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February 2018

Senate Confirms New Department of Health and Human Services Secretary

Senate Majority Leader Mitch McConnell (R-Ky.) moved to file a cloture motion to proceed with the nomination of Alex Azar to be Secretary of the U.S. Department of Health and Human Services (HHS), clearing the way for Azar’s confirmation on Wednesday by a vote of 55-43.

Azar is a former executive of the drug company Eli Lilly. He previously served as general counsel (2001 2005) and deputy secretary (2005-2007) of HHS during the Bush Administration. Azar faced opposition from the majority of Senate Democrats, who have criticized his ties to the pharmaceutical industry and questioned his ability to lead efforts to address the nation’s rising drug costs. His backers, however, tout his managerial experience in both the public and private sector. One key policy issue Senate Majority Leader McConnell and Senate Health, Education, Labor and Pensions (HELP) Committee Chair Lamar Alexander (R-Tenn.) hope he works to address is the opioid crisis.

Continuing Resolution Passed

The Senate and House passed a fifth continuing resolution to keep the federal government operational until March 23.  The spending package, which passed with bipartisan majorities in both the Senate (71-28) and the House (245-182) included a number of health care issues of interest to medicine. These issues included technical changes to the Quality Payment Program, repeal of IPAB, and the funding for Teaching Health Center Graduate Medical Education.

White House Budget Released

The Administration sent President Trump’s FY 2019 budget to be sent to Congress.

The budget proposal features numerous program integrity provisions. For instance, the budget calls for:

  • $45 million increase in Health Care Fraud and Abuse Control funding
  • Expand prior authorization requirements for high utilization practitioners of radiation therapy, therapy services, advanced imaging, and anatomic pathology services
  • Expansion of the items of DME, prosthetics and orthotics that are subject to prior authorization

The budget also includes proposals to streamline Medicare program rules for providers and suppliers, including:

  • Relaxing Medicare meaningful use program requirements for hospitals and physicians
  • Simplifying Merit-based Incentive Payment System (MIPS) rules and Advanced Alternative Payment Model (APM) bonus rules for physicians
  • Reforms to the Medicare appeals process

Future of Medicare Extenders in Limbo

Health care stakeholders are increasing pressure on Congress to continue funding for a series of Medicare “extenders” – Medicare program and payment policies that expired at the end of 2017. Some examples of the extenders include the physical, occupational, and speech language therapy cap exception process; the Medicare low-volume hospital add-on payments; and geographic practice cost index (GPCI). Congress last extended these provisions in the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015.

Opioid Emergency Declaration Extended

Acting Secretary of the U.S. Department of Health and Human Services (HHS) Eric Hargan has signed a 90-day extension of the Administration’s previous declaration of the opioid misuse and abuse crisis as a public health emergency. The renewal is effective January 24.

Energy and Commerce Releases Report on 340B

The House Energy and Commerce Committee has released a report detailing the flaws of the 340B Medicare drug discount program. “Review of the 340B Drug Pricing Program” finds that 340B has grown beyond the original intent of the law – to help indigent patients with drug costs. According to the analysis, the Health Resources and Services Administration (HRSA) lacks the regulatory authority to oversee the program and has yet to issue and enforce the regulatory requirements that are within its authority. The report also indicates that the 340B audit process is in need of improvement and points to the lack of data on how program savings are used.

The report makes recommendations for how 340B can be improved, and Committee Chairman Greg Walden (R-Ore.) has stated that a legislative fix is forthcoming. Among the report’s twelve recommendations, the Committee proposes ensuring that covered entities and stakeholders have access to ceiling prices, requiring covered entities to disclose information about their annual 340B program savings or revenue, and establishing a mechanism to monitor the level of charity care provided by covered entities.

Children’s Health Insurance Program Funded for Six Years

Congress passed and President Trump signed legislation January 22 to end the three-day federal government shutdown. Included in the legislation is funding for the Children’s Health Insurance Program (CHIP) program for six years. CHIP funding expired September 30, 2017, and the program relied on federal stop-gap spending measures to remain operational while congressional leaders worked out a long-term funding solution.

House Subcommittee Passes Good Samaritan Bill

The U.S. House Committee on Energy and Commerce Subcommittee on Health passed the Good Samaritan Health Professionals Act (H.R. 1876) January 17 with a unanimous voice vote. The vote is one of the final steps before the legislation can be considered by the full House of Representatives.

H.R. 1876, introduced by Reps. Marsha Blackburn (R-TN) and David Scott (D-GA), would ensure liability concerns do not preclude health care providers from volunteering in the event of federally declared disasters. Rapid medical response in disaster situations can greatly decrease loss of life and improve outcomes for patients who need emergency care. This bill would ensure that health care professionals who would like to provide voluntary care in response to a federally declared disaster can do so without facing uncertainty about potential liability.

Senate Holds Hearings on Pandemic and All Hazards Preparedness Act

The Pandemic and All Hazards Preparedness Act (PAHPA), created by Congress in 2006 to improve the nation’s response to public health and medical emergencies, is up for funding reauthorization. As part of the reauthorization process, the U.S. Senate Committee on Health, Education, Labor and Pensions (HELP) held hearings January 17 and 23 to evaluate PAHPA. When PAHPA initially was enacted, it created the Office of the Assistant Secretary for Preparedness and Response (ASPR), which has oversight in the implementation of recommendations of the National Academies of Science, Engineering, and Medicine’s 2016 report, A National Trauma Care System: Integrating Military and Civilian Trauma Systems to Achieve Zero Preventable Deaths After Injury.

CMS Announces New Voluntary Bundled Payment Model

The Centers for Medicare & Medicaid Services (CMS) on January 9 announced an updated version of the Bundled Payment for Care Improvement (BPCI) payment model, which is intended to meet new Advanced Alternative Payment Model (A-APM) requirements in the Medicare Quality Payment Program (QPP). The new BPCI Advanced model is open for applications, and the first participants will enter the program in October. Because BPCI Advanced meets A-APM requirements, participants who receive a sufficient percentage of payments or see a high enough portion of their patients through the model will be exempt from the Merit-based Incentive Payment System and potentially eligible for a 5 percent lump sum incentive. The program will begin with 29 inpatient and 3 outpatient clinical episodes, including several surgical options.

The full list of episodes, a timeline for participation, a link to the request for applications, and other resources are available on the CMS website; further information is available in the BPCI Advanced fact sheet.

MedPAC Considers Options to Rebalance Physician Fee Schedule

The Medicare Payment Advisory Commission (MedPAC), an independent committee that advises Congress on issues affecting the Medicare program, met at the beginning of January. The commission reviewed policy options to rebalance the Medicare physician fee schedule (MPFS) toward ambulatory evaluation and management (E/M) services.

According to MedPAC staff, the MPFS undervalues ambulatory E/M services relative to other services—particularly surgical procedures. In addition, MedPAC staff asserted that compensation for primary care is substantially lower than for other specialties and theorized that this discrepancy may deter medical students and residents from pursing primary care, thereby creating a workforce shortage.

Commissioners considered possible actions to address the relative underpricing of E/M services, such as the application of a 10 percent increase in E/M payment rates for all physicians, which would result in a $2.7 billion net payment increase for primary care specialties and a 4.5 percent reduction in payment rates for all other services. The commission also discussed offering special payments for primary care physicians in addition to increased reimbursement for E/M services. MedPAC concluded that it will not develop immediate recommendations related to these issues for Congress, but it may reevaluate options to rebalance the MPFS this fall.

The meeting follows a similar November 2017 MedPAC session, during which commissioners suggested rebalancing the MPFS toward primary care services. In a January 10 letter to MedPAC, a coalition of 20 surgical organizations, which the ACOS is a part, stated that the underlying assumptions in the commission’s discussion about an imbalance in the MPFS are incorrect. More specifically, the coalition questioned—and countered—the problems MedPAC staff described with regard to how the MPFS pays for primary care, MedPAC’s concerns about income disparities between primary care and specialty physicians, and the effectiveness of increasing payment to certain specialties in order to address workforce issues. Presentation materials from the meeting are on the commission website.