Health Care Week in Review October 30, 2015

A&B Healthcare Week in Review, October 30, 2015

Healthcare Week in Review


  • On October 29, 2015, the Centers for Medicare and Medicaid Services (CMS) released a final rule with comment period entitled “Methods for Assuring Access to Covered Medicaid Services”. According to the CMS summary, the final rule with comment period “…provides for a transparent data-driven process for states to document whether Medicaid payments are sufficient to enlist providers to assure beneficiary access to covered care and services consistent with section 1902(a)(30)(A) of the Social Security Act (the Act) and to address issues raised by that process. The final rule with comment period also recognizes electronic publication as an optional means of providing public notice of proposed changes in rates or rate setting methodologies that the state intends to include in a Medicaid state plan amendment (SPA). We are providing an opportunity for comment on whether future adjustments would be warranted to the provisions setting forth requirements for ongoing state reviews of beneficiary access.” The rule is expected to be published in the Federal Register on November 2nd. The regulations will be effective 60 days after publication; comments will be due 60 days after publication.
  • On October 29, 2015, CMS released a final rule entitled “CY 2016 Home Health Prospective Payment System Rate Update; Home Health Value-Based Purchasing Model; and Home Health Quality Reporting Requirements”. This final rule will update Home Health Prospective Payment System (HH PPS) rates, including the national, standardized 60-day episode payment rates, the national per-visit rates, and the non-routine medical supply (NRS) conversion factor under the Medicare prospective payment system for home health agencies (HHAs), effective for episodes ending on or after January 1, 2016. As required by the Affordable Care Act, this rule implements the 3rd year of the 4-year phase-in of the rebasing adjustments to the HH PPS payment rates. This rule updates the HH PPS case-mix weights using the most current, complete data available at the time of rulemaking and provides a clarification regarding the use of the “initial encounter” seventh character applicable to certain ICD-10-CM code categories. This final rule will also finalize reductions to the national, standardized 60-day episode payment rate in CY 2016, CY 2017, and CY 2018 of 0.97 percent in each year to account for estimated case-mix growth unrelated to increases in patient acuity (nominal case-mix growth) between CY 2012 and CY 2014. In addition, this rule implements a HH value-based purchasing (HHVBP) model, beginning January 1, 2016, in which all Medicare-certified HHAs in selected states will be required to participate. The rule is expected to be published in the Federal Register on November 5th. The regulations are effective on January 1, 2016. A CMS fact sheet on the regulation may be found here.
  • On October 29, 2015, CMS released a final rule entitled “End-Stage Renal Disease Prospective Payment System, and Quality Incentive Program”. This rule updates and makes revisions to the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) for calendar year (CY) 2016. This rule is necessary to ensure that ESRD facilities receive accurate Medicare payment amounts for furnishing outpatient maintenance dialysis treatments during calendar year 2016. This rule will also set forth requirements for the ESRD Quality Incentive Program (QIP), including for PYs 2017 through 2019. The rule is expected to be published in the Federal Register on November 6th. These regulations are effective on January 1, 2016. A CMS fact sheet on the regulation may be found here.
  • On October 29, 2015, CMS released a request for information entitled “Medicaid Program: Request for Information: Data Metrics and Alternative Processes for Access to Care in the Medicaid Program”. In this request for information (RFI), CMS seeks public input to inform the potential development of standards with regard to Medicaid beneficiaries’ access to covered services under the Medicaid program. Specifically, the agency is interested in obtaining information on core access to care measures and metrics that could be used to measure access to care for beneficiaries in the Medicaid program (including in fee-for-service and managed care delivery systems) and used to develop local, state and national thresholds and goals to inform and improve access in the program. CMS is also interested in feedback on approaches to using the metrics, which could include setting access goals and thresholds and formal processes for beneficiaries to raise access concerns. The regulation is expected to be published in the Federal Register on November 2nd; responses will be due 60 days thereafter.
  • On October 29, 2015, CMS released a proposed rule entitled “Medicare and Medicaid Programs: Revisions to Requirements for Discharge Planning for Hospitals, Critical Access Hospitals, and Home Health Agencies”. This proposed rule would revise the discharge planning requirements that Hospitals, including Long-Term Care Hospitals and Inpatient Rehabilitation Facilities, Critical Access Hospitals, and Home Health Agencies must meet in order to participate in the Medicare and Medicaid programs. The proposed rule would also implement the discharge planning requirements of the Improving Medicare Post-Acute Care Transformation Act of 2014. The rule is expected to be published in the Federal Register on November 3rd; comments will be due 60 days thereafter.
  • On October 30, 2015, CMS released a final rule with comment period entitled “Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Short Inpatient Hospital Stays; Transition for Certain Medicare-Dependent, Small Rural Hospitals under the Hospital Inpatient Prospective Payment System; Provider Administrative Appeals and Judicial Review”. The rule is expected to be published in the Federal Register on November 13th. This final rule with comment period revises the Medicare hospital outpatient prospective payment system (OPPS) and the Medicare ambulatory surgical center (ASC) payment system for CY 2016 to implement applicable statutory requirements and changes arising from our continuing experience with these systems. In this final rule with comment period, we describe the changes to the amounts and factors used to determine the payment rates for Medicare services paid under the OPPS and those paid under the ASC payment system. In addition, this final rule with comment period updates and refines the requirements for the Hospital Outpatient Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program. Further, this document includes certain finalized policies relating to the hospital inpatient prospective payment system: changes to the 2-midnight rule under the short inpatient hospital stay policy; and a payment transition for hospitals that lost their status as a Medicare-dependent, small rural hospital (MDH) because they are no longer in a rural area due to the implementation of the new Office of Management and Budget delineations in FY 2015 and have not reclassified from urban to rural before January 1, 2016. In addition, this document contains a final rule that finalizes certain 2015 proposals, and addresses public comments received, relating to the changes in the Medicare regulations governing provider administrative appeals and judicial review relating to appropriate claims in provider cost reports. Comments are due December 29th; the final rule is effective January 1, 2016. A CMS fact sheet on the regulation may be found here. A fact sheet on updates to the Two-Midnight rule may be found here.
  • On October 30, 2015, CMS released a final rule with comment period entitled “Medicare Program; Revisions to Payment Policies under the Physician Fee Schedule and Other Revisions to Part B for CY 2016”. This major final rule with comment period addresses changes to the physician fee schedule, and other Medicare Part B payment policies to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services, as well as changes in the statute. The provisions of this final rule with comment period are effective on January 1, 2016, except the definition of “ownership or investment interest” in §411.362(a), which has an effective date of January 1, 2017. The rule is expected to be published in the Federal Register on November 16th. Comments are due December 29th. A CMS fact sheet on the regulation may be found here.
  • On October 29, 2015, CMS released a final rule entitled “Final Waivers in Connection With the Shared Savings Program”. This final rule finalizes waivers of the application of the physician self-referral law, the Federal anti-kickback statute, and the civil monetary penalties (CMP) law provision relating to beneficiary inducements to specified arrangements involving accountable care organizations (ACOs) under section 1899 of the Social Security Act (the Act) (the “Shared Savings Program”), as set forth in the Interim Final Rule with comment period (IFC) dated November 2, 2011. As explained in greater detail in the rule, in light of legislative changes that occurred after publication of the IFC, this final rule does not finalize waivers of the application of the CMP law provision relating to “gainsharing” arrangements. Section 1899(f) of the Act, as added by the Affordable Care Act, authorizes the Secretary to waive certain fraud and abuse laws as necessary to carry out the provisions of section 1899 of the Act.
  • On October 29, 2015, the Veterans Affairs Department released a final rule entitled “Expanded Access to Non-VA Care Through the Veterans Choice Program”. This document amends the Department of Veterans Affairs (VA) medical regulations implementing section 101 of the Veterans Access, Choice, and Accountability Act of 2014, which directed VA to establish a program to furnish hospital care and medical services through eligible non-VA health care providers to eligible veterans who either cannot be seen within the wait-time goals of the Veterans Health Administration or who qualify based on their place of residence (hereafter referred to as the “Veterans Choice Program”, or the “Program”). VA published an interim final rule implementing the Veterans Choice Program on November 5, 2014, and published a subsequent interim final rule making further amendments on April 24, 2015. This final rule responds to public comments received from both interim final rules and amends the regulations to modify payment rates under the Program.
  • On October 29, 2015, the CMS Center for Consumer Information and Insurance Oversight (CCIIO) released a notice entitled “CMS Final Bulletin on Out-Of-Pocket (OOP) Cost Comparison Tool for the Federally-facilitated Marketplaces (FFMs)”. The OOP Cost Comparison Tool allows shoppers in the Federally-facilitated Marketplaces (FFMs) to see estimates of total spending (to include premiums and cost-sharing) across various health insurance plans. The purpose of this bulletin is to provide information on the OOP Cost Comparison Tool, how the tool computes OOP Cost, and how it is incorporated into the FFMs’ web sites. This comparison tool will be available to consumers on October 25, 2015 for the 2016 annual open enrollment period beginning November 1, 2015 (for coverage effective starting as soon as January 1, 2016).
  • On October 30, 2015, the Food and Drug Administration (FDA) announced the availability of a draft guidance for industry on progesterone gel entitled "Draft Guidance on Progesterone." The recommendations provide specific guidance on the design of bioequivalence (BE) studies to support abbreviated new drug applications (ANDAs) for progesterone gel. The document is expected to be published in the Federal Register on November 2nd; public comments will be due 60 days thereafter.
  • On October 30, 2015, the FDA announced that the agency is issuing a revised guidance document that extends the compliance policy described in the guidance for industry entitled “DSCSA Implementation: Product Tracing Requirements for Dispensers--Compliance Policy.” This revised guidance announces FDA’s intention with regard to enforcement of certain product tracing requirements of the Federal Food, Drug, and Cosmetic Act (FD&C Act) added by the Drug Supply Chain Security Act (DSCSA). FDA does not intend to take action against dispensers who, prior to March 1, 2016, accept ownership of product without receiving transaction information, transaction history, and transaction statements (product tracing information), prior to or at the time of a transaction, or do not capture and maintain the product tracing information, as required by the FD&C Act.
  • On October 28, 2015, FDA announced the availability of a guidance for industry and review staff entitled “Nonclinical Safety Evaluation of Reformulated Drug Products and Products Intended for Administration by an Alternate Route.” The guidance provides recommendations concerning the evaluation of the nonclinical safety of reformulated drug products or products being used by an alternate route. It is intended for use by interested individuals in industry and reviewers within the Center for Drug Evaluation and Research (CDER). The goals of this guidance are to foster and expedite the development of reformulated drug products or the use of previously approved drugs by alternate routes, communicate to industry current CDER thoughts pertaining to safety data needed to support these drug products, and increase uniformity within CDER on expectations for the nonclinical development of reformulated drug products or products being used by an alternate route. This guidance finalizes the draft guidance of the same name published on March 7, 2008.
  • On October 30, 2015, the Equal Employment Opportunity Commission (EEOC) released a proposed rule that would amend the regulations implementing Title II of the Genetic Information Nondiscrimination Act of 2008 as they relate to employer wellness programs. The proposed regulations address the extent to which an employer may offer an employee inducements for the employee’s spouse who is also a participant in the employer’s health plan to provide information about the spouse’s current or past health status as part of a health risk assessment administered in connection with the employer’s offer of health services as part of an employer-sponsored wellness program. Several technical changes to the existing regulation are also proposed. Public comments will be due December 29th.


U.S. Senate

  • On October 30, 2015, the Senate passed a two-year budget deal, the Bipartisan Budget Act of 2015 (H.R. 1314). The budget accord, passed by the House on October 28th, would lift separate caps on defense and non-defense spending in equal amounts in fiscal 2016 and fiscal 2017. For 2016, the caps would be raised by $25 billion in each category and in 2017 the caps would be lifted by $15 billion. Among other things, the legislation would reform the Disability Insurance program, prevent a pending increase in certain Medicare Part B premiums, provide and fully offset spending cap relief, and suspend the debt ceiling (until March 15, 2017). A House section-by-section summary may be found here. The deal was approved by a Senate vote of 64-35, with all 35 “no” votes being Republican. The President’s statement on the measure may be found here. “This agreement is a reminder that Washington can still choose to help, rather than hinder, America’s progress, and I look forward to signing it into law as soon as it reaches my desk,” it reads. A Congressional Budget Office (CBO) score of the bill may be found here.
  • On October 29, 2015, the Senate Health, Education, Labor and Pensions (HELP) Committee convened a hearing entitled “Mental Health and Substance Use Disorders in America: Priorities, Challenges, and Opportunities”. Witnesses for the hearing included Kana Enomoto, M.A., Acting Administrator, Substance Abuse and Mental Health Services Administration (SAMHSA); Jim Macrae, M.A., M.P.P., Acting Administrator, Health Resources and Services Administration (HRSA); and Tom Insel, M.D., Director, National Institute of Mental Health (NIMH) at the National Institutes of Health (NIH). During the hearing Chairman Lamar Alexander (R-TN) asserted that states have historically borne the primary responsibility for providing behavioral health services. The private sector, he noted, spent $67 billion was spent in 2009, while the federal and state governments spent $105 the same year. Alexander discussed the role of Medicaid and Medicare in supporting the national mental health infrastructure, and he expressed interest in learning how funding and spending can be better arranged to more effectively serve individuals with mental health needs. Alexander touted the Mental Health Awareness and Improvement Act (S. 1893), which he introduced with Ranking Member Patty Murray. The bill was passed by the HELP Committee October 1st, and has been placed on the Senate's legislative calendar for consideration. More information on the hearing may be found here.
  • On October 28, 2015, the Senate Veterans’ Affairs Committee convened a hearing entitled “VA Mental Health: Ensuring Access to Care”. More information on the hearing may be found here.

House of Representatives

  • On Monday October 26th, the House Energy & Commerce Committee announced that it would reschedule the Thursday October 29th hearing entitled “Examining Regulation of Diagnostic Tests and Laboratory Operations”. The hearing will now be held November 17, 2015, at 2 p.m., in room 2123 of the Rayburn House Office Building. According to the Committee announcement, “The subcommittee seeks to build upon the thoughtful dialogue achieved throughout the 21st Century Cures process, especially the feedback received in response to the committee’s white paper on A Modernized Framework for Innovative Diagnostic Tests. The hearing will provide members an opportunity to hear directly from officials at FDA and CMS about each agency’s respective responsibilities and areas of expertise in the regulation of diagnostic tests, as well as what their roles should entail going forward.”
  • On October 27, 2015, the House Veterans’ Affairs Committee, in conjunction with the House Oversight and Government Reform Committee, convened a hearing entitled “VA and DOD IT: Electronic Health Records Interoperability”. More information on the hearing may be found here.


  • On October 28, 2015, the Department of Health and Human Services (HHS) released a report entitled “Consumer Decisions Regarding Health Plan Choices in the 2014 and 2015 Marketplaces”. This report examines consumer plan choices during the second year of enrollment through the Marketplaces (the 2015 plan year) for those consumers who had selected a Marketplace plan at any time in 2014 in states using the platform during 2014 and 2015. In the report, HHS specifically focuses on how consumers responded to premium differences among health plans in their area, net of any advance payments of the premium tax credit (APTC) for which the consumer was determined eligible for in 2015, when selecting a 2015 plan.
  • On October 29, 2015, the Health Care Cost Institute released a report, the 2014 Health Care Cost and Utilization Report, which analyzes the health care spending trends for Americans younger than age 65 and covered by employer sponsored insurance (ESI) for the years 2010 through 2014, and provides a detailed look at components of health care cost growth for 2014. Over the five year study period, per capita spending growth was relatively steady, rising between three and four percent in each year. In 2014, health care spending averaged $4,967 per person, up $163 (3.4%) from the year before. Out-of-pocket spending grew 2.2 percent to $810.


  • On October 26, 2015, CMS released a ‘2016 Marketplace Affordability Snapshot, which provides a review of the final rate increases for second lowest cost silver plans, known as benchmark plans, which will be available for purchase in the 37 states that used the platform in 2015, including those in the Federally-facilitated Marketplace, State Partnership Marketplaces, and supported State-based Marketplaces. According to CMS’s press release on the data, the Snapshot includes the following highlights:
    • New HHS data indicates that in 2016 nearly 8 in 10 returning Marketplace consumers will be able to buy a plan with premiums less than $100 month after tax credits.
    • In addition, about 7 in 10 returning Marketplace consumers will be able to buy a plan for $75 or less in monthly premiums after tax credits in 2016.
    • The average rate increase for a benchmark plan across 30 of the largest markets, representing 60 percent of Marketplace enrollees, is 6.3 percent. This rate increase does not account for the benefit provided by tax credits to eligible consumers.
    • Across all markets in the 37 states, the cost of the benchmark plan will increase an average of 7.5 percent.
    • For 2016, over two thirds of counties will have three or more issuers.
    • New analysis based on the second open enrollment found that those returning consumers who switched plans within the same metal tier saved an average of nearly $400 on their 2015 annualized premiums after tax credits as compared to those who stayed in their same plans.
  • On October 26, 2015, CMS announced results from the Hospital Value-Based Purchasing Program. The Hospital Value-Based Purchasing (VBP) Program adjusts what CMS pays hospitals under the Inpatient Prospective Payment System (IPPS) based on the quality of care they give patients. For FY 2016, the law requires that the applicable percent reduction, the portion of Medicare payments available to fund the program’s value-based incentive payments, go up from 1.50 to 1.75 percent of the base operating Medicare Severity diagnosis-related group (MS-DRG) payment amounts to all participating hospitals. CMS estimates that the total amount available for value-based incentive payments in FY 2016 will be approximately $1.5 billion. According to the announcement, In FY 2016, about half of hospitals will see a small change in their base operating MS-DRG payments (between -0.4 and 0.4 percent). The highest performing hospital in FY 2016 will receive a net change in payments of slightly more than 3 percent after 1.75 percent is withheld. The worst performing hospital, receiving a Total Performance Score (TPS) of 0, will see the maximum reduction of 1.75 percent and will not receive an incentive payment. More information may be found here.
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