Mondaq Business Briefing by Ms Stephanie Kennan and Brian J. Looser, McGuireWoods, LLP –
October 22, 2012:
House of Representatives
Issa to Subpoena HHS Over Medicare Advantage Data
On Friday, Oversight and Government Reform Committee Chairman Issa (R-CA) sent a letter to HHS Secretary Sebelius noting that he would be moving forward with the use of compulsory process in response to what he labeled a failure on the part of the HHS to adequately address his concerns surrounding a demonstration project aimed at rewarding innovative Medicare Advantage plans. The move is consistent with House GOP efforts to highlight a program the Government Accountability Office (GAO) has said violates the intent of the program and should be canceled. While HHS sent over a box of documents to Issa’s committee in advance of his stated deadline, the committee said the response “fell far short” of what it requested.
Energy and Commerce Requests Data on Meningitis Outbreak
In the latest Congressional activity related to the recent outbreak of meningitis, Energy and Commerce Chairman Upton (R-MI) and Ranking Member Waxman (D-CA) have asked FDA Commissioner Margaret Hamburg for all documents from the agency’s dealings with the New England Compounding Center (NECC) dating back to 2004. The request comes on the heels of similar letters to NECC’s owner and the Massachusetts Board of Pharmacy. In addition, Rep. Markey (D-MA) has asked the Department of Justice (DOJ) to investigate whether NECC violated controlled substances law by distributing substances in violation of Drug Enforcement Agency (DEA) rules.
Hospitals Applaud Recovery Audit Contractor (RAC) Legislation
The American Hospital Association (AHA) recently backed legislation that would reform the Recovery Audit Contractor (RAC) program, which the group says has added regulatory cost to the hospital industry without adequately achieving its goal of reducing billing errors. The bill, H.R. 6575, the Medicare Audit Improvement Act of 2012, sponsored by House Small Business Committee Chairman Graves (R-MO), would make several reforms to how RACs operate, including greater auditor transparency and mandatory physician review for payments denied by Medicare. To view AHA’s support letter, please click here.
GOP Senators Seek Information on Meaningful Use…
In response to recent headlines about electronic health records (EHR), four Republican Senators recently asked HHS Secretary Sebelius for answers on Stage 2 of the “meaningful use” program. Sens. Burr (R-NC), Coburn (R-OK), Roberts (R-KS) and Thune (R-ND) questioned whether subsidized record systems are boosting diagnostic tests, increasing Medicare billing and if the Administration has a plan to improve interoperability. They’ve asked for CMS and the Office of the National Coordinator for Health Information Technology (ONC) staff to meet with Senate HELP and Finance committee aides by next Friday.
…Health Information Technology Advocates Respond
Also in the world of EHR “meaningful use,” the Association of Regional Centers for Health Information Technology (ARCH-IT), a coalition focused on the widespread adoption of health information technology, responded to a call earlier this month by four House GOP chairmen who asked HHS to suspend the meaningful use electronic health records program. While ARCH-IT concedes that the program could run more smoothly, it warns that withdrawing funds would hurt small providers who have invested in the systems. To view ARCH-IT’s press release, please click here.
Health and Human Services (HHS)
Administration Official Asks for Medicare Billing Review
Dr. Farzad Mostashari, the National Coordinator for Health Information Technology, recently indicated his office will examine the use of electronic health records and find out whether doctors and hospitals are using them to overcharge Medicare. Of particular interest to the agency is whether electronic records actually make it easier for doctors to raise their billing codes by “cloning,” or cutting and pasting, records from previous patient visits. To learn more, please click here.
GOP Lawmakers Question HHS Work on Malpractice Reform Projects
In a letter sent on Oct. 16, Sen. Grassley (R-IA), Sen. Hatch (R-UT) and Rep. Smith (R-TX) asked HHS Secretary Sebelius to document roughly $23 million her department has allocated to research grants relating to “traditional” medical malpractice reforms aimed at curbing frivolous lawsuits. The group said a recent description of the research from the HHS Agency for Healthcare Research and Quality (AHRQ), which awarded the research grants, “does not mention, much less emphasize, reforms to medical malpractice laws, as was clearly implied by the President’s speech.” To view Sen. Grassley’s press release, please click here.
Centers for Medicare and Medicaid Services
Bundled Payment Initiative Postponed
The Centers for Medicare & Medicaid Services will delay implementing one of the four models of its bundled payment initiative. According to CMS, “While the industry interest in Models 2-4 has been positive and robust, Model 1 has fewer prospective participants and less diversity than originally anticipated when the model was designed.” As a result, “CMS has decided to delay further implementation of Model 1 until we can review how the model and its likely participants would fit into the broader bundles portfolio.”
Administered by the Centers for Medicare and Medicaid Innovation (CMMI), the bundled payments initiative was announced in August 2011 as part of the Affordable Care Act. Under the initiative, CMS would link Medicare payments for multiple services patients receive during an episode of care.
Medicare Advantage Plans Get 2013 Star Ratings
According to data recently released by CMS, 11 Medicare Advantage (MA) plans received top quality ratings for 2013, up from nine plans in 2012. The rankings are based on 48 quality measures, including preventive screenings, management of chronic conditions and patient experience. CMS gives bonuses to plans for higher-quality ratings, which helps restore some of the Medicare Advantage reimbursement cuts in the Affordable Care Act. The MA plans that received an “overall” score of five stars for “excellent performance,” which includes both the plans’ Part D drug rating and Part C health care rating, are:
Group Health Plan Inc., Minnesota and Wisconsin
Group Health Cooperative, Washington state
Gundersen Lutheran Health System Inc., Wisconsin
Humana Wisconsin Health
Baystate Health Inc.’sHealth New England, Massachusetts
Kaiser Foundation Health Plans available in California, Hawaii, Colorado, Oregon/Washington, Ohio and the Mid-Atlantic region (counted as six individual plans).
Raid Conducted on Compounding Pharmacy Suspected in Outbreak
In response to the recent meningitis outbreak, FDA criminal investigators last week raided the New England Compounding Center’s (NECC) facility in Framingham, MA, which is linked to the nationwide fungal meningitis outbreak that’s killed 15 and sickened more than 200. In a statement U.S. Attorney Carmen M. Ortiz said, “I can confirm that this office and our law enforcement partners are investigating allegations concerning the New England Compounding Center. I think that it is entirely premature to suggest what the results of the investigation will be.” For more information, please click here.
IRS Hospital Hearing Postponed
The IRS recently decided to postpone a hearing on a June proposed rule implementing the ACA’s new requirements on charitable hospitals. The hearing, originally set for Oct. 29, is now scheduled for Dec. 5.
3. State Activities
New Jersey Attempts Exchange Legislation Again
Last week, the New Jersey Assembly sent a second attempt at a health insurance exchange bill to Gov. Chris Christie’s desk. This marks the second time this year the state’s legislature approved such a bill. Christie vetoed the last effort because it was too soon to make a decision, but he said he’ll make up his mind after the election. In a notable departure from the original legislation, the new exchange bill no longer includes a $50,000 annual salary for board members.
Utah Confirms It Will Wait on Exchange Certification
As one of only two states operating a health insurance exchange, Utah still has not decided whether it will test the acceptability of its existing exchange against the HHS’s vision of an exchange pursuant the ACA by applying for HHS certification next month. “To ensure due diligence for an issue of this magnitude, we do not anticipate having a final decision until mid-November, and possibly even later,” Gov. Gary Herbert’s spokeswoman told The Salt Lake Tribune. The Tribune story is available here.
Pennsylvania Doubtful on State-Run Exchange
According to Pennsylvania Insurance Commissioner Michael Consedine, the chances of his state running its own exchange by the time the online marketplaces are scheduled to be up and running are not particularly high. “For us to have something up and running by next year will be very challenging, if not impossible, given that we have no [state] legislation” and little guidance from HHS, Consedine said. The Pittsburgh Post-Gazettestory is available here.
4. Regulations Open for Comment
FDA Proposes Unique Device Identifier (UDI) Rule
The FDA will accept comments on the proposed rule to implement a Unique Device Identifier system for medical devices distributed in the United States. Comments on the proposed rule will be accepted either electronically or written until Nov. 7, 2012. For more information, please click here.
Assessment of Affordable Care Act Prevention Fund
According to a recent report released by the General Accountability Office, the Department of Health and Human Services (HHS) allocated funds from the Affordable Care Act Prevention Fund to five agencies for 43 activities in fiscal years 2010 and 2011. The agencies receiving funding were HHS’s Agency for Healthcare Research and Quality (AHRQ), Centers for Disease Control and Prevention (CDC), Health Resources and Services Administration (HRSA), Substance Abuse and Mental Health Services Administration (SAMHSA) and the Office of the Secretary (OS). In fiscal year 2010, $500 million was allocated to the various projects. In fiscal year 2011, $750 million was given to the agencies. The agencies established their own performance measures and were responsible for tracking outcomes of their programs. However, the report notes it is too early to report the outcomes, since many activities are multiyear projects.
AARP Public Policy Institute
Report Explores Growing Obligations of Caregivers
Recently, AARP released a study on Understanding the Impact of Family Caregiving on Work. The study found that the “average” caregiver is a woman who has a regular full-time job and spends an additional 20 hours a week taking care of an elder, most likely her mother. Moreover, the study demonstrated that the number of workers taking care of elders is on the rise and interfering with paid employment. Nineteen percent of retirees left their job to care for an elder.
Kaiser Family Foundation
“Premium Support” Would Raise Costs for Seniors
The Kaiser Family Foundation released a study last week noting that had a Medicare premium support plan been put in place in 2010, almost 60 percent of Medicare seniors in traditional Medicare would have seen their premiums increase. However, the study, based on a generic premium support model drawing on elements of the Ryan, Domenici and Rivlin visions of premium support models, has been criticized for, among other reasons, an assumption that premium support would go into effect in 2010, though most variations being discussed wouldn’t begin for quite a few years. Nonetheless, the study found that in several states, premiums could go up $100 a month, twice that much in Florida. To view the report, please click here.
American Medical Association (AMA) Council on Medical Service
AMA in Favor of Premium Support
Though it’s not exactly Paul Ryan’s vision of premium support, AMA’s Council on Medical Service recently endorsed a form of premium support linking subsidies to rising health costs, not to GDP growth or other indicators that could shift more costs to seniors. While the decision is certainly welcomed by advocates of a premium support system, the council made a similar endorsement last June that AMA’s broader membership put off until after the election.
ACA Good for Medicare Advantage
A report issued by the Commonwealth Fund recently found that the ACA will get rid of what it calls $12.7 billion in overpayments accrued by MA plans in 2009, will save $640 million by reducing plan rebate payments and will simultaneously pay out $2.1 billion to plans that perform well. “The Medicare Advantage program must work just as well as traditional Medicare without costing more,” Karen David, Commonwealth’s president, said in a statement. “The Affordable Care Act will make that possible, while also protecting traditional Medicare, by eliminating excess payments to private plans while maintaining fair payments and rewarding plans for high quality.”
Annals of Internal Medicine
Implantable Cardioverter-Defibrillator (ICD) Battery Recycling
A recent study found that used implantable cardioverter-defibrillators (ICDs) with three or more years of battery life can be safely sterilized and reused in patients after being explanted because of upgrades, infection or patient death. The devices functioned properly and no complications due to infections occurred when researchers conducted this experiment. However, the study was small, with only 81 patients, and further validation is needed.
Eldercare Workforce Alliance
Sequestration, Older Adults and the Eldercare Workforce
The Eldercare Workforce Alliance released an issue brief last week outlining the impact that the budget sequester would have on care for older adults in an attempt to convince lawmakers to find alternative cost-saving measures that will have a less detrimental effect on older adults and the supply of qualified professionals available to care for them. According to the report’s authors, “While we understand the fiscal constraints facing the nation, we feel it imperative to stress that stagnant or decreased investment due to cuts will cause the crisis to worsen, and care for our nation’s older adults will suffer.”
ACA is Market-Based Health Reform
According to a study recently released by the Urban Institute, contrary to the views of critics, the ACA is not a heavy-handed takeover of health care, but rather a market-oriented solution akin to “Reagan-era reform proposals.” Citing, among other provisions of the law, the establishment of health insurance exchanges to promote competition among private health plans, the study asserts that “the ACA relies primarily on the private market to achieve coverage expansion, using public regulation to make the market work.”