The monthly healthcare wrap-up: May 2018

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CMS proposes FY 2019 Medicare payment rules

The Centers for Medicare & Medicaid Services (CMS) released several proposed Medicare payment rules earlier this month that impact a wide range of providers and facilities including long-term care hospitals, skilled nursing facilities, inpatient rehabilitation facilities, inpatient psychiatric facilities and hospice providers. For some, the agency proposed increasing payment rates by as much as 2.4 percent in FY 2019. The rules also propose adapting certain quality reporting programs and measures to reward providers for their use of technology and commitment to interoperability across the care continuum as well as relieve some of their administrative burdens. 

View an in-depth look at the proposed Medicare changes >

Congressional committees approve dozens of bills to address opioid crisis

The House Energy and Commerce Committee and the House Ways and Means Committee approved nearly 40 bills combined that could address the nation’s opioid crisis in a myriad of ways.

  • The drug prescription process:
    • One bill requires CMS to establish thresholds for overprescribing physicians—based on specialty and region—and notify the provider of his or her status
    • Another requires Medicare providers to integrate a prescription drug monitoring program into their clinical workflow
  • The Medicare payment system:
    • One bill requires the Department of Health and Human Services (HHS) Secretary to ensure the Medicare outpatient prospective payment system does not incentivize the use of opioids over non-opioid-based treatments
    • Another requires the Medicare Payment Advisory Commission (MedPAC) to detail how it pays for pain management treatments—in both inpatient and outpatient settings—in a report to Congress
  • These bills’ approval occurred soon after the Centers for Disease Control and Prevention (CDC) announced a 15 percent increase in opioid overdose deaths from the previous 12-month period
  • The bills also follow last month’s approval of the Opioid Crisis Response Act of 2018 by the bipartisan Senate health committee, which contained a variety of proposed solutions that include restructuring state grants to increase addiction treatment and better utilizing prescription drug monitoring programs

CMS turns to value-based purchasing, drug costs to reduce spending

CMS Administrator Seema Verma announced earlier this month that the agency aims to reduce healthcare spending through initiatives that encourage value-based purchasing, lessen administrative burdens and decrease prescription drug costs.

  • The agency plans to develop alternative payment models that would push providers to compete for patients using both prices and care quality data and would move away from paying for volume
  • Verma announced a renewed commitment to reducing administrative burdens on hospitals and providers through initiatives such as allowing medical student notes to be eligible for Medicare billing purposes in certain situations
  • The agency may also be pushing for more site-neutral payments for prescription drugs to decrease spending in the future
  • Verma stated that on our current path, the U.S. will spend one in five dollars on healthcare by 2026

HRSA proposes delaying 340B drug pricing rule for fifth time

The Health Resources and Service Administration (HRSA) proposed delaying the implementation of a 2017 final rule that would impose a $5,000 penalty on drug manufacturers that knowingly and intentionally charge hospitals more than an outpatient drug’s ceiling price for drugs covered by the 340B Drug Pricing Program.

In response, American Hospital Association (AHA) Executive Vice President Tom Nickels stated: “We urge the agency to implement this final rule without any further delay to shine needed light on drug company price increases. The irony is not lost on us that drug companies continue to push for increased reporting for hospitals and others while resisting any transparency on their part.”

  • The final rule also forces drug manufacturers to charge $0.01 for each unit of 340B drug when its ceiling price is $0
  • HRSA initially planned to implement the final rule on March 6, 2017; however, it was delayed four times to give stakeholders additional time to prepare and in response to the Trump Administration’s regulatory freeze
  • HRSA now claims the proposed delay in implementation gives HHS more time to reform the 340B Drug Pricing Program

CMS announces first rural health strategy in its history

Earlier in the month, CMS released a strategy focused on improving the quality and cost of healthcare for the roughly 60 million Americans living in rural areas of the country. This plan aims to empower both patients and providers by the use of technology:

  • For Patients:
    • The strategy emphasizes the use of telemedicine to better connect patients and providers more efficiently
    • It also states CMS will develop comprehensive materials to educate patients regarding their insurance coverage and how to navigate the healthcare system
  • For Providers:
    • CMS will offer technical assistance to physicians to ensure their participation in the agency’s programs as well as the programs’ effectiveness in rural areas
    • It will also review its quality measures to align with the needs of rural communities and provide optimal value to the patients and providers there
  • The Technology:
    • CMS plans to encourage the use of telehealth by mitigating current barriers to implementation, such as cross-state licensure issues and financial burdens
    • The agency also stated it would work with the Office of the National Coordinator for Health IT (ONC) to increase interoperability among healthcare facilities in rural areas

MedPAC adds new members from Geisinger and HCA Healthcare

The U.S. Government Accountability Office announced that this fall, five new members will join MedPAC, which advises both CMS and Congress on matters concerning Medicare. Four current MedPAC members will leave the commission as their terms expire. MedPAC’s five new members will be:

  • Dr. Jonathan Perlin, chief medical officer of HCA Healthcare, the Nashville-based operator of more than 250 healthcare facilities in 20 states and the United Kingdom. Dr. Perlin has also served as the Under Secretary of Health for the U.S. Veterans Affairs Department
  • Dr. Jaewon Ryu, chief medical officer of the Pennsylvania-based Geisinger health system, which is also a leading research facility and the operator of a large electronic health record (EHR) database
  • Dr. Karen DeSalvo, professor of medicine and population health at the Dell Medical School at the University of Texas in Austin. She previously served as acting Assistant Secretary for Health in HHS under the Obama administration
  • Marjorie Ginsburg, the founder of Center for Healthcare Decisions, a think tank based in California
  • Dr. Jonathan Jaffery, professor of medicine at the University of Wisconsin School of Medicine and Public Health in Madison

For more information on this topic, or to learn how Baker Tilly healthcare specialists can help, contact our team.