United States: Weekly Washington Healthcare Update - December 15, 2014

1. Congress

House

Bill Introduced to Strengthen FDA's Compassionate Use Program

On Dec. 8, Rep. Michael McCaul (R-TX) introduced a bill that intends to set the foundation for future reforms to the Food and Drug Administration's (FDA) Compassionate Use program by mandating that pharmaceutical companies be transparent in how they make experimental drugs available to certain patients and requiring critical assessments of the program by the Government Accountability Office (GAO) and a stakeholder task force; moreover, the bill would also require the FDA to finalize its May 2013 draft compassionate use guidance for industry and clarify how it interprets and uses adverse drug event data in compassionate use cases. H.R. 5805, the Andrea Sloan Compassionate Use Reform and Enhancement (CURE) Act, was developed on a plan outlined in a white paper released in October. "Across the United States, patients with life-threatening conditions are desperate for treatments that hold the potential to save and prolong their lives. In some extreme cases, experimental drugs or devices may be a patient's only hope when FDA-approved treatments are not available and when patients are unable to enroll in a clinical trial. The Andrea Sloan CURE Act will give patients and doctors upfront information about how to access experimental treatments and provide drug companies more certainty about the compassionate use program." Rep. McCaul said he hopes his bill will be incorporated into a more comprehensive 21st Century Cures package expected to be unveiled by the House Energy and Commerce Committee in January 2015.

House E&C Subcommittee Holds Hearing to Consider Ways to Increase Cost Savings in Medicare and Medicare

The House Energy and Commerce Subcommittee on Health held a hearing Dec. 9 to review mounting federal health spending ahead of the 114th Congress. Subcommittee members discussed the escalating spending trajectory of Medicare, Medicaid and the Patient Protection and Affordable Care Act (ACA). The subcommittee also explored opportunities for savings and policy options to strengthen the health care safety net and protect the most vulnerable patient populations. Questions from members and statements from witnesses hinted at future battles over certain provisions of the ACA, including premium assistance in the insurance exchanges and the federal matching rate paid to states as part of the expansion of Medicaid coverage. Health Subcommittee Chairman Joe Pitts (R-PA) commented, "The federal government faces enormous budgetary challenges. Our biggest challenge is mandatory spending, particularly Medicare and Medicaid, which together accounted for 25 percent of all federal spending in FY 2013. These programs need to be strengthened and modernized, not just because millions of Americans depend on them for their health care, but also because out-of-control entitlement spending is crowding out other important priorities."

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

House E&C Looks for Guidance on FDA's Regulations on Laboratory Tests for Draft of Cure Bill

The House Energy and Commerce Committee released a white paper Dec. 9 seeking stakeholder input on key issues surrounding the Food and Drug Administration's (FDA) divisive plan to regulate laboratory-developed tests (LDT); the white paper solicits ways Congress potentially could step in to shape FDA's and CMS' regulatory roles over LDTs as part of the committee's soon-to-be-released draft 21st Century Cures legislation. In July, FDA notified Congress of its plan to apply the existing medical device classification systems to LDTs and to prioritize regulation of "high-risk" tests, and the agency followed up with formal guidance in October. Of the 11 key regulatory issues addressed in the release, the committee is asking for comments on how the lines between the practice of medicine, the conduct of a diagnostic test and the manufacturing of diagnostic tests should be defined; along with what should comprise a "device" under the Food, Drug and Cosmetic Act subject to FDA regulation versus regulation by CMS. The 21st Century Cures Initiative is a multiyear, collaborative project by Committee Chairman Fred Upton (R-MI) and committee member Rep. Diana DeGette (D-CO) designed to assist in accelerating the pace of cures and medical breakthroughs in the United States in the 21st Century. Stakeholder feedback on the issues raised in the memo is due by Jan. 5, 2015.

Breast Cancer Early Detection, Newborn Screening Bills Clear House

On Wednesday, the House passed legislation, H.R. 1281, the Newborn Screening Saves Lives Reauthorization Act, which would extend through FY 2019 a grant program for screening, counseling and other services such as health professional training, related to heritable disorders that can be detected in newborns. Having already passed the Senate with amendment, the bill is cleared for President Obama's signature. And on Tuesday, another bill, H.R. 5185, the EARLY Act Reauthorization of 2014, which would extend through FY 2019 the Young Women's Breast Health Education and Awareness Requires Learning Young Act of 2009, passed the House by voice vote. The EARLY Act supports campaigns to educate the public and health care professionals about young women's breast health, research into prevention of breast cancer in young women and support for young women with breast cancer. Senate consideration is pending.

Oversight Hearing Examines ACA Implementation, Transparency

On Dec. 9, the House Oversight and Government Reform Committee held a hearing entitled "Examining ObamaCare Transparency Failures." The hearing allowed members of the committee to hear testimony regarding implementation of the ACA, particularly as it relates to recent concerns over enrollment data, and comments made by an outside consultant who assisted in the development of the health law. CMS Administrator Tavenner explained a mistake her agency made in reporting total ACA enrollment, which had double counted roughly 400,000 dental plans, and discussed her continued focus on health system security and an enhanced consumer experience during this year's ACA enrollment period.

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

Senate

Congress Averts Government Shutdown with Passage of "CROmnibus" Funding Measure

The Senate on Saturday cleared the final hurdle facing a long-term spending bill, passing by a vote of 56-40 a $1.1 trillion package to keep most government operations funded through the remainder of FY 2015. Prior to the Senate vote, the House on Thursday voted 219-206 to pass the spending bill, which consists of an omnibus appropriations bill, combined with one continuing resolution for the Department of Homeland Security. The bill, developed through negotiations among House and Senate leaders, hit a mine field of controversy since its unveiling late Tuesday and nearly failed to pass when many House Republicans refused to back the bill, calling it a vote for amnesty for illegal immigrants because it did not do more to attack President Obama's recent executive order on immigration. House Democrats, whose votes were needed as a result of the Republican defections, revolted over the package's provision rolling back a Dodd-Frank financial reform restriction on banks engaging in derivatives trading. Democrats were also angered by a provision increasing allowable campaign contributions to party committees and a hit against current retiree benefits for those covered by underfunded multiemployer pension plans. Health-related funding in the legislation includes:

Centers for Medicare and Medicaid Services (CMS): The legislation includes $3.6 billion for CMS management and operations, which is equal to the level put in place by sequestration and the same as the fiscal year 2014 enacted level.

Biodefense -- Centers for Disease Control and Prevention (CDC):

The legislation targets funding to critical disease prevention and biodefense research activities. In total, the bill includes a program level of $6.9 billion for the CDC, $43 million above the fiscal year 2014 program level. This includes:

• $30 million to support the Advanced Molecular Detection initiative to enhance CDC's ability to find and stop deadly infectious disease outbreaks;
• $160 million for the Preventive Health & Health Services Block Grant, which allows each state to address its most critical public health needs;
• $1.3 billion for Public Health Preparedness and Response to help ensure ample resources for State and Local Preparedness programs. These critical programs provide supplies and resources for a quick and effective response in the event of a bio-terror attack or pandemic disease emergency.

National Institutes of Health (NIH): The bill includes a program level of $30 billion for the NIH, $150 million above the fiscal year 2014 level. This funding will continue basic bio-medical research and translational research through programs like the Clinical and Translational Science Awards (CTSA) and Institutional Development Award (IDeA)

Prescription Drug Abuse: The bill provides $20 million in increased funding for prescription drug abuse prevention within CDC and a $12 million increase for state grants within Substance Abuse and Mental Health Services Administration to expand treatment services for opioid dependence.

Bicameral Congressional Letter Urges CMS to Alter Rule to Make Speech Devices More Affordable

Senators David Vitter (R-LA) and Amy Klobuchar (D-MN) and Reps. Cedric Richmond (D-LA) and Cathy McMorris Rodgers (R-WA) have sent a letterto the Centers for Medicare & Medicaid Services (CMS) urging the agency to include speech generation devices (SPDs) under their national coverage determination policies. Updates to a Medicare reimbursement policy would switch reimbursement for SPDs from "routinely purchased" to "capped rental," a category that became effective April 1, 2014. CMS said in November that it is reconsidering its previous 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. "CMS' current policy is outdated.... Our proposals would make a huge difference for folks living with ALS, because keeping this equipment affordable will empower folks to live more independently," Sen. Vitter said in a press release. The letter provides recommendations for a better-crafted reimbursement policy, including prevention of coverage loss for patients who are hospitalized, the incorporation of new technologies, such as eye-tracking that provide opportunities for more independent living, and a better-crafted process that allows patients to upgrade their SGDs without losing coverage of current devices coverage, among others. The agency expects to issue a proposed decision memo by May 1, 2015, and a final national coverage decision by the end of July 2015.

Bipartisan Bill Introduced in Senate to Accelerate and Streamline New Antibiotic Drug Development

On Dec. 10, Sens. Michael Bennet (D-CO) and Orrin Hatch (R-UT) introduced a bill, the Promise for Antibiotics and Therapeutics for Health (PATH) Act, that would create a new drug approval pathway, streamlining access to and encouraging the development of new antibiotics for patients with illnesses or infections resistant to existing drugs, particularly veterans who have encountered antibiotic-resistant bacteria while serving overseas. "Antibiotic-resistant bacteria pose serious and unique challenges to health care professionals," Sen. Bennet said in a press release. "This bill will allow new antibiotics that show promise combating these bacteria to reach patients more quickly and save lives. It will also encourage bioscience companies to invest in innovative research to develop these lifesaving drugs." The bill would also allow ‎the Food and Drug Administration (FDA) to speed up the approval process for antibiotics with identifiable, limited patient populations; these drugs would require labels with a special designation.

2. Administration

Office of the National Coordinator for Health Information Technology (ONC) Issues Long-Term Strategic Plan

Following collaboration with more than 35 federal agencies, the U.S. Department of Health and Human Services' Office of the National Coordinator for Health Information Technology (ONC) recently issued its Federal Health IT Strategic Plan 2015-2020. The Strategic Plan represents a coordinated and focused effort to appropriately collect, share and use interoperable health information to improve health care and individual, community and public health; and to advance research across the federal government and in collaboration with private industry. The Strategic Plan, which is open for comments, serves as the broad federal strategy setting the context and framing the Nationwide Interoperability Roadmap that will be released in early 2015. The Nationwide Interoperability Roadmap will help to define the implementation of how the federal government and private sector will approach sharing health information. The Federal Health IT Strategic Plan 2015-2020 can be found at www.healthit.gov.

The period to comment on the Strategic Plan ends Feb. 6, 2015.

HHS Announces $36 Million in ACA Funding for Health Centers

In a Dec. 10 press release, Department of Health and Human Services (HHS) Secretary Sylvia Burwell announced $36.3 million in Affordable Care Act (ACA) funding to 1,113 health centers in all 50 states, the District of Columbia and seven U.S. Territories to recognize health center quality improvement achievements and invest in ongoing quality improvement activities. The health centers receiving awards exhibited quality improvement gains in chronic disease management, preventive care and the use of Electronic Health Records (EHRs) to report quality data. They were awarded in four categories -- for being in the top 30 percent of centers achieving the best overall clinical outcomes, exceeding national clinical benchmarks, demonstrating at least a 10 percent improvement in clinical quality measures and using EHRs to report quality measure data on all their patients. Nearly 1,300 HRSA-supported health centers operate more than 9,200 service delivery sites that provide care to nearly 22 million patients in every state, the District of Columbia, Puerto Rico, the U.S. Virgin Islands and the Pacific Basin. The list of FY 2015 Quality Improvement Awards recipients can be found here.

CMS: Star Rating System Proposed for Home Health Agencies

In a Dec. 11 fact sheet, the Centers for Medicare & Medicaid Services (CMS) announced a proposal for a star rating system under Medicare for home health agencies (HHAs) in 2015, an outcome of the agency's effort to improve transparency and quality-based information accessibility under the Affordable Care Act (ACA). The Web-based feedback system would allow consumers the ability to identify differences in quality and use the information when selecting a health care provider. Currently CMS uses a similar star ratings program for nursing homes, physicians and Medicare Advantage plans, and one will be implemented for kidney dialysis facilities and hospitals in 2015. The CMS now reports 27 process, outcome and patient experience of care quality measures on the Home Health Compare website. The proposed star rating would be an additional measure for 10 of the measures on the website including: Timely initiation of care, improvement in ambulation, drug education on all medications provided to patient/caregiver, improvement in bed transferring, influenza immunization received for current flu season, improvement in bathing, pneumococcal vaccine ever received, improvement in pain interfering with activity, improvement in dyspnea and acute care hospitalization. CMS said it plans to solicit stakeholder feedback on the proposed star rating system, including the measures proposed for inclusion. The feedback process may include future Open Door Forums the fact sheet noted, and a Frequently Asked Questions document will be posted on the CMS website and intermittently updated based on stakeholder questions received.

Recompete of Round Two of CMS DMEPOS Bidding Program Announced for 90 Areas

A Centers for Medicare and Medicaid Services (CMS) fact sheet announced Dec. 11 that new bidding will occur, starting in mid-January for 90 geographic areas in Medicare's Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Competitive Bidding Program. The latest phases announced are for "Round 2 Recompete" and the national mail-order recompete. In this process, DME suppliers must compete to become a Medicare contract supplier by submitting bids to provide certain items in competitive bidding areas; moreover, the competitive bidding program aims to create new, lower payment amounts to replace the former fee schedule amounts for the bid items. In a fact sheet, CMS said it's conducting the Round 2 recompete for seven product categories in the same geographic areas that were included in Round 2. Product categories included enteral nutrients, equipment and supplies; general home equipment and related supplies and accessories; nebulizers and related supplies; negative pressure wound therapy pumps and related supplies and accessories; respiratory equipment; standard mobility equipment and related accessories; and transcutaneous electrical nerve stimulation devices and supplies. Also announced was CMS' launch of a comprehensive bidder education program designed to ensure that DMEPOS suppliers interested in bidding receive the information and assistance they need to submit complete bids in a timely manner. According to CMS, the "Medicare DMEPOS Competitive Bidding Program has saved more than $580 million in the nine markets at the end of the Round 1 Rebid's three-year contract period due to lower payments and decreased unnecessary utilization. Additional savings are being achieved as part of the Affordable Care Act's (ACA) expansion of the competitive bidding program -- at the end of the first year of Round 2 and the national mail-order program, Medicare has saved approximately $2 billion."

A list of the ZIP codes included in each competitive bidding area can be found here.

HHS Releases New ACA Exchange Enrollment Figures; 1.3 Million Plan Selections Since Beginning of Open Enrollment

On Dec. 10 the Department of Health and Human Services (HHS) announced in its weekly blog post that 618,548 individuals had selected health plans as of the week of Dec. 5. HHS said that plan selections in week three (Nov. 29 - Dec. 5) were 33 percent higher than the first week, and double the number of plan selections during the week of Thanksgiving. Open enrollment for the health insurance exchange markets began Nov. 15 and ends Feb. 15; consumers must make plan selections by Dec. 15, 2014, if they want coverage starting Jan. 1, 2015. About 462,000 people enrolled for coverage under the ACA in the first week the federal open enrollment system was open. Each month HHS will produce a report that provides a detailed summary of plan selection across the federally facilitated marketplace (FFM) and the state-based marketplaces set up under the Affordable Care Act the blog post noted. In addition, CMS is publishing weekly figures of preliminary data. "These snapshots do not include the consumers who visited, called, shopped or selected a plan through a State-Based Marketplace," the HHS said.

3. State Activities

Maryland Health Exchange Releases Enrollment Numbers

Maryland's health insurance exchange, the Maryland Health Connection, announced its enrollment figures for Nov. 15 through Dec. 11, with 80,354 Marylander beneficiaries now eligible for health care coverage. More than half of those people (45,014) chose private health plans, while 35,340 people were enrolled in Medicaid. The exchange noted that nearly 388,000 visits have been made to the health exchange website, which was revamped this year after it was troubled by technology issues during the first enrollment period in 2014. "I think the website has been going fairly smoothly," said Andrew Ratner, a spokesman for the exchange. Maryland residents must enroll or renew their plans by Dec. 18 for insurance that starts Jan. 1. The state has more insurance carriers for 2015 than it did in the first enrollment period, and that competition has led to new offerings and potentially better deals. The state also released new enrollment demographics by age. Of the new enrollees in the second sign-up period through Dec. 4, the highest number is for people between the ages of 55 and 64, accounting for 23 percent of enrollees. The second enrollment period ends Feb. 15, 2015.

4. Regulations Open for Comment

Medicare and Medicaid Program; Revisions to Certain Patient's Rights Conditions of Participation and Conditions for Coverage Overview

On Dec. 11, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule to revise selected conditions of participation (CoPs) for providers, conditions for coverage (CfCs) for suppliers, and requirements for long-term care facilities, by proposing to clarify that where state law or facility policy provides or allows certain rights or privileges to a patient's opposite-sex spouse under certain provisions, a patient's same-sex spouse must be afforded equal treatment if the marriage is valid in the jurisdiction in which it was celebrated. The proposal was made in response to a Supreme Court decision, United States v. Windsor, which held that Section 3 of the Defense of Marriage Act (DOMA) is unconstitutional because it violates the Fifth Amendment. Section 3 of DOMA provided that in determining the meaning of any Act of the Congress, or of any ruling, regulation or interpretation of the various administrative bureaus and agencies of the United States, the word "marriage" meant only a legal union between one man and one woman as husband and wife, and the word "spouse" could refer only to a person of the opposite sex who was a husband or a wife. To be assured consideration, comments must be received no later than 5 p.m. on Feb. 10, 2015.

CMS Releases Proposed Rule on ACA Benefit and Payment Parameters for 2016

In a Nov. 21 press release, the Centers for Medicare & Medicaid Services (CMS) announced the issuance of a proposed rule (CMS-9944-P) covering a wide range of Affordable Care Act policies for individual and small group health plans, both inside and outside the ACA marketplaces, including payment parameters and provisions related to the risk adjustment, reinsurance and risk corridors programs; cost-sharing parameters and cost-sharing reductions; and user fees for federally facilitated exchanges. The rule, entitled "HHS Notice of Benefit and Payment Parameters for 2016," would provide additional standards for the annual open enrollment period for the individual market for benefit years beginning on or after Jan. 1, 2016, and has provisions affecting essential health benefits, qualified health plans, network adequacy, quality improvement strategies, the Small Business Health Options Program, guaranteed availability, guaranteed renewability, minimum essential coverage, the rate review program and the medical loss ratio program. The rule was published in the Federal Register Nov. 26 and stakeholder comments are due Dec. 26.

CMS Releases Memo Seeking Comments on Changes to Ratings for Medicare Advantage, Drug Plans in 2016

In a memorandum released Nov. 21 by the Centers for Medicare & Medicaid Services (CMS), the agency is seeking comments on possible changes to its star rating system for Medicare Advantage (Part C) and prescription drug plans (Part D). The ratings, which grade plans on a scale of one to five and affect payments to Medicare Advantage plans, and other changes would be implemented for the 2016 contract year and will be further discussed in CMS' Call Letter in February 2015. Among the possible adjustments that CMS is investigating are the potential development of an integrated star rating system for Medicare-Medicaid Plans (MMPs) participating in the agency's capitated financial alignment demonstration for dually eligible beneficiaries. The memo said that a rating system for the managed care plans involved in some of the demos would acknowledge "the additional needs of Medicare-Medicaid enrollees and measure the performance of the MMPs in integrating the Medicare and Medicaid benefits." CMS also said it would be analyzing 67 responses received in September, when the agency posted a request for information (RFI) asking the public whether these plans have more problems than others with the quality ratings and further sought experiences or research into whether high-quality performance could be achieved, regardless of the enrollment level of low-income beneficiaries. Among the other possible changes outlined in the memo, the agency said for the 2016 ratings, it plans to remove its "pre-determined measure thresholds," which have been used since 2011 for certain measures partly to "set expectations for high performance." Furthermore, CMS said to help beneficiaries make more informed choices and to be as transparent as possible about the performance of all plans, it is moving toward including low-enrollment contracts in the star ratings beginning with the 2016 star ratings. Comments on the ratings alterations are due by Dec. 17.

CMS Releases Proposed Rule Aimed to Strengthen ACOs

In a Dec. 1 press release, the Centers for Medicare & Medicaid Services (CMS) announced a new proposed rule looking to improve the Shared Savings Program (SSP) for Accountable Care Organizations (ACOs) through a greater emphasis on primary care services and promoting transitions to performance-based risk arrangements. Through the Affordable Care Act (ACA), ACOs encourage doctors, hospitals and other health care providers to work together to better coordinate care when people are sick and keep people healthy, which helps to reduce growth in health care costs and improve outcomes. CMS Administrator Marilyn Tavenner said, "This proposed rule is part of our continued commitment to rewarding value and care coordination -- rather than volume and care duplication. We look forward to partnering with providers and stakeholders to continuously refine and improve the Medicare Shared Savings program." Other goals of the rule include providing more flexibility for ACOs seeking to renew their participation in the program, encouraging ACOs to take on greater performance-based risk and reward, creating alternative methodologies for benchmarks, and streamlining data sharing and reducing administrative burden. The SSSP now includes more than 330 ACOs in 47 states, providing care to more than 4.9 million beneficiaries in Medicare fee for service. Recently, CMS announced first-year SSP results, finding that 58 SSP ACOs held spending below their benchmarks by a total of $705 million and earned shared savings payments of more than $315 million, and that another 60 ACOs had expenditures below their benchmark, but not by a sufficient amount to earn shared savings. Comments on the proposed rule are due by Feb. 6. A fact sheet accompanying the proposed rule can be found here.

OPM Proposes New Multi-State Plan Rule

The U.S. Office of Personnel Management (OPM) is issuing a proposed rule to implement modifications to the Multi-State Plan (MSP) Program based on the experience of the Program to date. OPM established the MSP Program pursuant to Section 1334 of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, referred to collectively as the Affordable Care Act. This proposed rule clarifies the approach used to enforce the applicable requirements of the Affordable Care Act with respect to health insurance issuers that contract with OPM to offer MSP options. This proposed rule amends MSP standards related to coverage area, benefits and certain contracting provisions under Section 1334 of the Affordable Care Act. This document also makes non-substantive technical changes. Comments are due on or before Dec. 24, 2014.

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.

OPPS

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.

5. Reports

Access to Care: Provider Availability in Medicaid Managed Care

According to a recently released report, GAO found that slightly more than half of providers could not offer appointments to Medicaid enrollees. Notably, 35 percent could not be found at the location listed by the plan, and another 8 percent were at the location but said that they were not participating in the plan. An additional 8 percent were not accepting new patients. Among the providers who offered appointments, the median wait time was two weeks. However, over a quarter had wait times of more than one month, and 10 percent had wait times longer than two months. Finally, primary care providers were less likely to offer an appointment than specialists; however, specialists tended to have longer wait times. A companion report issued earlier this year, State Standards for Access To Care in Medicaid Managed Care, OEI-02-11-00320, found that State standards for access to care vary, and that they are often not specific to certain provider types or to areas of the State. Additionally, States have different strategies to assess compliance with access standards. OIG based this study on an assessment of availability of Medicaid managed care providers. The assessment included calls to a stratified random sample of 1,800 primary care providers and specialists to assess availability and timeliness of appointments for enrollees.

Physician Motivations for Adoption of Electronic Health Records

Recently, the Office of the National Coordinator for Health Information Technology (ONC) issued a report describing the characteristics of physicians and examining the motivators for electronic health record (HER) adoption by adoption status. According to the report, solo practice physicians had the highest percentage of providers who were uncertain on adoption or who never planned to adopt. In addition, the report found that a majority of physicians who adopted an EHR between 2010 and 2013 reported that financial incentives or penalties had a major influence in their decision to adopt EHRs, and one in three physicians who had not adopted indicated they had applied, or planned to apply, for incentive funds.

GAO Finds DME Competitive Bid Payment Amounts Drop Following Bidding

The Government Accountability Office (GAO) released a report Dec. 8 concluding that the amount paid for items in the Medicare competitive bidding program for durable medical equipment (DME) generally decreased after each bidding round. For a majority of the items, the largest decreases occurred after the first round of bids in 2011, compared with average payments in 2010 under the Medicare fee schedule, with smaller payment declines in subsequent rounds, the report said. The 2010 fee schedule amount was used as a comparison point because 2010 was the year that preceded Round 1 of the bidding. Moreover, GAO found that, in each round, few suppliers were new to both a product category and a competitive bidding area, representing just 3 percent of bidders, the report said. Authorized by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, the DME bidding program has been operating since Jan. 1, 2011, when contracts for Round 1 went into effect in nine geographic areas. In the program, DME suppliers are selected competitively and awarded contracts to furnish certain DME items in competitive bidding areas. CMS reported total savings of more than $580 million at the end of Round 1 rebid's three-year term due to lower payments and decreased utilization. GAO previously reported on the implementation of the CBP Round 1 rebid in 2012.

MACPAC Holds December Public Meeting

On Dec. 11-12, the Medicaid and CHIP Payment and Access Commission (MACPAC) met in regular session to discuss several issues in preparation for the panel's March 2015 Recommendation to Congress. MACPAC is a non-partisan federal agency charged with providing policy and data analysis to the Congress on Medicaid and CHIP, and for making recommendations to the Congress, the Secretary of the U.S. Department of Health and Human Services and the states on a wide range of issues affecting these programs. Appointed by the U.S. Comptroller General, the 17 commissioners have diverse backgrounds, offer broad perspectives on Medicaid and CHIP, and represent different regions across the United States. Sessions covered in the meeting consisted of:

• The Future of CHIP
• MACPAC Analysis Plan and Review of Governors' Letters
• Affordability of Coverage for Children Moving from CHIP to Exchange Coverage
• Updated Estimates of Eligibility for Separate CHIP Children in a Post-CHIP Landscape
• Pediatric Network Adequacy Roundtable: Initial Themes
• Draft March Report Chapter: Premium Assistance: Medicaid's Expanding Role in the Private Insurance Market
• Draft March Report Chapter: A Framework for Evaluating Medicaid Payment Policy
• Policy Options for Improving Access to Care and Reducing Out-of-Pocket Costs for Dually Eligible Beneficiaries
• Update on Pregnancy-Related Medicaid and Minimum Essential Coverage
• Managed Care Update

For more information, please visit www.macpac.gov.

Improper Payments: Inspector General Reporting of Agency Compliance Under the Improper Payments Elimination and Recovery Act

According to a letter sent on Dec. 9 by GAO to Congress, improper payments -- such as duplicate or erroneous payments, payments to ineligible recipients or payments for ineligible services -- have been a longstanding challenge of the federal government and have annually totaled billions of dollars. For fiscal year 2013, federal agencies reported an estimated $105.8 billion in improper payments, a decrease of $1.3 billion from the prior year's revised estimate of $107.1 billion. Based on GAO's review of Office of Management and Budget (OMB) data, the $105.8 billion estimate was attributable to 84 programs across 18 agencies. In addition, five programs accounted for approximately $82.9 billion, or 78 percent, of the total improper payments estimate in fiscal year 2013.

Fiscal year 2013 marked the 10th year of implementation of the Improper Payments Information Act of 2002 (IPIA), as well as the third year of implementation of the Improper Payments Elimination and Recovery Act of 2010 (IPERA). IPIA requires executive branch agencies to annually identify programs and activities susceptible to significant improper payments, estimate the amount of improper payments, and report these estimates along with actions planned or taken to reduce them. IPERA expanded on IPIA and added new requirements toward ensuring that agencies perform risk assessments for all programs, publish corrective action plans to reduce improper payments, and meet planned improper payment reduction targets and error rates.

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