United States: Weekly Washington Healthcare Update: April 21, 2014

Last Updated: April 28 2014
Article by Stephanie A. Kennan and Brian J. Looser

1. Congress

House

District Work Period -- No Legislative Activity

Senate

State Work Period -- No Legislative Activity

2. Administration

CMS Publishes Inpatient Psychiatric Hospital Quality Measures Data

On April 17, the Centers for Medicare and Medicaid Services (CMS) released data related to quality factors for inpatient psychiatric facilities. The published agency data incorporates four quality measures, including hours of physical restraint, hours of seclusion use, creation of post-discharge continuing care and post-discharge continuing care plan transmittance to the next provider upon discharge. Moreover, the data, which was posted to Medicare's Hospital Compare website, aims to include publicly reported data from more than 1,700 facilities. "Offering a set of meaningful quality measures for psychiatric facilities will help consumers make informed decisions and will encourage quality improvement within the clinician community...," Patrick Conway, CMS chief medical officer and deputy administrator for innovation and quality, said in a statement. CMS announced that in April 2015 it would also include two other measures as part of quality reporting, including figures on patients discharged on multiple antipsychotic medications and patients discharged on multiple antipsychotic medications with appropriate justification.

Obama Announces Eight Million Enrolled in ACA Private Health Insurance Plans

President Obama announced April 17 that the number of people who have signed up for private health coverage through the new insurance exchanges has reached 8 million, up almost 500,000 participants since the Health and Human Services enrollment announcement on April 10. In a press conference statement, President Obama said, "We have a sizeable part of the U.S. population now for the first time in many cases in a position to enjoy the financial benefits of health insurance.... The Affordable Care Act is working." Worthy of noting, the president announced that of those who signed up for coverage on Healthcare.gov, 35 percent of them were younger than 35, which falls slightly shy of the administration's 40 percent target. Thursday's release also reported that 3 million young people were able to gain coverage by being able to stay on their parents' plans, under the provision allowing them to do so until age 26. Individuals struggling to secure insurance on the federal exchange, healthcare.gov, had an extension until April 15 to sign up for coverage. As it stands, those still uninsured now have to wait for the 2015 open enrollment period to sign up.

3. State Activities

South Carolina Exchange Enrollment Tops 115,000

According to the state insurance department, nearly 115,000 people in South Carolina have selected a health insurance plan on the federally operated exchange, with many enrollees coming just in recent weeks. In addition, the state offered residents a two-week grace period following the March 31 enrollment deadline, to assist individuals who may have had prior difficulty enrolling due to problems associated with the initial rollout of the ACA. Of the 115,000 South Carolinians who have selected a plan, however, only 68,000, or roughly 60 percent, have paid premiums. In addition, nearly 90 percent of enrollees qualify for tax subsidies to assist with the cost of premiums.

4. Regulations Open for Comment

CMS Proposed Rule on Life Safety Codes for Medicare, Medicaid Providers

On April 14, 2014, CMS announced a proposed rule on the adoption of an updated life safety code (LSC) that CMS would use in its ongoing work to ensure the health and safety of all patients, family and staff in every provider and supplier setting. The updated code contains new provisions that are vital to the health and safety of all patients and staff. CMS intends to adopt the National Fire Protection Association's (NFPA) 2012 editions of the (LSC) and the Health Care Facilities Code (HCFC), as the 2012 edition of the LSC also is aligned with the international building codes to make compliance across codes much simpler for Medicare- and Medicaid-participating facilities.

Currently, CMS applies the standards set out in the 2000 edition of the LSC to facilities in order to ensure patients' and caregivers' health and safety. CMS is now proposing to adopt the 2012 editions of the LSC and the Health Care Facilities Code. The LSC sets out fire safety requirements for new and existing buildings, and is issued by the NFPA, a private, nonprofit organization dedicated to reducing loss of life due to fire. The new edition of the LSC applies to: hospitals, long-term care facilities (LTC), critical access hospitals (CAHs), Programs for All-Inclusive Care for the Elderly (PACE®), religious nonmedical healthcare institutions (RNHCIs), hospice inpatient facilities, ambulatory surgical centers (ASCs) and intermediate care facilities for individuals with intellectual disabilities (ICF-IIDs).

Comments are due June 16, 2014.

FDA Guidance With Comment Period for Human Compounding Outsourcing Facilities

On April 1, the Food and Drug Administration (FDA) announced the availability of a guidance for industry entitled "Fees for Human Drug Compounding Outsourcing Facilities Under Sections 503B and 744K of the FD&C Act." The guidance is intended for entities that compound human drugs and elect to register as outsourcing facilities (outsourcing facility) under Section 503B of the Federal Food, Drug, and Cosmetic Act (FD&C Act), as added by the Drug Quality and Security Act (DQSA). Entities that elect to register as outsourcing facilities must pay certain fees to be considered outsourcing facilities. This guidance describes the annual establishment fee, the reinspection fee, annual adjustments to fees required by law, how to submit payment, the effect of failure to pay fees and how to qualify as a small business to obtain a reduction of the annual establishment fee. Comments on the draft guidance must be submitted by June 2, 2014.

FDA Proposed Rule on Medical Device Classification Procedures

On March 25, the Food and Drug Administration (FDA) issued a proposed rule to amend its regulations governing classification and reclassification of medical devices to conform to the applicable provisions in the Food and Drug Administration Safety and Innovation Act (FDASIA). FDA is also proposing changes unrelated to the new FDASIA requirements to update its regulations governing classification and reclassification of medical devices. FDA is taking this action to codify the procedures and criteria that apply to classification and reclassification of medical devices and to provide for classification of devices in the lowest regulatory class consistent with the public health and the statutory scheme for device regulation. Comments are due June 23, 2014.

Interim Final Rule - Patient Protection and Affordable Care Act; Third-Party Payment of Qualified Health Plan Premiums

On March 19, HHS issued an interim final rule requiring issuers of qualified health plans (QHPs), including stand-alone dental plans (SADPs), to accept premium and cost-sharing payments made on behalf of enrollees by the Ryan White HIV/AIDS Program, other Federal and State government programs that provide premium and cost-sharing support for specific individuals, and Indian tribes, tribal organizations and urban Indian organizations. Comments will be accepted until May 18; however, the interim final rule is effective as of March 14, 2014.

HHS Proposes Health Information Technology Certification Requirements

On Feb. 26, HHS published a notice of proposed rulemaking to introduce the beginning of the Office of National Coordinator for Health Information Technology's (ONC's) more frequent approach to health information technology certification regulations. Under this approach ONC intends to update certification criteria editions every 12 to 18 months in order to provide smaller, more incremental regulatory changes and policy proposals. The 2015 Edition EHR certification criteria proposed in this rule would be voluntary. No EHR technology developer who has certified its EHR technology to the 2014 Edition would need to recertify to the 2015 Edition in order for its customers to participate in the Medicare and Medicaid EHR Incentive Programs (EHR Incentive Programs). Furthermore, eligible professionals, eligible hospitals and critical access hospitals that participate in the EHR Incentive Programs would not need to "upgrade" to EHR technology certified to the 2015 Edition in order to have EHR technology that meets the Certified EHR Technology (CEHRT) definition. Instead, the 2015 Edition EHR certification criteria would accomplish three policy objectives: 1) They would enable a more efficient and effective response to stakeholder feedback; 2) they would incorporate "bug fixes" to improve on 2014 Edition EHR certification criteria in ways designed to make rules clearer and easier to implement; and 3) they reference newer standards and implementation specifications consistent with promoting innovation and enhancing interoperability.

Comments must be received by April 28, 2014.

FDA Public Docket for Interoperable Rx Tracking System

FDA has established a public docket to receive information and comments on standards for the interoperable exchange of information associated with transactions involving human prescription drugs in a finished dosage form (prescription drugs) to comply with new requirements in the Drug Supply Chain Security Act (DSCSA). FDA is seeking information from drug manufacturers, repackagers, wholesale distributors, dispensers (primarily pharmacies) and other drug supply chain stakeholders and interested parties, including standards organizations, State and Federal agencies, and solution providers. In particular, stakeholders and other interested parties are requested to comment about the interoperable exchange of transaction information, transaction history and transaction statements, in paper or electronic format, for each transfer of product in which a change of ownership occurs. This action is related to FDA's implementation of the DSCSA. Comments are due April 21, 2014.

IRS, HHS, DOL: Guidance Issued with Final Proposed Rules on 90-Day Waiting Periods Under ACA

On Feb. 20, the Internal Revenue Service (IRS), Department of Health and Human Services (HHS) and Department of Labor (DOL) released their final proposed rule clarifying the relationship between a plan's eligibility criteria and the 90-day waiting period limitation. In order to be in compliance with the Affordable Care Act (ACA), in the rule, insurers offering group health insurance coverage cannot institute a waiting period that surpasses 90 days. The final rule, which goes into effect on April 25, applies to plan years starting Jan. 1, 2015, or after. "This is a common sense measure that helps workers access employer-sponsored health insurance while providing employers flexibility," said DOL's Assistant Secretary of Employee Benefits Security Administration Phyllis C. Borzi. Also of note, the rule limits the maximum allowed length for the employment-based orientation period to no more than one month. Comments on the proposed rules are due by April 25, and the rule is expected to be published in the Federal Register on Feb. 24.

5. Reports

CBO/JCT: Updated Estimates of the Effects of the Insurance Coverage Provisions of the Affordable Care Act, April 2014

CBO and the staff of the Joint Committee on Taxation (JCT) have updated their estimates of the budgetary effects of the provisions of the Affordable Care Act (ACA) that relate to health insurance coverage. The new estimates, which are included in CBO's latest baseline projections, reflect CBO's most recent economic forecast, account for administrative actions taken and regulations issued through March 2014, and incorporate new data and various modeling updates. Relative to their previous projections made in February 2014, CBO and JCT now estimate that the ACA's coverage provisions will result in lower net costs to the federal government: The agencies currently project a net cost of $36 billion for 2014, $5 billion less than the previous projection for the year, and $1,383 billion for the 2015--2024 period, $104 billion less than the previous projections. The estimates of the net costs for 2014 stem almost entirely from spending for subsidies that are to be provided through insurance exchanges (often called marketplaces) and from an increase in spending for Medicaid.

OIG: Medicare and Beneficiaries Could Save Billions If CMS Reduces Hospital Outpatient Department Payment Rates for Ambulatory Surgical Center-Approved Procedures to Ambulatory Surgical Center Payment Rates

According to a recent report by the HHS-OIG, Medicare saved almost $7 billion during calendar years (CYs) 2007 through 2011 and could potentially save $12 billion from CYs 2012 through 2017 because ASC rates are frequently lower than outpatient department rates for surgical procedures. In addition, Medicare could generate savings of as much as $15 billion for CYs 2012 through 2017 if CMS reduces outpatient department payment rates for ASC-approved procedures to ASC payment levels for procedures performed on beneficiaries with low-risk and no-risk clinical needs. In addition, the OIG found beneficiaries would also save through reduced cost sharing. Beneficiaries saved approximately $2 billion during CYs 2007 through 2011 and could potentially save an additional $3 billion for the next 6 years because the ASC rates are frequently lower than outpatient department rates. In addition, beneficiaries could potentially save as much as $2 billion to $4 billion more during the 6 years through CY 2017 if CMS reduces outpatient department payment rates for ASC-approved procedures to ASC payment levels.

OIG: Medicare Improperly Paid Providers Millions of Dollars for Entitlement-Terminated Beneficiaries Who Received Services During 2010 Through 2012

On April 7, the HHS-OIG released a report that found that when CMS' data systems indicated at the time a claim was processed that a beneficiary's entitlement to Medicare had been terminated, the agency's controls were adequate to prevent payment for Medicare services. Specifically, CMS had a prepayment edit that flagged claims so that Medicare contractors could deny payments to providers for entitlement-terminated beneficiaries. However, when CMS' data systems did not indicate until after a claim had been processed that a beneficiary's entitlement to Medicare had been terminated, CMS' controls were not adequate to detect and recoup the improper payment. Because CMS did not always receive information relating to entitlement-terminated beneficiaries in a timely manner, Medicare payments totaling $18.4 million were made to providers for services rendered to 7,426 such beneficiaries during calendar years 2010 through 2012. CMS did not have policies and procedures to review information for these beneficiaries on a postpayment basis that would have detected improper payments that the prepayment edit could not prevent. Consequently, CMS did not notify the Medicare contractors to recoup any of the $18.4 million in improper payments. OIG recommends that CMS recoup the funds; however, CMS indicated this was not appropriate as the providers were not at fault for the error.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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