DCMedical News: Monday, February 12, 2018
DCMedical News
Washington, D.C.
Monday, February 12, 2018
To our new readers: This is an independent newsletter, published every day that one or another House of Congress is in session. Subscription information will be found at the bottom of these pages.
THE BIG STORY TODAY IN HEALTH CARE
The President’s Budget for Fiscal Year (FY) 2019 (which begins October 1, 2018) is presented today. Prominent in the budget will be plans for the control of drug prices (see below under PHARMA). OMB Fact Sheet on the FY 2019 budget here; highlights include $3 trillion reduction in spending over 10 years, no detail; 4% increase for Veterans Affairs; $3 billion this year for opioids, $10 billion for opioids in FY 2019.
Winners and losers (mostly winners) total up the health field score from the Budget Bill. (The phrase “Budget Bill” used here refers to legislation passed and signed by the President on February 9. It combined spending continuation in FY 2018 until March 23, increases in spending authorization for FY 2018 and 2019 and a significant number of budget-related matters.)
The text of the bill is here. A summary of health items in the bill is found here. Projected increased expenditures (Congressional Budget Office report) on these health field items are found here.
The final House vote is found here, the final Senate vote here. A Washington Post infographic summarizing the federal budget process is found here.
DOCTORS AND OTHER HEALTH PROFESSIONALS
Doctors received an extension for two years of the work geographic practice cost index (GPCI) floor, which boosts payments for the work component of physician fees in areas where labor costs are lower than the national average. In a “Garrison Keillor-type” calculation, no GPCI will be below 1.0
Other wins: excluding the cost of Part B drugs from calculations concerning physician fees (MIPs scores), that is, not counting that cost as part of the physician expense; delaying some physician fee performance goals for three years; allowing the Physician-Focused Payment Model Technical Advisory Committee (PTAC) to be more pro-active concerning the design of experiments for physician payment.
Budget Bill section 2704, on the other hand, yielded only partial success in modifying the use of “misvalued coding.” MACRA, which is supposed to produce a .5% annual payment update for physician fees, is further modified by the 2014 Protecting Access to Medicare Act (PAMA) which set targets to reduce Medicare spending on misvalued or overvalued codes. If the PAMA targets were not met, the Medicare fee schedule overall is reduced (shades of the Sustainable Growth Rate!). The 2018 update of .5% has already been reduced to .31%. As a result of the Budget Bill, this reduction calculation process will continue in 2019 but the reduction process will be gone by 2020.
HOSPITALS AND HEALTH CARE FACILITIES
Hospitals had significant “wins” in the Budget Bill. The wins include a two year delay in the reduction of the Medicaid Disproportionate Share Hospital (DSH) program, the repeal of outpatient therapy caps (which will affect hospitals that employ physical, speech and occupational therapists, although payment for therapy assistants will be cut), and a significant number of Medicare extenders. (“Extenders” is a phrase which refers to legislation which establishes programs for a short time. They must be passed or funded by Congress every one to two years. Two extenders are particularly important to people with Medicare: the low-income outreach and the therapy cap exception extender, both of which expired at the end of December, 2017.)
With credit to Healthcare Financial Management, a list of Medicare extenders and related provisions includes:
Renewal of the Medicare Dependent Hospital Program, which expired Sept. 30
Renewal of the enhanced Low-Volume Adjustment Program, which expired Sept. 30
Renewal for five years of the ambulance add-on payment program, which expired Sept. 30
Repeal of the Medicare payment cap on therapy services
Removal of the rental cap for durable medical equipment under Medicare for speech-generating devices
Extension on a permanent basis of special needs plans in Medicare Advantage
Extension for five years of the Home Health rural add-on payment
Extension for two years of funding for Federally Qualified Health Centers (FQHCs)
Extension for two years of funding for the National Health Service Corps, Teaching Health Center Graduate Medical Education, Family-to-Family Health Information Centers, the Sexual Risk Avoidance Education Program, and the Personal Responsibility Education Program
Losses: The net total $320 billion increase includes an estimated $100 billion offset, that is, “takeaways” from existing authorized expenditures. The most important “takeaway” for the health field is the extension of the Medicare 2% sequestration for provider payments. Another major offset is the loss of $2.9 billion from the Prevention and Public Health Fund, a set of public health measures included in PPACA.
HEALTH INSURANCE, MEDICARE, MEDICAID, COMMERCIAL
Medicaid:
Medicaid waiver interest continues to grow in states which plan to treat Medicaid as welfare, not health care. Kentucky and now Indiana—both former clients of CMS Administrator Seema Verma—have had §1115 waiver requests approved which have, as a primary theme, the introduction of work requirements. Other initiatives: five states (Arizona, Kansas, Maine, Utah, Wisconsin) are seeking approval to impose limits on how long beneficiaries can remain on Medicaid; two (Arkansas and Massachusetts) would like to roll back Medicaid expansion to cover fewer people; one (Wisconsin) would like to require drug testing; Massachusetts would like to develop a formulary, a list of prescription drugs for which their state program would pay, based on “clinical effectiveness and cost considerations.”
The work requirement and the time limits are part of the welfare/cash assistance programs known as Temporary Assistance for Needy Families. PPACA, to the contrary, sought to expand enrollment and to promote Medicaid as a traditional health insurance program. A recent survey by the Kaiser Family Foundation found that 22 §1115 waivers are pending from 21 states.
More Medicare changes from the Budget Bill:
Skilled nursing facilities: lost $20 billion over ten years.
Home health care: lost, as episodes moved from 60 to 30 days, but this change pushed back to 2020; some additional controversies over documentation also lost.
Hospice: a Medicare hospital pay policy regarding transfers, which already applies to other post-acute facilities, will also now apply to early discharges to hospice care.
PHARMA
A loss in the Budget Bill: The bill included a provision that moves a part of Medicare drug costs away from insurance plans and onto drug makers. Avalere estimates that the shift will save the insurance industry $43.6 billion in the period 2020-2027, and will also save patients $6.7 billion. PPACA gradually increased industry costs to close the pharmaceutical (Part D, Medicare) “donut hole,” eliminating the gap by 2020.
The White House Council of Economic Advisers has published “Reforming Biopharmaceutical Pricing at Home and Abroad,” found here.
OTHER PUBLICATIONS
DoJ Action Reported in the NYT: Regulatory Structures Dismantled
Robert Pear reports in The New York Times that, through the Justice Department, the administration has adopted new limits on the use of guidance documents. These are documents employed by federal agencies to translate statute and regulation into action or a limitation on action. The interpretations often create the “standard” against which the reasonableness of individual or corporate conduct can be judged. Now, the basics - - whether government agencies can use guidance documents at all - - are in question.
The DoJ move, itself a new policy, unrelated to a particular statute or regulation, advances the administration’s goal of reducing the number of federal requirements. This is frequently characterized as reducing the “burden” of regulatory activity. The counter-argument is that for every “burdensome” regulation on a company there may be thousands or even millions of beneficiaries.
In the health field, this policy will be seen most readily in civil lawsuits, those that impose penalties or sanctions for prohibited conduct. For example, fraudulent activity in the health field - - frequently regarded as 10 – 15% or more of total health expenditures - - is controlled, to the extent it is, through the anti-kickback statute, the Stark laws and the False Claim Act. The Office of the Inspector General of the Department of Health and Human Services interprets all of these, for example, to accommodate changing business practices in the health field. It isn’t clear (inasmuch as the Department of Justice directive is brand new) whether OIG would continue to be in that business.
A second major area for guidance documents in the health field involves the interpretation of statute, regulations and rules of the Centers for Medicare and Medicaid Services concerning Medicare and Medicaid payments. For Medicare the Conditions of Participation are in statute. But many interpretive documents are not. Events will make clear whether the directives, many of them transmitted through state inspections, fiscal intermediary decisions, the work of Recovery Audit Contractors (RACs) and the like will be affected by this DoJ instruction, since few of these documents are the result of properly-adopted regulation or statute.
Of interest, Seema Verma, administrator of CMS, has been criticized by Members of Congress for adopting an informal (Request for Information) approach to rulemaking. Whether the informality of the RFI will conflict with the directives of “reducing the burden of regulation” will be another development.
Health Care Cost Institute Report, at http://www.healthcostinstitute.org/report/2016-health-care-cost-utilization-report/
EVENTS & MEETINGS
Your February & March Calendar:
February 14
10:00 a.m., Ways and Means Committee, Budget proposals for the Department of Health and Human Services, livestreamed at waysandmeans.house.gov/live.
February 15
Noon, CMS Open Forum on BPCI Advanced, https://engage.vevent.com/rt/cms2/index.jsp?ecid=780.
February 15
12:30 p.m., The Health Subcommittee of Energy and Commerce will hold a hearing entitled, “Oversight of the Department of Health and Human Services.” Livestreamed.
February 21
11:00, at Medicare.gov, Physician Compare 90-minute webinar on PQRS.
February 27
10:00-11:30 a.m., The Future Role of Government in Health IT and Digital Health, Bipartisan Policy Center, 1225 Eye Street NW, Suite 1000, Washington, DC 20005.
March 1
MedPAC, Ronald Reagan Building, Horizon Ballroom, 1300 Pennsylvania Ave, continuing March 2.
March 1
MACPAC, advisory body on Medicaid and the Children’s Health Insurance Program, continuing March 2.
March 6
8:00-11:00 a.m., Roll Call and CQ News present Health Care Decoded, at the Newseum, information at: http://go.cq.com/2018HealthCareDecoded_01.RegistrationPage.html?utm_medium=newsletter&utm_source=hbmorning.
March 26
http://go.cq.com/2018HealthCareDecoded_01.RegistrationPage.html?utm_medium=newsletter&utm_source=hbmorning PTAC, Physician-Focused Payment Model Technical Advisory Committee, continuing March 27, information at www.regonline.com/PTACMeetingsRegistration or livestream at www.hhs.gov/live.
FOR REFERENCE
Members of the Senate (here) and Members of Senate Committees (here), Senate Calendar (here).
Members of the House with their House Committees (here), House Calendar (here).
DCMN: February publication dates: 13, 14, 15, 16, 26, 27, 28.
Notes to: Fred Hyde, MD, JD, MBA; fredhyde@aol.com