United States: Weekly Washington Healthcare Update: May 19, 2014

Last Updated: May 22 2014
Article by Stephanie A. Kennan and Brian J. Looser

This Week: Finance Committee hearing on Burwell nomination as HHS Secretary... CMS to restructure Quality Improvement Organization (QIO) program... Final rule on health insurance exchange standards released.

1. CONGRESS

House

District Work Period -- No Legislative Activity

Senate

Finance Committee Hearing on Burwell Nomination to HHS Secretary

On May 14, 2014, the Senate Committee on Finance held a hearing to consider the nomination of the Honorable Sylvia Mathews Burwell, of West Virginia, to be Secretary of Health and Human Services (HHS), to replace Kathleen Sebelius, who resigned from the position in April. The hearing highlighted the strong bipartisan support that Burwell had coming into her second confirmation hearing, bringing her one step closer to a final confirmation. In his opening statement, Committee Chairman Ron Wyden began by praising Burwell, stating, "If one thing has become clear in the month since the President announced Ms. Burwell's nomination, it's that she is tremendously well-respected -- not only by people she's led and worked with in the administration, but by Democrats and Republicans in Congress, too." Wyden cited her previous confirmation of 96-0 for her current role at OMB as an indicator of what he expects will be a swift confirmation.

Witness:
The Honorable Sylvia Mathews Burwell
Secretary of Health and Human Services -- Designate
United States Department of Health and Human Services

For more information, or to view the hearing, please visit: www.finance.senate.gov

2. ADMINISTRATION

CMS to Restructure Medicare Quality Improvement Organization Program

On May 9, the CMS announced its plan to restructure Medicare's Quality Improvement Organization (QIO) Program. The QIO Program is designed to improve quality of care and patient safety by providing Medicare contractors with an infrastructure for national quality improvement initiatives across the continuum of care to better address the needs of beneficiaries and providers. Restructuring will allow two Beneficiary and Family-Center Care (BFCC) QIO contractors to support the program's case review and monitoring activities separate from the traditional quality improvement activities of the QIOs. In a statement, CMS said the overhaul "highlights CMS' efforts to restructure the QIO Program to gain efficiencies, to eliminate any perceived conflicts of interest, and to better address the needs of the Medicare beneficiaries." The CMS will outline the changes on Aug. 1, 2014, in its Statement of Work.

CMS Seeking Additional Comments on "Sunshine" Data Dispute Resolution

The CMS is seeking additional comments on the dispute resolution and correction procedures proposed in the final "sunshine" rule. The final rule implements Section 6002 of the ACA, which requires manufacturers of drugs, devices and other medical supplies to report certain payments to physicians or teaching hospitals. The CMS previously asked for comments in February 2013, but given the "sensitivities around these processes" the agency is seeking additional feedback. Comments are due June 2, 2014.

CMS Issues Final Rule on Exchanges and Health Insurance Market Standards

On May 16, 2014, CMS issued a final rule addressing various requirements applicable to health insurance issuers, Affordable Insurance Exchanges ("Exchanges"), Navigators, non-Navigator assistance personnel and other entities under the ACA. Specifically, the rule establishes standards related to product discontinuation and renewal, quality reporting, nondiscrimination standards, minimum certification standards and responsibilities of qualified health plan (QHP) issuers, the Small Business Health Options Program and enforcement remedies in Federally Facilitated Exchanges. It also finalizes: a modification of HHS's allocation of reinsurance collections if those collections do not meet projections; certain changes to allowable administrative expenses in the risk corridors calculation; modifications to the way CMS will calculate the annual limit on cost sharing by rounding this parameter down to the nearest $50 increment; an approach to index the required contribution used to determine eligibility for an exemption from the shared responsibility CMS-9949-F payment under Section 5000A of the Internal Revenue Code; grounds for imposing civil money penalties on persons who provide false or fraudulent information to the Exchange and on persons who improperly use or disclose information; updated standards for the consumer assistance programs; standards related to the opt-out provisions for self-funded, non-Federal governmental plans and related to the individual market provisions under the Health Insurance Portability and Accountability Act of 1996 including excepted benefits; standards regarding how enrollees may request access to non-formulary drugs under exigent circumstances; amendments to Exchange appeals standards and coverage enrollment and termination standards; and time-limited adjustments to the standards relating to the medical loss ratio (MLR) program. The majority of the provisions in this rule are being finalized as proposed.

3. STATE ACTIVITIES

Missouri Democrats Press for Medicaid Expansion

In Missouri, Democrats in the state legislature are threatening to hold up a sales tax hike intended to support transportation initiatives unless they get a vote on Medicaid expansion. The tax was likely to pass until Democrats demanded a vote on the ACA provision to expand eligibility for Medicaid. House Minority Leader Jake Hummel noted that Democratic votes would be required to advance the tax measure. Although the state's legislative session is coming to an end, proponents continue to evaluate opportunities to tie Medicaid expansion to bills already in progress.

Departing Arkansas Medicaid Director

Andy Allison, Arkansas Medicaid director, will depart his post June 1 after the first few months of enrollment in Arkansas' hybrid private option Medicaid expansion. Allison has been in charge of the Medicaid agency since November 2011. According to the agency, Dawn Zekis, the director of Health Care Innovation at the state Department of Human Services, will run the department during a national search for Allison's replacement.

4. REGULATIONS OPEN FOR COMMENT

OIG Proposed Rule to Promote Civil Monetary Penalties for Health Fraud

On May 12, the Department of Health and Human Services Office of Inspector General published a rule in the Federal Register that would expand the use of civil monetary penalties (CMPs). Under the rule, CMPs could be applied to entities for failing to provide OIG with quick access to documents, ordering or prescribing medication or services while excluded from participation in federal health care programs, making false statements on enrollment applications, failing to report or return overpayments, and making a false statement that is part of a fraudulent claim. In addition, the proposed rule would also allow CMPs to be imposed on Medicare Advantage and Medicare Part D organizations. Comments on the rule are due July 11.

CMS Proposed Rule FY 2015 Hospice Payment Rate Update

On May 2, 2014, CMS issued a proposed rule [CMS-1609-P] that would update fiscal year (FY) 2015 Medicare payment rates and the wage index for hospices serving Medicare beneficiaries. As proposed, hospices would see an estimated 1.3 percent ($230 million) increase in their payments for FY 2015. The hospice payment increase would be the net result of a proposed hospice payment update to the hospice per diem rates of 2 percent (a "hospital market basket" increase of 2.7 percent minus 0.7 percent for reductions mandated by law), and a 0.7 percent decrease in payments to hospices due to updated wage data and the sixth year of CMS' seven-year phase-out of its wage index budget neutrality adjustment factor (BNAF). This rule also provides an update on hospice payment reform analyses and solicits comments on "terminal illness" and "related conditions" definitions, and on a process and appeals for Part D payment for drugs, while beneficiaries are under a hospice election. In addition, the rule proposes timeframes for filing the notice of election and the notice of termination/revocation; adding the attending physician to the hospice election form; a requirement that hospices complete their hospice inpatient and aggregate cap determinations within five months after the cap year ends, and remit any overpayments; and updates for the hospice quality reporting program.

Public comments on the proposal will be accepted until July 1, 2014.

CMS Final Rule -- Federally Qualified Health Center Prospective Payment System

On May 2, 2014, CMS issued a final rule with comment period to implement methodology and payment rates for a prospective payment system (PPS) for federally qualified health center (FQHC) services under Medicare Part B beginning on Oct. 1, 2014, in compliance with the statutory requirement of the Affordable Care Act. In addition, it establishes a policy that allows rural health clinics (RHCs) to contract with nonphysician practitioners when statutory requirements for employment of nurse practitioners and physician assistants are met, and makes other technical and conforming changes to the RHC and FQHC regulations. Finally, this final rule with comment period implements changes to the Clinical Laboratory Improvement Amendments (CLIA) regulations regarding enforcement actions for proficiency testing (PT) referrals. Comments will be accepted through July 1, 2014.

CMS Issues Proposed Hospital Inpatient Payment Regulation

CMS issued a proposed rule that would update fiscal year (FY) 2015 Medicare payment policies and rates for inpatient stays at general acute care and long-term care hospitals (LTCHs). This rule builds on the Obama administration's efforts through the Affordable Care Act to promote improvements in hospital care that will lead to better patient outcomes while slowing the long-term health care cost growth. CMS projects that the payment rate update to general acute care hospitals will be 1.3 percent in FY 2015. The rate update for long-term care hospitals will be 0.8 percent. The difference in the update is accounted for by different statutory and regulatory provisions that apply to each system.

The rule's most significant changes are payment provisions intended to improve the quality of hospital care, which reduce payment for readmissions and hospital acquired conditions (HACs). The rule also includes proposed changes to the Hospital Inpatient Quality Reporting (IQR) Program. The rule also describes how hospitals can comply with the Affordable Care Act's requirements to disclose charges for their services online or in response to a request, supporting price transparency for patients and the public.

CMS will accept comments on the proposed rule until June 30, 2014, and will respond to comments in a final rule to be issued by Aug. 1, 2014.

Fiscal Year 2015 Inpatient Psychiatric Facilities Prospective Payment System

On May 1, 2014, CMS issued a proposed rule that would update the prospective payment rates for Medicare inpatient hospital services provided by inpatient psychiatric facilities (IPFs). These changes would be applicable to IPF discharges occurring during the fiscal year (FY) beginning Oct. 1, 2014, through Sept. 30, 2015. This proposed rule would also address implementation of ICD-10-CM and ICD-10-PCS codes; propose a new methodology for updating the cost of living adjustment (COLA); and propose new quality measures and reporting requirements under the IPF quality-reporting program. The proposed rule will appear in the May 6, 2014, Federal Register and will be open to public comment for 60 days.

Proposed Fiscal Year 2015 Payment and Policy Changes for Medicare Inpatient Rehabilitation Facilities

On May 1, 2014, CMS issued a proposed rule that would update the prospective payment rates for inpatient rehabilitation facilities (IRFs) for federal fiscal year (FY) 2015 (for discharges occurring on or after Oct. 1, 2014, and on or before Sept. 30, 2015) as required by the statute. The rule also proposes to collect data on the amount and mode (that is, Individual, Group and Co-Treatment) of therapy provided in the IRF setting according to therapy discipline, revise the list of impairment group codes that presumptively meet the "60 percent rule" compliance criteria, provide for a new item on the Inpatient Rehabilitation Facility-Patient Assessment Instrument (IRF-PAI) form to indicate whether the prior treatment and severity requirements have been met for arthritis cases to presumptively meet the "60 percent rule" compliance criteria, and revise and update quality measures and reporting requirements under the IRF quality reporting program (QRP). The proposal also addresses the implementation of the International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM), for the IRF prospective payment system (PPS), effective when ICD-10-CM becomes the required medical data code set for use on Medicare claims and IRF-PAI submissions. The proposed rule will appear in the May 7 Federal Register and will be open to public comments for 60 days.

FDA Proposed Rule on Deeming Tobacco Products To Be Subject to the Federal Food, Drug, and Cosmetic Act

FDA has issued a proposed rule that would deem products meeting the statutory definition of "tobacco product," except accessories of a proposed deemed tobacco product, to be subject to the Federal Food, Drug, and Cosmetic Act (the FD&C Act), as amended by the Family Smoking Prevention and Tobacco Control Act (Tobacco Control Act). The Tobacco Control Act provides FDA authority to regulate cigarettes, cigarette tobacco, roll-your-own tobacco, smokeless tobacco and any other tobacco products that the Agency by regulation deems to be subject to the law. Option 1 of the proposed rule would extend the Agency's "tobacco product" authorities in the FD&C Act to all other categories of products, except accessories of a proposed deemed tobacco product, that meet the statutory definition of "tobacco product" in the FD&C Act. Option 2 of the proposed rule would extend the Agency's "tobacco product" authorities to all other categories of products, except premium cigars and the accessories of a proposed deemed tobacco product, that meet the statutory definition of "tobacco product" in the FD&C Act. FDA also is proposing to prohibit the sale of "covered tobacco products" to individuals under the age of 18 and to require the display of health warnings on cigarette tobacco, roll-your own tobacco and covered tobacco product packages and in advertisements. FDA is taking this action to address the public health concerns associated with the use of tobacco products. Comments are due July 9, 2014.

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.

5. REPORTS

VA Health Care: VA Lacks Accurate Information about Outpatient Medical Appointment Wait Times, Including Specialty Care Consults

On May 15, GAO released a report updating its preliminary work examining the Department of Veterans Affairs' (VA), Veterans Health Administration's (VHA) management of outpatient specialty care consults identified examples of delays in veterans' receiving outpatient specialty care, as well as limitations in the implementation of new consult business rules designed to standardize aspects of the clinical consult process. For example, for 4 of the 10 physical therapy consults GAO reviewed for one VA medical center (VAMC), between 108 and 152 days elapsed with no apparent actions taken to schedule an appointment for the veteran. For one of these consults, several months passed before the veteran was referred for care to a non-VA health care facility. VAMC officials cited increased demand for services, and patient no-shows and cancelled appointments among the factors that lead to delays and hinder their ability to meet VHA's guideline of completing consults within 90 days of being requested. GAO's preliminary work also identified variation in how the five VAMCs reviewed have implemented key aspects of VHA's business rules, such as strategies for managing future care consults -- requests for specialty care appointments that are not clinically needed for more than 90 days. Such variation may limit the usefulness of VHA's data in monitoring and overseeing consults systemwide. Furthermore, oversight of the implementation of the business rules has been limited and has not included independent verification of VAMC actions. Because of the preliminary nature of this work, GAO is not making recommendations on VHA's consult process at this time.

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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