officers and grant management specialists available to health centers for questions about unallowable costs or activities, including prohibited abortions. To oversee health centers’ compliance with restrictions on the use of federal funds for prohibited abortions, HRSA relies on health centers’ annual single audit reports conducted by independent auditors, which check that federal funds were not used for prohibited abortions, as well as financial management reviews it is starting to conduct, which check health centers’ policies and procedures regarding prohibited abortions. HRSA also relies on site visits, which, according to HRSA officials, generally happen in the middle of the project period—the period of time approved for a given health center grant—which is typically three years.

HRSA has also awarded funding to the National Association of Community Health Centers (NACHC) to provide training and technical assistance to health centers on topics such as leadership development and health center governance. HRSA obligated over $51.3 million to NACHC for this training and technical assistance between fiscal years 2010 and 2017. Although HRSA awarded federal funds to NACHC to provide training on topics such as leadership and governance, training to health centers on prohibited activities is conducted by HRSA. HRSA oversees NACHC’s performance under the cooperative agreement by, for example, reviewing required financial and progress reports. Like all organizations receiving federal funding from HRSA, NACHC may not use these funds for prohibited rel=”noopener noreferrer” abortions.

Read the report.

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

Stephanie Kennan, 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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