United States: Washington Healthcare Update - November 17, 2014

This Week: House Passes Two Bipartisan Health Bills on Sunscreen Oversight and Traumatic Brain Injury Prevention Funding... HHS Releases Estimated 2015 ACA Enrollment... Arizona Becomes Fifth State to Enact "Right to Try" Law.



Veterans Affairs Committee Hearing Explores Status of Veterans Health Reform Law

On Nov. 13, the House Committee on Veterans Affairs held a hearing entitled "Assessing the Implementation of the Veterans Access, Choice, and Accountability Act of 2014," which examined activities within the U.S. Department of Veterans Affairs stemming from the law enacted this summer to remedy flaws in the department that had led to extensive wait times for veterans accessing health benefits. Deputy Secretary Gibson testified that while the new law allowed for expedited removal of senior executives who perform poorly, the department is providing federal executives implicated in scandal more time to appeal firings because faster terminations may violate employee rights, leading to terminations' being overturned.


The Honorable Sloan Gibson
Deputy Secretary
U.S. Department of Veterans Affairs

Accompanied By:
James Tuchschmidt, M.D., M.M.
Acting Principal Deputy Under Secretary for Health, Veterans Health Administration, U.S. Department of Veterans Affairs

Accompanied By:
Gregory L. Giddens
Executive Director, Enterprise Program Management Office
U.S. Department of Veterans Affairs

For more information, or to view the hearing, please visit veterans.house.gov.

Upcoming: House Subcommittee to Host Hearing on U.S. Public Health Response to the Ebola Outbreak

On Nov. 18, the House Energy and Commerce Committee Subcommittee on Oversight and Investigations will hold a hearing to continue its investigation on the United States' public health response and preparedness efforts for the ongoing Ebola outbreak. "Questions continue to emerge as this outbreak has continued, further heightening our concerns about the response and preparedness efforts both at home and abroad. Just a few weeks ago there was an urgent need to quickly stop the spread of Ebola in Africa, but now we also need to assure Americans that we are able to stop the spread here at home. There is no room for error when it comes to Ebola," said Subcommittee Chairman Tim Murphy (R-PA). The hearing, entitled "Update on the U.S. Public Health Response to the Ebola Outbreak," will be held at 1:00 p.m. in 2123 Rayburn House Office Building.


Panel I

Dr. Thomas R. Frieden
Centers for Disease Control and Prevention

Dr. Nicole Lurie
Assistant Secretary, Preparedness and Response
U.S. Department of Health and Human Services

Rear Admiral Boris Lushniak, M.D.
Acting Surgeon General
U.S. Department of Health and Human Services

Panel II

Mr. Ken Isaacs
Vice President, Programs and Government Relations
Samaritan's Purse

Dr. Jeffrey Gold
University of Nebraska Medical Center

For more information, or to view the hearing, please visit energycommerce.house.gov.

House Passes Two Bipartisan Health Bills on Sunscreen Oversight and Traumatic Brain Injury Prevention Funding

This week the House of Representatives passed two bipartisan health bills. The Sunscreen Innovation Act (H.R.4250), which passed the Senate on Sept. 17, instructs the Food and Drug Administration (FDA) to establish a more efficient review of new sunscreen ingredients in over-the-counter brands while maintaining safety standards; the Congressional Budget Office (CBO) estimates that implementing the bill would cost $28 million over the 2015-2019 period. This bill will be sent to the White House for a presidential signature. The second bill, which has yet to be approved by the Senate, is the Traumatic Brain Injury Reauthorization Act (H.R.1098). The bill funds programs within the Centers for Disease Control (CDC) and the Health Resources and Services Administration (HRSA) to track and reduce the incidence of traumatic brain injury. The bill would authorize $16 million in grant funding annually for fiscal years 2014 through 2018.

Upcoming Energy and Commerce Hearing to Focus on Ebola Medical Product Development

On Nov. 19, the Energy and Commerce Subcommittee on Health will hold a hearing entitled "Examining Medical Product Development in the Wake of the Ebola Epidemic," during which the committee will hear from witnesses about the status of developing vaccines, diagnostics and treatments for the Ebola virus. In a statement announcing the hearing, Energy and Committee Chairman Upton (R-MI) said, "The threat of the Ebola outbreak is real and extends beyond its source in West Africa. We need to confirm that the United States is, in fact, taking every precaution and fully preparing our health care system for additional cases here at home. Equally as important is stopping the spread of this horrific virus in West Africa and finding effective vaccines, diagnostics, and treatments for Ebola as well as the thousands of other diseases that lack remedies."


Dr. Robin Robinson
Director, BARDA
Office of the Assistant Secretary for Preparedness and Response

Dr. Luciana Borio
Assistant Commissioner
Counterterrorism Policy
U.S. Food and Drug Administration

Rear Admiral Steve Redd
Senior Advisor for Ebola Response
U.S. Centers for Disease Control and Prevention

Dr. Anthony Fauci
National Institute for Allergy and Infectious Diseases
National Institutes of Health

For more information, or to view the hearing, please visit energycommerce.house.gov.


Upcoming: Senate HELP Subcommittee to Hold Hearing on Rising Generic Drug Prices

On Nov. 20 at 1:00 p.m. in Dirksen Senate Office Building, the Senate Committee on Health, Education, Labor and Pensions Subcommittee on Primary Health and Aging will hold a hearing to investigate recent price hikes for some generic drugs used to treat everything from common medical conditions to life-threatening illnesses and to identify measures to help reduce costs for patients, health care providers and hospitals across the country. The hearing, entitled "Why Are Some Generic Drugs Skyrocketing In Price?," also comes at a time when price hikes for generic drugs are under scrutiny by the U.S. Department of Justice; subpoenas were issued earlier this month to two generic drug makers seeking information about their interactions with competitors. In a press release, Subcommittee Chairman Bernie Sanders said, "It is unacceptable that Americans pay, by far, the highest prices in the world for prescription drugs. Generic drugs were meant to help make medications affordable for the millions of Americans who rely on prescriptions to manage their health needs and now some of them are becoming unaffordable." Rep. Elijah Cummings (D-MD), Ranking Member of the House Oversight and Government Affairs Committee, who has worked with Sen. Sanders on this issue, will also take part in the Nov. 20 hearing. In Oct. both members sent letters to executives of 14 pharmaceutical companies as part of their investigation.

For more information, or to view the hearing, please visit help.senate.gov.


CMS Releases Final Dialysis Facility Rating Program Methodology

On Nov. 7, the Centers for Medicare & Medicaid Services (CMS) released a fact sheet containing its final methodology for the Dialysis Facility Compare (DFC) Star Rating program. Based on accountability provisions implemented through the Affordable Care Act, CMS is adding Star Ratings to its "Compare" websites with the goal of improving the salience and usability of comparative quality information for consumers. The DFC programs ratings are based on 9 of the 11 publicly reported quality measures, including Standardized Mortality Ratio, Standardized Hospitalization Ratio and Standardized Transfusion Ratio, among others. CMS delayed rollout of the Star Ratings on DFC from October 2014 until January 2015 in order to allow for additional consideration of stakeholder comments and to consider modification of the methodology. Also included in the release was a preview of ratings given to individual Medicare-participating dialysis facilities; individual facilities will have 15 days to review their scores before they are posted on Dialysis Facility Compare in January 2015. Moreover, facilities will have the opportunity to submit questions about their ratings if they believe their ratings are inaccurate. CMS also anticipates applying Star Ratings to Home Health Compare and Hospital Compare beginning in 2015.

CMS Awards $3.9 Million to Improve Health Care Quality for American Indian and Alaska Native Children

The Centers for Medicare and Medicaid Services announced in a Nov. 12 press release that it will award $3.9 million in grants to support Medicaid and Children's Health Insurance Program (CHIP) outreach and enrollment efforts for eligible American Indian and Alaska Native children. The grant awards, which will fund activities to engage schools and tribal agencies in outreach and enrollment, will be awarded to Indian Health Services, tribes, tribal organizations and urban Indian organizations located in seven states: Alaska, Arizona, California, Mississippi, Montana, New Mexico and Oklahoma. In particular, several grantees will receive funds to conduct activities focused on helping eligible teens enroll in coverage. Since 2009, the United States has made substantial progress toward reducing the number of children who remain uninsured, and toward providing health coverage to all children who are eligible for Medicaid and CHIP. Despite this significant progress, serious health coverage disparities persist, particularly for American Indian and Alaska Native children. Research shows that eligible American Indian and Alaska Native children are less likely to participate in Medicaid and CHIP and more likely to be uninsured compared with all children. Grantees will work to ensure that eligible children retain coverage for as long as they qualify and will help guide families through the application process for Medicaid and CHIP.

HHS Releases Estimated 2015 ACA Enrollment

According to a Nov. 10 issue brief released by the HHS Office of the Assistant Secretary for Planning and Evaluation (ASPE), using a bottom-up approach to project 2015 enrollments, which incorporates data from the first open enrollment period and recent population surveys of insurance coverage, HHS estimates between 9.0 and 9.9 million individuals will be enrolled in ACA health exchange coverage in 2015. The estimate falls considerably short of the 13 million enrollees projected by the Congressional Budget Office (CBO) in a report issued in April 2014. The report notes the impact of differing assumptions and methodologies employed by CBO as part of the reason for the discrepancies. For example, CBO assumes that enrollment will ramp up to a steady state over three years, ultimately reaching 25 million, whereas HHS, citing experience with the Children's Health Insurance Program (CHIP) and early Medicaid expansions, assumes that a steady state of enrollment could take as much as five years. For more information, please visit aspe.hhs.gov.

CMS Releases Notice on Pilot Study Requiring Pre-Authorization for Non-Emergency Ambulance Services

In a notice published in the Federal Register on Nov. 14, the Centers for Medicare and Medicaid Services (CMS) announced that it will require prior authorization in three states for non-emergency ambulance services that are typically covered by Medicare starting Dec. 1 for transports occurring on or after Dec. 15, 2014. Three states, New Jersey, Pennsylvania and South Carolina, all of which have experienced high levels of improper payments for repetitive non-emergency ambulance services, were chosen as a pilot study group to test the new prior-authorization model. "We plan to test whether prior authorization helps reduce expenditures, while maintaining or improving quality of care, using a model that would establish a prior authorization process for repetitive scheduled nonemergent ambulance transport to reduce utilization of services that do not comply with Medicare policy," the CMS said. CMS plans to implement the Medicare Prior Authorization process for three years, and believes using a prior authorization process will help ensure services are provided in compliance with applicable Medicare coverage, coding and payment rules before services are rendered and claims are paid.

HHS to Pull Proposed 340B Rule for OMB Review; Instead Will Issue Guidance in 2015

The Department of Health and Human Services (HHS) posted a notice Nov. 14 that it has decided to withdraw an "omnibus" proposed rule that was under review at the White House Office of Management and Budget (OMB); instead, the agency "plans to issue a proposed guidance for notice and comment that will address key policy issues raised by various stakeholders committed to the integrity of the 340B program. The agency also is planning to issue proposed regulations where the statute provides explicit rulemaking authority, pertaining to civil monetary penalties for manufacturers, calculation of the 340B ceiling price, and administrative dispute resolution," Martin Kramer, Director of Communications at HHS Health Resources and Services Administration (HRSA), said. The decision comes after a recent court ruling against another 340B rule challenged by the pharmaceutical industry. Under the 340B program, drug manufacturers provide discounts between 20 percent and 50 percent on certain outpatient drugs to hospitals that serve large numbers of low-income and uninsured patients. The savings and revenue generated by the discounts can be used to improve patient care, including the addition of new services. Hospitals can decide for themselves how to use the discounts; the drug industry has called for rules requiring providers to demonstrate that 340B savings are being used directly to treat the patient populations that qualified them for the program.

CMS Releases Updated Fact Sheet on Performance of ACOs

On Nov. 7, the Centers for Medicare and Medicaid Services (CMS) released an updated fact sheet noting that accountable care organizations (ACOs) generated more than $417 million in annual savings for Medicare. CMS defines ACOs as groups of doctors, hospitals and other health care providers who come together voluntarily to give coordinated high-quality care to their Medicare patients. The MSSP is a program for Medicare fee-for-service providers. The Pioneer ACO program is administered under the agency's Center for Medicare and Medicaid Innovation and is designed for health care organizations and providers that have experience coordinating care for patients across care settings. In the revised document, CMS provides updated financial information from a previously released fact sheet from Sept. 17 showing that the Pioneer ACO Model and Medicare Shared Savings Program (MSSP) generated more than $372 million in annual program savings for Medicare. The updated fact sheet provides information from 16 additional MSSP ACOs that wasn't included in the September financials. Other updates to the data include the addition of five first-year MSSP ACOs (total 58 MSSP ACOs) spending $705 million below their targets and earned performance payments of more than $315 million as their share of program savings. The 23 Pioneer ACOs in their second year of performance and the 220 MSSP ACOs in their first year of performance qualified for shared savings payments of $460 million, up from the $445 million the CMS reported in September. Since passage of the ACA, more than 360 Medicare ACOs have been established, serving over 5.6 million Americans with Medicare. Medicare ACOs are groups of providers and suppliers of services that work together to coordinate care for the Medicare fee-for-service (FFS) beneficiaries they serve and achieve program goals; Medicare ACOs choose a level of performance risk and receive financial incentives based on that choice and their quality performance.

CMS to Begin Process for Covering New Types of Speech-Generation Devices

After strong pushback from ALS patients and lawmakers on Capitol Hill, the Centers for Medicare and Medicaid Services (CMS) has reversed a decision Nov. 6 that could have blocked Medicare reimbursement for certain speech-generation devices beginning Dec. 1; specifically, CMS "has issued instructions to contractors to rescind the [Feb. 27] coverage reminder and coding verification for speech generating devices. [CMS] expect[s] beneficiaries to continue to have access to this critical technology." CMS said it is reconsidering its position to not pay for the devices if they incorporate features other than face-to-face communication; the announcement could open a benefit category determination for devices to reflect advances in technology, such as the use of speech devices that generate text and email communications with doctors. Patients now have until Dec. 6 to submit comments to CMS to keep paying a portion of the devices, which typically cost between $7,000-14,000. The agency said it expects to issue a proposed decision memo by May 1, 2015, and a final national coverage decision by the end of July 2015. Speech-generation equipment is critically important to patients with ALS and similar neurodegenerative disorders -- conditions that limit their capacity for movement and speech. Patients, since 2001, have had the option of paying for upgrades themselves, including those that enable them to connect to the Internet and open doors or adjust room temperatures.


New Jersey State Assembly Passes Physician-Assisted Suicide Legislation

On Nov. 13, the New Jersey State Assembly approved a bill that would allow physicians to prescribe life-ending drugs to terminally ill patients. The 41-31 vote came after the measure was pulled from consideration in June. The legislation, which would be applicable to patients with a prognosis of six months or less to live, establishes a formal procedure for the terminally ill to request to end their lives and would also require a second doctor's opinion to certify the original terminal diagnosis and confirm the patient is capable of making the decision to die, without pressure from others. Modeled after an assisted suicide law instituted in Oregon in 1994, the law requires the attending physician to offer the patient a chance to rescind their request. "This discussion is about revisiting a statute last looked at in 1978 that never took into account an individual's right to control their body and their circumstances," said Assemblyman John Burzichelli, one of the bill's co-sponsors. "Like society, medicine, palliative care and hospice services have changed dramatically since then. While there are many choices available right now that may be right for certain people, there is one more choice, not currently available, that deserves an honest discussion." The measure would next have to be passed by the state senate; Gov. Chris Christie has said he opposes the measure.

Arizona Becomes Fifth State to Enact "Right to Try" Law

On Nov. 4, Arizona voters approved Proposition 303, which would allow terminally ill patients the right to try investigational medicines that are in the early stages of clinical trials. The measure is similar to other "Right to Try" laws passed in Colorado, Louisiana, Michigan and Missouri, though Arizona is the first state to pass the measure by voter initiative. Critics of "Right to Try" laws, which include pharmaceutical manufacturers, claim exposure to unapproved treatments puts patient safety at risk and can disrupt the drug development process. Under the Arizona law, patients would need approval from the drug's manufacturer and a doctor's prescription. For more information, please visit www.washingtonpost.com.


Basic Health Program; Federal Funding Methodology for Program Year 2016

On Oct. 21, CMS issued a proposed rule outlining the agency's methodology for determining federal payment amounts to states that establish a Basic Health Program (BHP) for 2016. Under the proposed methodology, in determining the federal BHP payment amount, CMS will take into account the age and income of the enrollee, whether the enrollment is for self-only or family coverage, geographic differences in average spending for health care across rating areas, the health status of the enrollee for purposes of determining risk adjustment payments and reinsurance payments that would have been made if the enrollee had enrolled in a qualified health plan through an Exchange, and whether any reconciliation of the credit or cost-sharing reductions would have occurred if the enrollee had been so enrolled. The proposed payment methodology takes each of these factors into account. In addition, the proposed methodology that is the same as the 2015 payment methodology, with updated values but no changes in methods. States that elect to operate a BHP will make affordable health benefits coverage available for individuals under age 65 with household incomes between 133 percent and 200 percent of the FPL who are not otherwise eligible for Medicaid, the Children's Health Insurance Program (CHIP) or affordable employer-sponsored coverage. Comments are due Nov. 24. CMS plans to issue a final notice by February.

CMS Releases Proposed Rule on Revised Conditions of Participation for Home Health Agencies

The Centers for Medicare & Medicaid Services (CMS) released a proposed rule on Oct. 6 revising and modernizing the current conditions of participation for home health care agencies that want to take part in the Medicare and Medicaid programs. The CMS rule, published in the Federal Register on Oct. 7, "reflects the most current home health agency practices by focusing on the care provided to patients and the impact of that care on patient outcomes. This proposed regulation focuses on assuring the protection and promotion of patient rights; enhances the process for care planning, delivery, and coordination of services; streamlines regulatory requirements; and builds a foundation for ongoing, data-driven, agency-wide quality improvement." Specific new provisions in the proposed rule include patients' rights measures, coordination of services and quality of care measures utilizing an interdisciplinary team approach, quality assessment and performance improvement (QAPI) measures, and infection prevention and control measures, among others. Comments on the proposed rule are due to CMS by Dec. 8, 2014.

OIG Proposed Rule Would Expand Medicare Anti-Kickback Statute Safe Harbors

The Department of Health and Human Services Office of the Inspector General (OIG) released a proposed rule (RIN 0936-AA06) on Oct. 2 that would add new safe harbors to the anti-kickback statute covering some Medicare Part D activities and expand the list of conduct exempted from civil monetary penalties (CMPs). The proposed rule would cover a variety of behaviors, including: pharmacy cost-sharing waivers for impoverished Medicare Part D beneficiaries; cost-sharing waivers for emergency ambulance services offered by state or municipal-owned organizations; manufacturer discounts for drugs provided through the Medicare Coverage Gap Discount Program; and certain interactions between Medicare Advantage plans and federally qualified health centers (FQHCs). Lewis Morris, former chief counsel to the OIG, said the rule illustrates that the "inspector general is really working hard to find ways to promote quality of care in an integrated delivery system while still protecting the integrity of the program and its beneficiaries." Comments on the proposed rule are due Dec. 2.

CMS Releases Final Rule for Medicare Program: Physician Fee Schedule OPPS, ASC Payments, End-Stage Renal Disease

On Oct. 31, the Centers for Medicare and Medicaid Services (CMS) released its final rule for CY 2015 Medicare reimbursement payments to physicians and non-physician practitioners, hospital outpatient departments (OPPS), ambulatory surgical centers (ASCs), and home health agencies and dialysis facilities that treat patients with end-stage renal disease. Specifically, the CY 2015 OPPS/ASC final rule with comment period updates Medicare payment policies and rates for hospital outpatient department and ASC services and partial hospitalization services provided by community mental health centers (CMHCs), and refines programs that encourage high-quality care in these outpatient settings. In CY 2015, CMS is implementing a policy finalized last year regarding comprehensive Ambulatory Payment Classifications (C-APCs), with some refinements and updates.


Overall OPPS payments are expected to increase by 2.3 percent for CY 2015. Also noteworthy in the rule, CMS has finalized a proposal to package prosthetic supplies as it does implantable prosthetic devices, and all other supplies in the OPPS when used in conjunction with a surgical or other procedure. Other significant OPPS payment modifications addressed in the statute include reimbursements for skin substitutes, off-campus provider-based departments, hospital outpatient outlier payments, community mental health center outlier payments, ancillary services and Part B drugs in the outpatient department.

ASC Payment Updates

For CY 2015, ASC payments will increase by 1.4 percent, accounting for the MFP-adjusted CPI-U update factor, which accounts for inflation.

Partial Hospitalization Program (PHP) Rates

CMS will update the two payment rates for CMHCs and the two payment rates for hospital-based PHPs. For community health centers the final CY 2015 APC geometric mean per diem cost will be $100.15 for Level I (three services) and $118.54 for Level II (four or more services). For hospital-based PHPs, the final CY 2015 APC geometric mean per diem cost will be $185.87 for Level I and $203.01 for Level II.

End-Stage Renal Disease

The finalized provisions in End-Stage Renal Disease (ESRD) Prospective Payment System rule introduce new quality and performance measures for outpatient dialysis facilities; moreover, the rule incorporates in 2017 a Standardized Readmission Ratio, which assesses the rate at which ESRD dialysis patients return to an acute care hospital within 30 days of discharge from an acute care hospital.

Other Policy Changes

CMS has finalized an internal process, to be used in limited circumstances, that will allow CMS to recover overpayments from erroneous payments made by Medicare Advantage (MA) organizations or Part D prescription drug plan sponsors; CMS has also finalized an appeals process for MA organizations and Part D sponsors to seek review of CMS' determination that the payment data are erroneous. The appeals process will have three levels of review that would include reconsideration, an informal hearing and an Administrator review.

CMS also finalized a proposal that requires the physician certification only for outlier cases and long-stay cases of 20 days or more. A hospital admission order will continue to be required for all inpatient admissions when a patient has been formally admitted as an inpatient of the hospital.

The final rule is slated to be published in the Federal Register on Nov. 6. The provisions in the rule will generally take effect on Jan. 1, 2015, and the public comment period will close on Dec. 30, 2014.

More information on the rule can be found in a CMS factsheet that accompanies the rule's release.


OIG Report: CMS Needs to Do More to Bolster Utilization of Free Preventative Wellness Exams for Children on Medicaid

In a report released Nov. 13 by the Department of Health and Human Services Office of the Inspector General (OIG), the agency found that millions of low-income children are missing the free preventive exams and screenings (regular wellness exams, dental checkups and vision and hearing tests) guaranteed by Medicaid, and that the Centers for Medicare and Medicaid Services (CMS) could do more to address the issue. Specifically, the report describes the steps that CMS has taken since the OIG's 2010 report to encourage children's participation in EPSDT screenings and to ensure that providers deliver complete medical screenings. New OIG data found that only 63 percent of children enrolled in Medicaid received at least one medical screening in 2013, up from 56 percent in 2006, and far below the department's 80 percent goal. Of the specific state case studies investigated, OIG data showed that only Iowa and California exceeded that standard last year, with 81 percent and 99.7 percent, respectively, whereas Alaska and Ohio were below 40 percent, and five more states -- Mississippi, Montana, North Dakota, Oregon and Wyoming -- were between 40 and 45 percent. The report reaffirmed four recommendations previously released in the 2010 report including that CMS requires states to report vision and hearing screenings, bolster collaboration measures between states and providers on developing strategies for education and incentives programs for beneficiary participation in EPSDT screenings, and disseminate information on state best practices to improve participation. CMS did not respond to OIG's report.

CDC: Tobacco Use Among Middle and High School Students -- United States, 2013

According to a report issued Nov. 14 by the Centers for Disease Control and Prevention, among U.S. youths cigarette smoking has declined in recent years; however, the use of some other tobacco products has increased, and nearly half of tobacco users use two or more tobacco products. CDC analyzed data from the 2013 National Youth Tobacco Survey to determine the prevalence of use of one or more of 10 tobacco products among U.S. middle and high school students. This report summarizes the results of that analysis. In 2013, 22.9 percent of high school students reported current use of a tobacco product, including 12.6 percent who reported current use of two or more tobacco products. Among all high school students, cigarettes (12.7 percent) and cigars (11.9 percent) were the most commonly reported tobacco products currently used, followed by smokeless tobacco (5.7 percent), hookahs (5.2 percent), e-cigarettes (4.5 percent), pipes (4.1 percent), snus (1.8 percent), kreteks (0.8 percent), bidis (0.6 percent) and dissolvable tobacco (0.4 percent). The National Youth Tobacco Survey is a cross-sectional, school-based, self-administered, pencil-and-paper questionnaire given to U.S. middle school (grades 6-8) and high school (grades 9-12) students. Information is collected on tobacco control outcome indicators to monitor the impact of comprehensive tobacco control policies and programs and regulatory authorities of the Food and Drug Administration (FDA).

Compounded Drugs: Payment Practices Vary Across Public Programs and Private Insurers, and Medicare Part B Policy Should Be Clarified

According to a GAO report released Nov. 10, the Centers for Medicare & Medicaid Services (CMS) -- the agency within the Department of Health and Human Services (HHS) responsible for administering the Medicare program -- has a national payment policy for compounded drugs under Medicare Part B, but this policy is unclear. The policy generally states that drugs must be FDA approved to be paid for under Medicare. Payment may be available for compounded drugs, but the policy does not stipulate whether payment is available for ingredients that are bulk drug substances, which are generally not FDA approved. CMS contractors who process Part B claims do not collect information on the FDA-approval status of drug ingredients and, therefore, may be paying for ingredients that are not FDA-approved products. Thus, it is uncertain whether Medicare payments are inconsistent with Part B policy. GAO recommends that CMS clarify its Medicare Part B payment policy to either allow or restrict payment for compounded drugs containing bulk drug substances and align payment practices with this policy. HHS disagreed with this recommendation, stating that the Part B payment policy does not depend on drug ingredients.

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The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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