A&B Healthcare Week in Review, February 3, 2017

I. Regulations, Notices, & Guidance

• On January 30, 2017, the Department of Health and Human Services (HHS) withdrew a guidance entitled, 340B Program Omnibus Guidelines. The proposed guidance discussed the definition of a 340B patient and touched on contract pharmacy arrangements, audit procedures and ways to avoid duplicate discounts, among other provisions.
• On February 1, 2017, the Department of Defense (DoD) issued a notice entitled, TRICARE; Civilian Health and Medical Program of the Uniformed Services (CHAMPUS); Fiscal Year 2017 Diagnosis Related Group (DRG) Updates and Notice of Termination of Future Federal Register Notices Regarding the DRG Update. The notice describes the changes made to the TRICARE DRG-based payment system in order to conform to changes made to the Medicare Prospective Payment System (PPS). It also provides the updated fixed loss cost outlier threshold, cost-to-charge ratios, and the data necessary to update the Fiscal Year (FY) 2017 rates. The notice also announces that there will be no future Federal Register notices published for the annual DRG updates, as all information included in the notice will now be published on the Defense Health Agency’s official website found at http://www.health.mil. As a result, FY 2017 is the last year for publication of the DRG notice. The rates, weights, and Medicare PPS changes which affect the TRICARE DRG-based payment system contained in this notice are effective for discharges occurring on or after October 1, 2016.
• On February  1, 2017, the Office of Management and Budget (OMB) received a proposed rule from HHS entitled, Patient Protection and Affordable Care Act; Market Stabilization. OMB provides no detail on the anticipated content of the proposed rule.
• On February 1, 2017, the Center for Medicare & Medicaid Services (CMS) issued a notice entitled, Advance Notice of Methodological Changes for Calendar Year (CY) 2018 for Medicare Advantage (MA) Capitation Rates, Part C and Part D Payment Policies and 2018 Call Letter. The notice announces the changes in the Medicare Advantage (MA) capitation rate methodology and risk adjustment methodology applied under Part C of the Act for calendar year (CY) 2018. The notice also announces the proposed changes in the payment methodology for CY 2018 for Part D and annual adjustments for CY 2018 to the Medicare Part D benefit parameters for the defined standard benefit. Comments are due by March 3, 2017.
• On February 2, 2017, HHS issued a final rule entitled, Annual Civil Monetary Penalties Inflation Adjustment. The final rule updates HHS regulations to reflect required annual inflation-related increases to the civil monetary penalties in its regulations, pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvement Act of 2015.
• On February 3, 2017, the Food and Drug Administration (FDA) issued a notice entitled, Advisory Committee Nominations; Modification to Process for Collecting and Posting Curricula Vitae. The notice announces that the FDA is modifying the process by which they collect and post curricula vitae (CVs) of advisory committee members so that the CVs will be posted to the FDA’s Web site without removing or redacting any information.

II. Congressional Legislation & Committee Action

• On February 1, 2017, the Senate Health, Education, Labor and Pensions (HELP) Committee held a hearing entitled, Obamacare Emergency: Stabilizing the Individual Health Insurance Market. The witnesses included Julie Mix McPeak, Commissioner of the Tennessee Department of Commerce and Insurance; Ms. Marilyn Tavenner, President and CEO of America’s Health Insurance Plans; Ms. Janet Trautwein, CEO of the National Association of Health Underwriters; and Mr. Steve Beshear, former Kentucky Governor.

• On January 31, 2017, the House Energy and Commerce Oversight and Investigations Subcommittee held a hearing entitled, Medicaid Oversight: Existing Problems and Ways to Strengthen the Program. The witnesses included Ms. Carolyn Yocom, Direct of health care at the Government Accountability Office; Ms. Ann Maxwell, Assistant Inspector General in the HHS OIG’s Office of Evaluation and Inspections; Mr. Paul Howard, Senior Fellow and Director of Health Policy at the Manhattan Institute; and Mr. Josh Archambault, Senior Fellow at the Foundation for Government Accountability.
• On January 31, 2017, the House Oversight and Government Reform Health Care, Benefits and Administrative Rules Subcommittee held a hearing entitled, Fraud, Waste and Abuse under the Affordable Care Act. The witnesses included Ms. Vicki Robinson, Senior Counselor for Policy, Office of Inspector General; Mr. John Dicken, Director, Health Care, Government Accountability Office; and Mr. Johnathan Siegel, Citizen, Rochester, NY.
• On February 1, 2017, the House Energy and Commerce Health Subcommittee held a hearing entitled, Strengthening Medicaid and Prioritizing the Most Vulnerable. The witnesses included Mr. John McCarthy, former Director, Ohio Department of Medicaid, and former Deputy Director, District of Columbia Department of Health Care Finance; Dr. Avik Roy, President, The Foundation for Research on Equal Opportunity; and Ms. Judith Solomon, Vice President for Health Policy, The Center on Budget and Policy Priorities.
• On February 1, 2017, the House Education and the Workforce Committee held a hearing entitled, Rescuing Americans from the Failed Health Care Law and Advancing Patient-Centered Solutions. The witnesses included Mr. Scott Bollenbacher, CPA and Managing Partner of Bollenbacher & Associates; Mr. Joe Eddy, President and CEO of Eagle Manufacturing Company; Ms. Angela Schlaack; and Mr. Tevi Troy, CEO of the American Health Policy Institute.
• On February 2, 2017, the House Energy and Commerce Health Subcommittee held a hearing entitled, Patient Relief from Collapsing Health Markets. The witnesses included Dr. Doug Holtz-Eakin, President, American Action Forum; Dr. Leonard Lichtenfeld, Deputy Chief Medical Officer, American Cancer Society; and Mr. J.P. Wieske, Deputy Commissioner of Insurance, State of Wisconsin.

Upcoming Congressional Floor and Committee Action

U.S. Senate

• Currently there are no health care related hearings scheduled for the week of February 6, 2017.

• On February 7, 2017, the House Small Business Committee will hold a hearing entitled, Reimagining the Health care Marketplace for America’s Small Businesses. The witnesses include Mr. Tom Secor, President of the Durable Corporation, Norwalk Ohio, representing the National Small Business Association; Mr. Keith Hall, President and CEO of the National Association for the Self-Employed; and Mr. Kevin Kuhlman, Director of Government Relations at the National Federation of Independent Business.

• On January 31, 2017, the Government Accountability Office (GAO) released a report entitled, Medicaid: CMS Has Taken Steps, but Further Efforts Are needed to Control Improper Payments. The report found the following: (1) that there continue to be gaps in efforts to ensure that only eligible individuals are enrolled into Medicaid, and that Medicaid expenditures for enrollees—particularly those eligible as a result of the ACA expansion—are matched appropriately by the federal government; (2) incomplete and untimely managed care encounter data—data that managed care organizations are expected to report to state Medicaid programs, allowing states to track the services received by beneficiaries enrolled in managed care; challenges with screening providers for eligibility, partially due to fragmented information; and CMS has not developed a plan for assessing whether the checks and other procedures—such as thresholds for the level of duplicate coverage deemed acceptable—are sufficient to prevent and detect duplicate coverage.
• On January 31, 2017, the GAO released a report entitled, Patient Protection and Affordable Care Act: Concentration, Plan Availability and Premiums, and Enrollee Experiences in Health Insurance Markets Since 2014. The report found that health insurance markets remained concentrated in most states in 2014, while issuer participation general decreased from the prior year. The GAO also found that consumers in the individual market had access to more plans in 2015 than 2014, with varying premiums in both years. Lastly, the GAO found that available data shows that most early quality health plan (QHP) enrollees expressed satisfaction with their plans in 2014 through 2016, despite some concerns.
• On February 3, 2017, the Office of Inspector General (OIG) released a report entitled, CDC Awarded Selected Ebola Funds for International Response Activities in Accordance With Applicable Laws, Regulations, and Departmental Guidance. The report found that the Centers for Disease Control and Prevention (CDC) awarded all 31 selected Ebola-related international grants totaling $122 million in accordance with applicable laws, regulations, and departmental guidance.
• On February 3, 2017, the OIG released a report entitled, Kentucky Misallocated Millions to Establishment Grants for a Health Insurance Marketplace. The report found that the Cabinet for Health and Family Services (State agency) did not allocate costs for establishing a health insurance marketplace to its establishment grants in accordance with Federal requirements. Specifically, the State agency used a flawed methodology to allocate d$23.6 million in costs from October 1, 2013, through April 15, 2014 and misallocated $25.5 million in costs from April 15, 2014, through December 31, 2014, because it continued using a flawed methodology and did not updates its cost-allocation methodology using updated, better data.

IV. Other Health Policy News

• On February 1, 2017, CMS released a fact sheet entitled, 2018 Medicare Advantage and Part D Advance Notice and Draft Call Letter. The fact sheet discusses the proposed updated to the methodologies used to pay MA plans and Part D sponsors.
• On February 3, 2017, CMS released a Biweekly Enrollment Snapshot for the period of January 15, 2017 through January 31, 2017. According to CMS, on January 31, 2017, Open Enrollment for 2017 coverage ended with more than 9.2 million plan selections in states that use the HealthCare.gov eligibility and enrollment platform. Those selections were made from a market that experienced a 25 percent increase over the previous year in the average premium for the benchmark second-lowest cost silver plan as well as a 28 percent decline in the number of issuers participating over the past year.

V. ACA Repeal News

• On February 1, 2017, Senate Finance Committee Chair Orrin Hatch (R-UT) said that the ACA’s taxes must be wrapped into the initial repeal bill.
• On February  1, 2017, the Office of Management and Budget (OMB) received a proposed rule from HHS entitled, Patient Protection and Affordable Care Act; Market Stabilization. OMB provides no detail on the anticipated content of the proposed rule.
• On February 2, 2017, the House Energy and Commerce Health Subcommittee discussed four pieces of draft legislation, which aim to “improve insurance markets and ensure taxpayer dollars are only spent on those eligible for assistance under federal law.” The discussion drafts under consideration included the following: (1) Discussion Draft of H.R. __, Plan Verification and Fairness Act of 2017; (2) Discussion Draft of H.R. __, State Age Rating Flexibility Act of 2017; (3) Discussion Draft of H.R. __, Health Coverage State Flexibility Act of 2017; and (4) Discussion Draft of H.R. __, Preexisting Conditions Protection and Continuous Coverage Incentive Act of 2017. Copies of the draft bills can be found here.