DCMedical News: Thursday, June 14, 2018
DCMedical News
Washington, D.C.
Thursday, June 14, 2018
DCMedical News is published every day either the House or the Senate is in session. Add our domain (dcmedicalnews.org) to your white list. (All courtesy subscriptions will end on or before July 31. Subscription information below.)
THE BIG STORY TODAY IN HEALTH CARE
Pre-Existent Conditions: Protection of the 50 million plus Americans with pre-existent health conditions has risen in visibility again. Democratic leaders (letter to HHS Sec. Azar and CMS Administrator Verma here) are pressing for an explanation of why the Department of Justice will not defend PPACA (DoJ Memorandum here). Republican leader Mr. McConnell tells CQ that “Everybody I know in the Senate — everybody — is in favor of maintaining coverage for pre-existing conditions . . . There's no difference of opinion about that whatsoever.”
Antitrust and Health Care in the Spotlight: The AT&T acquisition of Time Warner, approved by federal Judge Richard Leon (memorandum opinion here, 172 pgs.) without conditions, augurs well for the potential of CVS-Aetna, Cigna-Express Scripts and other vertical/industry acquisitions. Background on some current antitrust issues in health care (here) in JAMA. See story below on anti-competitive impact of vertical integrations, under PHARMA.
PwC projects (here) continued medical cost trends in excess of inflation, due, among other factors, to “megamergers” and consolidations.
DOCTORS, NURSES AND OTHER HEALTH PROFESSIONALS
AHRQ Weighs in on Noninvasive, Nonpharmacologic Chronic Pain Management: The 1400-page tome (here) with its emphasis on the reduction of drugs and procedures is reminiscent of efforts by AHRQ’s predecessor, the Agency for Health Care Policy and Research. AHCPR was created in 1989 to enhance the quality and effectiveness of health care services. AHCPR became controversial when it produced guidelines that would reduce the use of drugs and the performance of surgical procedures. Cannon (here) wrote in 2009: “In 1995, AHCPR produced an unflattering assessment of the efficacy of many back surgeries. Back surgeons and the medical-device manufacturer Sofamor Danek stood to suffer financially, and nearly succeeded in defunding the agency. Instead, Congress cut AHCPR’s budget by a mere 21 percent. According to author Shannon Brownlee, the retributions did not end there: ‘The AHCPR was given a new name, the Agency for Health Care Research and Quality, and stripped of its authority to recommend payment decisions to Medicare and Medicaid.’ The agency got the message. After 1995, it abandoned controversial research activities that were likely very useful. AHRQ nevertheless fell under political attack again. In 2002, the House of Representatives voted to eliminate AHRQ’s funding, though the agency ultimately survived.” AHRQ scaled back its recommendations, now called the National Guideline Clearinghouse. The Clearinghouse is being phased out completely this summer.
MEDICARE, MEDICAID, COMMERCIAL HEALTH INSURANCE
Vermont Joins Mandatory Insurance States: The Governor has signed the mandatory insurance bill. According to the VTDigger, “The Green Mountain State is moving forward with its quest to ensure as many people as possible have health insurance. The legislature enacted a law that will require all to be covered or penalized. Supporters say the law is needed to keep health insurance more affordable for everyone. The law is scheduled to take effect January 1, 2020.
PHARMA
Opioids: Bi-partisan leaders of the House Energy and Commerce Committee and House Ways and Means Committee introduced HR 6, a 100-page bill (here) which will serve as the underlying vehicle for the majority of House-passed bills to combat the opioid crisis when the bills move over to the Senate
Anti-Competitive Outlook for PBM-Insurer Mergers: There is advance information on what changes might be in store for hospitals, doctors and others purchasing goods and services from vertically integrated business combinations. Politico reports “A third-party vendor for about 60 New York hospitals and clinics said that it has gotten CVS Health to back off its alleged practice of pushing health care providers to use its subsidiary, Wellpartner.” However, CVS only promised that it would not require a switch to Wellpartner until their current 340B program administrator contract expires, following which “CVS intends to renew it on its integrated platform only." Sentry, the software company boasting of the pushback (see Modern Healthcare story here) has already sued CVS.
The practice of “tying” two products or services is characterized by the Federal Trade Commission (here) as follows: “[A] monopolist may use forced buying, or ‘tie-in’ sales, to gain sales in other markets where it is not dominant and to make it more difficult for rivals in those markets to obtain sales. This may limit consumer choice for buyers wanting to purchase one (‘tying’) product by forcing them to also buy a second (‘tied’) product as well.” Purchasers of goods and services in the health field can expect more tying; some commentators say that is the whole point of these business combinations.
CREATES ACT: Henry Waxman and others write in a Commonwealth Fund brief (here) about the proposal being heard by the Senate Judiciary Committee today. “The bipartisan Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act of 2017, under consideration tomorrow in the Senate Judiciary Committee, is one potential policy approach to curbing anticompetitive behavior by drug manufacturers,” making samples of legend drugs available for generic manufacturers. Mylan ad in support here.
EVENTS & MEETINGS
June 14
1:00 – 2:15 p.m., Alliance for Health Policy, “Prescription Drug Costs: Can Increased Competition Restrain Prices?” Industry reps.
June 20
AHIP Institute & Expo, San Diego, California.
8:30 a.m.-5:00 p.m., COGME: Council on Graduate Medical Education, 5600 Fishers Lane, Rockville, Md., conf. call 800-619-2521 code 9271697, KCarter@hrsa.gov, Federal Register notice here.
June 21
8:30 a.m.-2:00 p.m., COGME continues.
June 24
Academy Health, Annual Research Meeting, Seattle, Washington.
Special Report: Medicare Inpatient Prospective Payment System, Hospitals, Long Term Care Hospitals and Critical Access Hospitals, FY 2019, proposed rule. Publication date: May 7, 2018. Comment due date: June 25, 2018.
This is the twelfth part of a multi-part series on the Hospital Inpatient Prospective Payment System (IPPS) FY 2019 proposed rule. Our series began with the edition of May 21; previous editions of DCMN may be accessed by clicking on “View this email in your browser.” This IPPS proposed rule is arguably the single most important federal rule-making for hospitals each year. The 480-page Federal Register document is here.
Analysis of Hospital Payments:
Proposed FY 2019 market basket update, multifactor productivity adjustment (-.8%), PPACA adjustment (-.75%), MACRA documentation and coding (+.5%), market basket projected increase (+2.8%) total = FY2019 payment update of 1.75%, impact on all hospitals 2.1%, impact on major teaching hospitals 2.6%.
Outlier fixed loss cost threshold: proposed prospective payment rate for MS-DRG + IME payments + DSH payments + estimated uncompensated care payments + new technology add-on payments = $27,545 FY2019 fixed loss amount.
DSH payments come in two flavors: “Empirically justified DSH payment” under the Medicare statutory formula (25% of the total), and “Uncompensated Care Payment,” an amount which would otherwise have been paid as a Medicare DSH payment, reduced to reflect change in the percentage of uninsured individuals. Seventy five percent of the aggregate DSH payments that would have been made prior to PPACA = $12.2 billion, reduced by the insured factor so that FY2019 proposed uncompensated care amount is $8.25 billion.
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).
PUBLICATION SCHEDULE FOR DCMEDICAL NEWS
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Notes to: Fred Hyde, MD, JD, MBA; fredhyde@aol.com