United States: Washington Healthcare Update - September 28, 2015

Last Updated: October 5 2015
Article by Stephanie A. Kennan, Charlyn A. Iovino and Amanda Anderson

This Week: Senate Judiciary Committee Hearing Focuses on Health Insurers Merger... Arkansas to Delay Setting Up Its Own State Exchange...The Centers for Medicare and Medicaid Services (CMS) Announces Medicare Advantage Premium Rates and Costs for 2016

1. Congress


House Energy and Commerce Oversight Subcommittee to Hold Hearing on State Exchange Marketplaces

The House Energy and Commerce Subcommittee on Oversight and Investigations, chaired by Rep. Tim Murphy (R-PA), will hold a hearing on Sept. 29 entitled "ACA Overdue Checkup: Examining the ACA's State Insurance Marketplaces." Subcommittee members will hear testimony from various state officials about their experiences working with the Administration to implement the Affordable Care Act (ACA). This hearing was postponed in July due to a scheduling change in the House of Representatives. The hearing will be held at 10 a.m. in Room 2123 of the Rayburn House Office Building.

Witness List

Peter V. Lee
Executive Director
Covered California
State of California

Jim Wadleigh, Jr.
Chief Executive Officer
Access Health CT
State of Connecticut

Jeff M. Kissel
Executive Director
Hawaii Health Connector
State of Hawaii

Louis Gutierrez
Executive Director
Massachusetts Health Connector
State of Massachusetts

Allison O'Toole
Interim Chief Executive Officer
State of Minnesota

Patrick Allen
Department of Consumer and Business Services
State of Oregon

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

133 House Members Send Letter to the Centers for Medicare and Medicaid Services (CMS) on Proposed Rule on Value-Based Payment System for Home Health Agencies

One hundred thirty-three House lawmakers sent a letter to CMS on Sept. 18 concerning the proposed Medicare Home Health Prospective Payment System rule that is expected to take effect on Jan. 1, 2016, in Arizona, Florida, Iowa, Maryland, Massachusetts, Nebraska, North Carolina, Tennessee and Washington. Lawmakers are asking CMS to reconsider about the 1.72 percent home health payment cuts slated to occur in both 2016 and 2017, and in particular to reconsider the cuts' impact on small and rural providers. Lawmakers argue that the cuts are based on case mix data that is out of date. They also claim that CMS's home health value-based payment program (HHVBP) incentive/penalty payment range of 5 to 8 percent (over a five-year period) is too much too quickly. Lawmakers are asking CMS to consider a more reasonable implementation schedule for the HHVBP, particularly given that there are 25 quality measures used to determine the penalty/incentive payments.

Bipartisan House Letter Applauds Centers for Medicare and Medicaid Services' (CMS) "Appropriate Use" Criteria Decision on Advanced Imaging Services

Rep. Michael Burgess (R-TX) and a bipartisan group of 28 other House members sent a letter to CMS on Sept. 18 in support of the framework that CMS has proposed in the definition of "provider-led entities" for the purpose of implementation of appropriate use criteria (AUC) requirements for advanced imaging services, such as CT scans or MRIs.

Section 218 of the Protecting Access to Medicare Act of 2014 requires that ordering physicians must consult with applicable AUC requirements before referring a Medicare beneficiary for an advanced imaging service. In determining which clinical guidelines will qualify as applicable AUC, CMS is directed to identify evidence-based AUC that are developed or endorsed by national professional medical specialty societies or other provider-led entities, such as the American College of Radiology or the American Academy of Family Physicians. They argue that it is more appropriate to have provider groups developing the AUC qualifications than not-for-profit benefit managers, prior authorization managers or the federal government.

Bipartisan House Letter Critiques Centers for Medicare and Medicaid Services' (CMS) Attempts at Modifying the Physician Self-Referral Law

Reps. Charles Boustany (R-LA) and Ron Kind (D-WI) sent a letter to the CMS on Sept. 21 that critiques CMS's efforts to address issues in the Stark Law, which prevents doctors from referring Medicare or Medicaid beneficiaries to entities with which they have a financial interest or familial relationship. Hospitals have voiced concerns that the Stark Law could impose large penalties on providers for harmless and technical violations.

Representatives Boustany, Kind, Bucshon (R-IN) and Veasey (D-TX) introduced legislation in February that would limit the penalty a hospital can suffer under the Stark Law governing physician self-referral for Medicare and Medicaid patients. This bill is designed to protect hospitals that have an unwritten, unsigned or lapsed agreement that is otherwise compliant with a federal fraud and abuse law, and would create an expedited process for the disclosure and resolution of these technical violations by the Centers for Medicare and Medicaid Services (CMS).

The letter states that CMS's modifications to its regulations to implement the Stark Law, which were proposed as part of the 2016 physician fee schedule, do not give enough certainty for providers when it comes to resolving their technical violations. The lawmakers say their legislation is more practical than what CMS has proposed in the rule, because it would let state contract law principles serve as guidance for what counts as a valid written arrangement under the Stark Law.

House Letter Calls for Implementation Delay of Centers for Medicare and Medicaid Services' (CMS) Proposed Comprehensive Care for Joint Replacement (CCJR) Model

Led by Rep. Tom Price (R-GA), 60 House members sent a bipartisan letter to Acting CMS Administrator Andy Slavitt on Sept. 18 calling for at least a one-year delay of CMS's proposed new bundled payments program for hip and knee surgeries.

Lawmakers are concerned about the effect of the model on, among other issues: hospital consolidation and vertical integration; access to care for patients requiring higher-cost complex surgeries; added administrative and oversight responsibilities for small and rural hospitals; the shrinking network of post-acute care providers available to hospitals associated with the mandated use of electronic health records (EHRs) by providers; and the limits on total amount of gainsharing payments to providers, physician groups, etc. The CCJR proposed payment model would be a significant change for beneficiaries and providers because it constitutes the first mandatory Medicare episode payment model promulgated under CMS's Centers for Medicare and Medicaid Innovation (CMMI) authority. CMS announced a start date of the CCJR program is Jan. 1, 2016, but the proposal has not yet been finalized.

Possible Government Shutdown on Sept. 30

The Senate is poised to pass a clean continuing resolution on Monday, with no defunding of Planned Parenthood after the Senate failed to pass a CR defunding Planned Parenthood on Thursday. The Senate CR would fund the government through Dec. 11. While the House's next steps are still uncertain, Speaker Boehner's announced retirement would seem to clear a pathway for him to attempt to make a deal with his far-right members, and should that fail, then make a deal with the House Democrats. The threat of a government shutdown seems less likely than it did earlier in the week, but time is running out. The fiscal year ends on Wednesday, Sept. 30.


Senate Judiciary Committee Hearing Focuses on Health Insurers Merger

The Senate Committee on the Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights held a hearing Sept. 22 entitled "Examining Consolidation in the Health Insurance Industry and its Impact on Consumers." At the hearing CEOs for Aetna and Anthem, two of the nation's largest health insurers, testified to Subcommittee members that consumers would benefit if the federal government approved their plans to acquire two other big insurers, Humana and Cigna, respectively. Mark Bertolini, CEO of Aetna, told the senators that "robust choice and competition will remain in the Medicare market" even after Aetna buys the nation's second-largest provider of Medicare Advantage plans. Joseph Swedish, CEO of Anthem, said consumers would benefit from expanded access to care in its combination with Cigna.

Other witnesses representing consumer advocate groups and provider groups testified that insurance industry consolidation decreases competition and leads to higher premiums and out-of-pocket expenses for consumers. Subcommittee Chair Mike Lee (R-UT) noted that he was determined to find out why "the insurance industry is rapidly consolidating." The Subcommittee's Ranking Member, Amy Klobuchar (D-MN), said she wanted to know "whether the claims of consumer benefits, corporate efficiency and lower costs are realistic."

Witness List

Mr. Mark T. Bertolini
Chairman and Chief Executive Officer
Aetna, Inc.

Mr. Joseph R. Swedish
President and Chief Executive Officer
Anthem, Inc.

Dr. Paul Ginsburg
Norman Topping Chair in Medicine and Public Policy
University of Southern California

Dr. Leemore S. Dafny
Herman Smith Research Professor in Hospital and Health Services
Kellogg School of Management, Northwestern University

Mr. Richard J. Pollack
President and Chief Executive Officer
American Hospitals Association

Mr. George Slover
Senior Policy Counsel
Consumer Union

For more information or to view the hearing visit judiciary.senate.gov.

Senate Democrats Introduce Another Affordable Care Act (ACA) Cadillac Tax Repeal Bill

On Sept. 24, Sen. Bernie Sanders (I-VT), Sen. Sherrod Brown (D-OH) and 10 other Democratic senators introduced legislation, S.2075, to repeal the Cadillac tax on high-cost employer-sponsored health coverage. The Affordable Care Act (ACA) imposes a 40 percent "Cadillac" non-deductible excise tax on health plans with values exceeding $10,200 in coverage for individuals and $27,500 for families. The tax, which takes effect in 2018, is indexed to inflation and will rise automatically over time, with the potential to eventually affect all employer-sponsored plans. The tax was originally designed to put downward pressure on healthcare costs and payroll taxation. Sens. Dean Heller (R-NV) and Martin Heinrich (D-NM) introduced their own bipartisan repeal proposal for the Cadillac tax. A pay-for has not been offered for either proposal. There are two bills in the House of Representatives calling for repeal that have a total of 288 cosponsors.

2. Administration

Precision Medicine Working Group Releases Implementation Report; Proposal Utilizes Health Care Provider Partnerships and Electronic Health Records for Research Cohort Development

The Precision Medicine Initiative Working Group released its recommendations for a framework proposal on Sept. 19. The Group is charged with developing a framework for creating and managing a large research cohort with data and specimens that can be accessed by all researchers, for studies to understand the variables that contribute to health and disease and ultimately to translate that knowledge into treatments tailored to individuals.

The recommendations are based on a set of high-value scientific opportunities that were identified by the Working Group following extensive stakeholder engagement. In the recommended model, Precision Medicine participants would volunteer to share core data, including their electronic health records, health survey information and mobile health data, on lifestyle habits and environmental exposures. Patient data could also be collected through mobile cellular devices, wireless health trackers and mHealth technology. In return, for enrollment in the initiative, patients will have access to their study results, along with aggregated results from all study participants, and will be provided with tools to make sense of the results.

In its report, the Working Group calls for the establishment of partnerships with health care providers and further integration of electronic health records systems to recruit patient participants and compile individual health data for the million-patient research consortium; health care provider organizations would act as, in essence, a participant's point of contact for the cohort. The Working Group also recommends the establishment of a data-sharing privacy plan, in conjunction with the development of a single electronic medical record format, to allow for seamless health data transfer between participating research groups. Other suggestions include the creation of a central biobank and operating system utilizing a central storage hub, as a means to lessen data transmission barriers among entities, and the appointment of an Initiative Director by the National Institutes of Health (NIH) to lead the effort.

The Centers for Medicare and Medicaid Services' (CMS) Mandated Provider Use of ICD-10 to Go Live Oct. 1

Oct. 1, 2015, is the day when all providers must start using a ICD-10 coding system, which has almost 70,000 codes, to describe patient visits. Currently U.S. health providers use a system called International Classification of Diseases, 9th Revision (ICD-9) with roughly 14,000 codes to designate a diagnosis.

The Centers for Medicare and Medicaid Services (CMS) previously delayed the original Oct. 1, 2014, implementation date twice. Even the threat of a government shutdown will not stop the Oct. 1 switch to ICD-10, the Centers for Medicare and Medicaid Services said. "In the event of a shutdown we will continue — and I want to be clear on this — to pay claims," promised CMS Principal Deputy Administrator Patrick H. Conway, M.D. State Medicaid agencies in California, Louisiana, Maryland and Montana have received federal waivers to use a "crosswalk" coding translation system for provider claims for the Oct. 1 transition to ICD-10 coding. Providers that cannot submit claims electronically through their own systems can download free billing software for their Medicare Administrative Contractor (MAC) at any time.

Department of Health and Human Services (HHS) Releases Final Federal Health IT Strategic Plan for 2015-2020

HHS's Office of the National Coordinator for Health Information Technology (ONC), in collaboration with over 35 federal partners, released the updated Federal Health IT Strategic Plan for 2015–2020. The plan establishes a blueprint for the federal partners to implement strategies that will support continued development of a responsive and secure health IT and information use infrastructure. The final plan reflects the input from more than 400 public comments, collaboration between federal contributors and recommendations from the Health IT Policy Committee.

The plan specifies four goals: 1) advance person-centered and self-managed health; 2) transform health care delivery and community health; 3) foster research, scientific knowledge and innovation; and 4) enhance the nation's health IT infrastructure. Over the next five years, the plan's federal partners will assess their individual and collective progress on efforts to use health IT to achieve Plan goals, including progress on the HHS Delivery System Reform initiative.

The National Coordinator for Health IT, Karen B. DeSalvo, M.D., M.P.H., M.Sc., said, "Implementing the Federal Health IT Strategic Plan over the next five years drives toward a public-private partnership to achieve interoperability and will help the nation achieve important health outcomes, while remaining flexible to the evolving nature of health care and technology."

The Centers for Medicare and Medicaid Services (CMS) Announces Medicare Advantage Premium Rates and Costs for 2016

On Sept. 21, CMS announced that Medicare Advantage premiums will remain stable in 2016 and enrollment is expected to grow for the sixth straight year to a new high. Fifty-nine percent of Medicare Advantage enrollees will not face a premium increase. CMS estimates that the average Medicare Advantage premium will decrease by $0.31 next year, from the 2015 average monthly premium of $32.91 to $32.60 in 2016.

CMS also reported that quality of care is increasing in plans. About 65 percent of Medicare Advantage enrollees are currently enrolled in plans with four or more stars for 2016, a significant increase from an estimated 17 percent of enrollees in such plans in 2009. Additionally, CMS stated, the average number of plan choices per beneficiary remains consistent in 2016 as compared to 2015 and access to supplemental benefits, such as dental and vision benefits, is growing.

The Annual Election Period for Medicare health and drug plans begins on Oct. 15, 2015, and ends Dec. 7, 2015. Plan costs and covered benefits can change from year to year.

A fact sheet detailing 2016 Medicare Advantage rate information can be found here.

U.S. District Court Rules That the Department of Health and Human Services Must Reopen the Comment Period for Medicare's Two-Midnight Rule

Federal district court Judge Randolph Moss ruled Sept. 21 that HHS has until Oct. 1 to negotiate with hospital groups a new timetable for the agency's reissue of the 2014 Medicare two-midnights hospital inpatient admissions rule. In reissuing the rule, the agency must also provide better justification for the 0.2 percent Medicare hospital payment reductions included in the rule. In his opinion brief, Judge Moss said HHS left out important information about how the agency calculated that there would be 40,000 more inpatient stays under the two-midnight policy, which was HHS's justification for a reduction in reimbursement. Although the rule has never been fully enforced, CMS announced in August that it would extend a partial enforcement delay on the two-midnight rule through the end of 2015.

In Shands Jacksonville Medical Center v. Burwell, the American Hospital Association (AHA) and its member hospitals brought the lawsuit against CMS over the 2014 cuts. AHA sued CMS again over further cuts in 2015. In its suit, AHA argued CMS cannot cut hospital payments in fiscal 2015 by incorporating arbitrary cuts from the previous year. The hospitals also refuted HHS's predictions about the two-midnight rule's $220 million costs and argued the rate cut is not needed. In the final decision, Judge Moss also determined that compelling HHS to pay back hospitals for the 2014 rate cuts would be extremely disorderly. "Although the deficiencies in the rule are serious, the Court is not convinced that they are so grave that the Secretary should be precluded from taking corrective steps with respect to the 2014 inpatient prospective payment system," the court opinion said. The judge hopes that allowing more time for stakeholders to comment on the 2014 rule will provide clarity on the issue.

The Centers for Medicare and Medicaid Services (CMS) Awards $110 Million in Grants for Patient Safety Initiatives

On Sept. 25, CMS announced awarding $110 million in Affordable Care Act (ACA) funding to 17 national, regional or state hospital associations and health system organizations to continue efforts in reducing preventable hospital-acquired conditions and readmissions. Through the Partnership for Patients Initiative — a nationwide public-private collaboration that began in 2011 to reduce preventable hospital-acquired conditions and 30-day readmissions — the second round of the Hospital Engagement Networks will continue to work to improve patient care in the hospital setting. The Department of Health and Human Services has estimated that 50,000 fewer patients died in hospitals and approximately $12 billion in health care costs were saved as a result of a reduction in hospital-acquired conditions from 2010 to 2013.

For a fact sheet on round two of the Hospital Engagement Networks, please visit cms.gov.

For more information on the Partnership for Patients Initiative, please visit: partnershipforpatients.cms.gov.

CMS Releases FAQ Guidance Documents on Hardship Exemptions for Physicians That Switch Electronic Health Records (EHR) Vendors and Decertified EHRs

In a new Frequently Asked Questions (FAQ) document released Sept. 24, CMS clarified that health care providers who switch EHR vendors during the meaningful use program year can apply for a hardship exemption to avoid penalties. The hardship exemption would be filed under "Extreme and/or Uncontrollable Circumstances hardship exception." This is an existing hardship exception. If approved, those providers will be exempt from the meaningful use cuts for the year they switch technology. The change in CMS policy is welcomed by hospitals that either must change their EHR technology platforms or would like to shift to a product that better fits their needs. The American Hospital Association (AHA) voiced support for this change in policy and has advocated for this exception since the meaningful use program began.

CMS also included an FAQ on decertified EHRs. CMS notes that if an EHR has been decertified by the agency, the technology platform can still be utilized to demonstrate meaningful use of EHRs so long as the reporting period ended before the product decertification happens. However, CMS says providers can apply for a hardship exemption if the reporting period ends after a product is decertified. The Office of the National Coordinator for Health IT (ONC) has recently decertified two versions of an EHR that 48 providers used to prove compliance with Meaningful Use Stage 1.

CMS Releases Resources for Employers with Employees Who Are Eligible for Health Coverage Under Medicare

CMS released new guidance for employers who have Medicare-eligible employees. The guidance provides clarification on who gets Medicare automatically and who needs to specifically sign up for it, when eligible employees can enroll in Medicare Part B, eligibility for those under age 65, and other special enrollment rules for those who are still working and covered by an employer.

Department of Health and Human Services (HHS) Makes Progress on Antibody Drug for Ebola Treatment

HHS announced Sept. 21 an agreement to provide funding for a new Ebola virus disease treatment based on three monoclonal antibodies. The Biomedical Advanced Research and Development Authority (BARDA) will provide up to $38 million over the next 23 months to support development as well as manufacturing of the experimental monoclonal antibody therapeutic drug for use in studies. These monoclonal antibodies bind to a key Ebola viral protein and neutralize the virus, decreasing the amount of virus in the body that the patient's immune system has to fight. The work conducted through the BARDA program will support filing of an investigational new drug application with the Food and Drug Administration (FDA). BARDA also could provide an additional $11.3 million to manufacture alternative monoclonal antibodies.

The Food and Drug Administration (FDA) Provides $19 Million in Grant Funding for Rare Disease Research Including Studies for Pediatric Treatments and Sickle Cell Disease

FDA announced that it will be funding 18 research grants (totaling $19 million) to help stimulate the development of rare disease products. These new grants were awarded to principal investigators in 10 states. The grants are intended for clinical studies evaluating the safety and effectiveness of products that could either result in, or substantially contribute to, the FDA approval of products.

The plan specifies four goals: 1) advance person-centered and self-managed health; 2) transform health care delivery and community health; 3) foster research, scientific knowledge and innovation; and 4) enhance the nation's health IT infrastructure. Over the next five years, the plan's federal partners will assess their individual and collective progress on efforts to use health IT to achieve Plan goals, including progress on the HHS Delivery System Reform initiative.

The FDA awards the grants through the Orphan Products Grants Program to encourage clinical development of drugs, biologics, medical devices or medical foods for use in rare diseases. Since its creation in 1983, the Orphan Products Grants Program has provided more than $350 million to fund more than 570 new clinical studies and supported the marketing approval of more than 50 products.

Information on the grant winners can be found here.

3. State Activities

New York Health Insurance Co-op Forced to Close Due to Loss in Revenue

Health Republic Insurance of New York becomes the fourth co-op started with Affordable Care Act (ACA) funding to announce that it will shut down. One of the largest providers of health coverage on New York's Obamacare marketplace, Health Republic Insurance of New York, announced that state and federal regulators are closing it at the end of 2015 because of revenue losses. Health Republic Insurance of New York had 200,000 customers during its first two years of operations but still managed to accumulate almost $130 million in losses (including $53.1 million in the first half 2015). The co-op plan attracted more customers than any other nonprofit startup seeded with Affordable Care Act loans. Other co-ops based in Iowa, Louisiana and Nevada will also close due to financial troubles.

Insurance Premiums to Rise on Montana Exchange

On Sept. 24, Montana Insurance Commissioner Monica J. Lindeen published the health insurance rates for the insurance sold on the state's federally run insurance marketplace in 2016. The average rate increase across all plans ranges between 22 percent and 34 percent across all companies for individuals. For small business owners, the two health insurance companies selling the most small group plans in Montana are posting average rate increases of 5.6 percent and 6.8 percent. As one of the reasons for the rate increases Insurance Commissioner Lindeen has cited "pent up demand" associated with more individuals' using the Montana medical system and getting necessary medical care that had previously been delayed. Another factor she mentioned was overcompetition for market share and the after-effects of prices being set too low in 2015 in an effort to attract customers. Montanans shopping for insurance this fall will also see the price of premiums go up as a buyer ages, with increases ranging from half a percent to 4.7 percent year to year. In addition, three private health insurance companies, Blue Cross Blue Shield of Montana, PacificSource and the Montana Health CO-OP, will be selling policies in Montana next year through the healthcare.gov website as well as off the exchange.

Still No Funding Deal in Utah Medicaid Expansion

Utah Gov. Gary Herbert (R) and state legislative leaders have yet to reach a deal with a number of health care sectors leaders on how to finance the state's Medicaid expansion proposal. The plan calls for the providers who would receive the additional Medicaid funds — hospitals, physicians, insurers and pharmaceutical manufacturers — to pay more than $50 million toward the expanded coverage for Utah residents who make up to 138 percent of the federal poverty line.

Current discussions with stakeholders have revealed that lawmakers are considering taking more than $12 million per year from doctors and having hospitals pay more than $17 million. Other expansion states have instituted fees on hospitals to help cover the cost of expansion, as they are expected to benefit from a decline in uncompensated care.

Utah has estimated it will be responsible for up to $78 million in annual expenses beginning in fiscal 2021, including $28 million for new individuals who were previously ineligible for the program. House and Senate Republicans will meet on Sept. 29 in closed-door caucuses for briefings on the expansion proposal. Through provisions in the Affordable Care Act (ACA), 31 states and the District of Columbia have expanded Medicaid.

Arkansas to Delay Setting Up Its Own State Exchange

Gov. Asa Hutchinson (R) sent a letter to Department of Health and Human Services (HHS) Secretary Sylvia Burwell saying that Arkansas will wait to set up its own state-based health insurance exchange until it better evaluates more comprehensive reforms to the state's health care system. The letter comes after the state received nearly $100 million in federal grant funding in December 2014 to set up its own exchange for the 2017 open enrollment period. In the letter, Gov. Hutchinson said he supports the small business health insurance exchange, which is nearing completion, but that he does not believe that a state exchange will be necessary for individuals as he and the legislature work to reform health care in Arkansas. This is not the first occasion he has mentioned putting a pause on the state exchange. In August, Gov. Hutchinson questioned whether the state needed to create its own fully functioning exchange to move forward with his preferred Medicaid expansion plan. His framework calls for requiring Medicaid expansion enrollees to enroll in their employer-sponsored insurance (if available to them), having beneficiaries above the federal poverty line participate in cost sharing; instituting a referral program for unemployed persons to enroll in training programs; and terminating non-emergency medical transportation. A health reform legislative task force commissioned by Gov. Hutchinson is expected to announce specific reforms by Dec. 31.

4. Regulations Open for Comment

The Centers for Medicare and Medicaid Services (CMS) Offers Long-term Care Reform Proposed Rule

In conjunction with the White House Conference on Aging, the Centers for Medicare and Medicaid Services released a long-term care reform proposed rule July 16. The rule concerns reducing unnecessary hospital readmissions and infections, and strengthening safety measures for the nearly 1.5 million residents in the more than 15,000 long-term care facilities or nursing homes that participate in the Medicare and Medicaid programs. The proposed changes include:

  • Ensuring nursing home staff is properly trained on caring for residents with dementia and in preventing elder abuse.
  • Ensuring that staff members have the right skill sets and competencies to provide person-centered care to residents.
  • Improving care planning, including discharge planning for all residents with involvement of the facility's interdisciplinary team and consideration of the caregiver's capacity, giving residents information they need for follow-up, and ensuring that instructions are transmitted to any receiving facilities or services.
  • Allowing dietitians and therapy providers the authority to write orders in their areas of expertise when a physician delegates the responsibility and state licensing laws allow.
  • Updating the nursing home's infection prevention and control program, including requiring an infection prevention and control officer and an antibiotic stewardship program.

Many of the proposals in the draft rule build on improvements that nursing homes have already made since 1991, the last time these conditions of participation were comprehensively updated. The recommended reforms were published in a proposed rule in the July 16, 2015, Federal Register. The comment period for the proposed rule ended on Sept. 14, 2015, and was reopened until Oct. 15, 2015.

Department of Health and Human Services (HHS) Proposes Updates to "the Common Rule"

HHS and 15 other agencies released a notice of proposed rulemaking Sept. 2 for the Common Rule, the existing regulatory framework to transparency and oversight for scientific research involving human subjects. The proposed changes are to address the substantial changes that have occurred within scientific research. Current regulations have been in place since 1991 and are followed by 18 federal agencies. Proposed updates to the rule include:

  • Strengthened informed consent provisions
  • Requirements for administrative or IRB review that would align better with the risks of the proposed research
  • New data security and information protection standards
  • Requirements for written consent for use of an individual's biological samples, for example, blood or urine, for research with the option to consent to their future use for unspecified studies
  • Requirement, in most cases, to use a single institutional review board for multisite research studies
  • Application of rule to clinical trials, regardless of funding source, if they are conducted in a U.S. institution that receives funding from a Common Rule agency for research involving human participants.

In July 2011, HHS issued an Advance Notice of Proposed Rulemaking to seek the public's input on updating the Common Rule. The proposed rule issued reflects input and requests comments for HHS to consider as it drafts the final rule. HHS will take public comment on the proposed rule until Dec. 7.

For a press release detailing changes to the rule visit hhs.gov.

Department of Health and Human Services (HHS) Releases Proposed Rule on Health Equity

On Sept. 3, HHS issued a proposed rule, Nondiscrimination in Health Programs and Activities, to advance health equity and reduce disparities in health care. The proposed rule establishes that the prohibition on sex discrimination includes discrimination based on gender identity. It also includes requirements for effective communication for individuals with disabilities and enhanced language assistance for people with limited English proficiency. The proposed rule applies to Health Insurance Marketplaces, any health program that HHS itself administers, and any health program or activity any part of which receives funding from HHS, such as hospitals that accept Medicare patients or doctors who treat Medicaid patients. Finally, the proposed rule extends these nondiscrimination protections to individuals enrolled in plans offered by issuers participating in the Health Insurance Marketplaces and explicitly bars any marketing practices or benefit designs that discriminate on the basis of race, color, national origin, sex, age or disability. Section 1557 of the Affordable Care Act (ACA) extended civil rights protections banning sex discrimination to health programs and activities. Previously, civil rights laws enforced by HHS's Office for Civil Rights (OCR) barred discrimination based only on race, color, national origin, disability or age. The rule will be published in the Federal Register on Sept. 8, and is open for public comment through Nov. 6, 2015.

For more information, including a fact sheet and Frequently Asked Questions, visit hhs.gov.

Internal Revenue Service (IRS) Proposed Rule Mandates Employer Health Plans Offer Hospital and Physician Services

The IRS released a proposed rule Aug. 31 that would require employer health plans to offer substantial coverage for inpatient hospital services and physician services. The Affordable Care Act requires employer health plans to be at least 60 percent of the minimum value standard. News reports uncovered the fact that employer plans could do so without providing hospital or physician coverage.

The preamble of the proposal points out that while large group plans are not required to cover the ACA's Essential Health Benefit, a plan that does not cover hospital and physician services "does not meet a universally accepted minimum standards of value expected from and inherent in any arrangement that can reasonably be called a health plan and that is intended to provide the primary health coverage for employees."

Under the proposed rule, an employer group health plan must, to meet the minimum value standard (MSV) and avoid a penalty, meet or exceed an actuarial value standard of at least 60 percent coverage including substantial coverage for doctor and hospital services. The proposed rule provides a transition period for employers that have previously offered non-compliant coverage prior to Nov. 4, 2014. The proposal aligns IRS and Department of Health and Human Services (HHS) policies. The ACA compels employers who do not meet the affordability and MSV thresholds to pay a penalty of $3,000 for each worker that receives a tax credit. The IRS proposed rule, published in the Federal Register Sept. 1, also says that any employee offered a non-compliant plan would not be prevented from receiving premium tax credits. IRS is taking comments on the proposed rule until Nov. 2, 2015.

Centers for Medicare and Medicaid Services (CMS) Issues FY 2016 Final Inpatient and Long-Term Care Hospital Policy and Payment Changes

CMS issued a final rule on July 31, 2015, to update fiscal year (FY) 2016 Medicare payment policies and rates under the Inpatient Prospective Payment System (IPPS) and the Long-Term Care Hospital (LTCH) Prospective Payment System (PPS).

For hospitals paid under the IPPS that successfully participate in the Hospital Inpatient Quality Reporting (IQR) Program and demonstrate meaningful use of certified electronic health record technology, the increase in rates is 0.9 percent. This is calculated from a hospital market basket update of 2.4 percent adjusted by -0.5 percent for multi-factor productivity and an additional adjustment of -0.2 percent in accordance with requirements of the Affordable Care Act and further adjusted by - 0.8 percent for a documentation coding recoupment adjustment required by the American Taxpayer Relief Act of 2012.

Hospitals that do not successfully participate in the Hospital IQR program and do not submit the required quality data will be subject to a one-fourth reduction of the market basket update. In addition the law required that the update for any hospital that is not a meaningful user of electronic health records will be reduced by one-half of the market basket update in FY 2016. Other payment adjustments will include continued penalties for readmissions, a continued -1 percent penalty for hospitals in the worst-performing quartile under the hospital acquired condition reduction program and continued bonuses and penalties for hospital valued-based purchasing.

Medicare Disproportionate Share Hospital (DSH) payments will also change. CMS is distributing an estimated $6.4 billion in uncompensated care payments in FY 2016, a decrease from FY 2015, which is attributable to the continued declines in the number of uninsured.

The rule contains a number of other policy changes. A fact sheet on the final rule can be found here. The final rule will be published in the Federal Register on Aug. 17, 2015. Comments may be made on the final rule and are due to CMS by Sept. 29, 2015, and the rule is effective Oct. 1, 2015.

Food and Drug Administration (FDA) Issues Final Rule to Phase Out Trans Fats

FDA issued a final rule June 16 that gives the food manufacturers three years to phase out partially hydrogenated oils (PHOs), which are still used in a wide variety of food products from microwave popcorn to cake frosting. The decision finalizes an agency determination that PHOs, the primary dietary source of artificial trans fat in processed foods, are not "generally recognized as safe" or GRAS for use in human food. Since 2006, manufacturers have been required to include trans fat content information on the Nutrition Facts label of foods. Between 2003 and 2012, the FDA estimates that consumer trans fat consumption decreased about 78 percent and that the labeling rule and industry reformulation of foods were key factors in informing healthier consumer choices and reducing trans fat in foods. Comments on the final rule are due by June 18, 2018.

More information on FDA's decision can be found in the agency's press release.

5. Reports

U.S. Census Data Shows Negligible Drop in Employer-based Coverage Rate; 10.4 Percent Drop in Individual Uninsured Rate

A data report released Sept. 16 from the U.S. Census Bureau revealed that the employer-based health insurance coverage rate only slightly decreased from 55.7 percent in 2013 to 55.4 percent in 2014, a statistically almost insignificant drop. These figures contradict what several opponents of the Affordable Care Act (ACA) have argued, prejudging that health insurance reforms would lead to a widespread drop in job-based health coverage. The Census Bureau also determined that the uninsured rate hit 10.4 percent in 2014, or the largest single-year drop on record in nearly 20 years. The percentage of people with private health insurance coverage increased in 36 states, with only one state, Massachusetts, seeing a decrease; the percentage of people covered by public health insurance increased in 36 states; the remaining 14 states did not see a statistically significant increase or decrease.

U.S. Census Bureau data showed that the largest percentage point adjustment in coverage was in the areas of direct-purchase enrollment, which increased 3.2 percentage points from 11.4 percent in 2013 to 14.6 percent of people for some or all of 2014. "In 2014, more people had private health insurance coverage (66.0 percent) than government coverage (36.5 percent)," the Census report said. "Of the subtypes of health insurance, employer-based insurance covered the most people (55.4 percent of the population), followed by Medicaid (19.5 percent), Medicare (16.0 percent), direct-purchase (14.6 percent), and military coverage (4.5 percent)." The U.S. Census Bureau's 2014 American Community Survey provides statistics on over 40 social, economic and housing topics for U.S. communities with populations of 65,000 or more.

Department of Health and Human Services Office of the Inspector General (OIG) Releases Report on Security of Centers for Medicare and Medicaid Services' (CMS) Insurance Databases

OIG released a report Sept. 18 that found that although CMS had implemented controls to secure the Multidimensional Insurance Data Analytics System (MIDAS) and consumer personally identifiable information (PII) data in the systems and databases reviewed, there are areas for improvement in its information security controls. The MIDAS is a central repository for insurance-related data for Healthcare.gov intended to provide reporting and performance metrics to the Department of Health and Human Services for various initiatives mandated by the Patient Protection and Affordable Care Act. In its study, OIG found that CMS (1) had not disabled unnecessary generic, multi-user accounts in its test environment; (2) had not encrypted user sessions; (3) had not conducted automated vulnerability assessments that simulate known attacks specific to the application or databases that support the MIDAS; and (4) used a shared read-only account for access to the database that contained the PII. OIG recommended that the agency address all of these issues.

Since OIG released the report to the agency, CMS resolved 22 high-risk health insurance data security vulnerabilities in the first week, and another 113 medium- and lower-risk issues within a month of them being identified.

6. Other

Democratic Presidential Candidate Hilary Clinton Announces Her Prescription Drug Cost Plan

Democratic presidential candidate Hillary Rodham Clinton announced on Sept. 22 her prescription drug plan to lower costs for patients. The plan would impose a $250 out-of-pocket cap on the amount patients with serious or chronic medical problems have to pay for their prescriptions. The price cap is part of Clinton's program to alter and expand the Affordable Care Act (ACA) and is modeled on state plans, such as those implemented in California and Maine. Her plan also includes the termination of a tax credit for direct-to-consumer drug advertising, the easing of regulations to allow Americans to import drugs from abroad and a new requirement that directs taxpayer-supported drug companies to invest in research and development. Other Clinton plan details include the prohibition of pay-for-delay agreements by drug manufacturers, a mandate that pharmaceutical companies provide higher drug rebates to Medicare beneficiaries at levels equivalent to rebates given to Medicaid beneficiaries, and the authorizing of the Centers for Medicare and Medicaid Services (CMS) to negotiate drug prices for Medicare program drugs. Clinton's far-reaching plan also calls for a prioritized and expedited review process for biologics with few competitors and the lowering of the biologic exclusivity period from twelve to seven years.

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