Legislative Activity

Republicans Consider Obamacare Repeal Through Reconciliation

Some GOP lawmakers continue to advocate for an Affordable Care Act repeal via the budget reconciliation process. Others, however, have been questioning whether this budget tactic would be better used for different policy objectives, such as tax reform.

The budget resolution provided a July 24 deadline for the committees with health care jurisdiction to determine a repeal plan. House Committee on Ways and Means Chairman Paul Ryan (R-WI) is reportedly planning to meet the deadline. He has said that many House Republicans “want to use reconciliation to go after Obamacare.” However, Sen. John Barrasso (R-WY) has noted there is “no timeline on the reconciliation bill, so it can be used at any point.” Senate Committee on Finance Chairman Orrin Hatch (R-UT) and Senate Committee on Health, Education, Labor, and Pensions (HELP) Chairman Lamar Alexander (R-TN) have both stated that they have not written reconciliation plans. Both chairmen believe such plans should be drawn up by Senate leadership.

This Week’s Hearings:

• Tuesday, July 14: The House Committee on Energy and Commerce Subcommittee on Oversight and Investigations will hold a hearing titled “Medicare Part D: Measures Needed to Strengthen Program Integrity.”

• Tuesday, July 14: The House Committee on Veterans’ Affairs Subcommittee on Health will hold a hearing focused on health care legislation titled “H.R. 272; H.R. 353; H.R. 359; H.R. 421; H.R. 423; H.R. 1356; H.R. 1688; H.R. 1862; H.R. 2464; H.R. 2914; H.R. 2915; H.R. 2016; and, Draft Legislation to Authorize VA Major Medical Facility Construction Projects for FY 2015 and to Make Certain Improvements in the Administration of VA Medical Facility Construction Projects.”

• Tuesday, July 14: The Senate Committee on Commerce, Science, and Transportation Subcommittee on Space, Science, and Competitiveness will hold a hearing titled “Unlocking the Cures for America’s Most Deadly Diseases.”

• Wednesday, July 15: The Senate Special Committee on Aging will hold a hearing titled “Diabetes Research: Improving Lives on the Path to a Cure.”

• Thursday, July 16: The Senate Committee on Finance will hold a hearing titled “Reviewing HealthCare.gov Controls.”

Regulatory Activity

CMS Announces ICD-10 Transition Period

On Monday, July 6, the Centers for Medicare and Medicaid Services (CMS) announced that it will offer providers flexibility during the transition from ICD-9 to the ICD-10 coding standard for health care claims. Under current law, ICD-10 is set to become the coding standard of the United States on October 1. For the first year, CMS has stated that Medicare claims will not be denied solely based on the specificity of the diagnosis code, provided that the code is from the appropriate family of ICD-10 codes. This transition period is intended to give providers time to become accustomed to the more complex ICD-10 coding set.

CMS Proposes Payment Changes for HHAs

On Monday, July 6, CMS published a proposed rule titled “Medicare and Medicaid Programs; CY 2016 Home Health Prospective Payment System Rate Update; Home Health Value-Based Purchasing Model; and Home Health Quality Reporting Requirements.” In addition to other provisions, this rule proposes changes to the Medicare home health prospective payment system for the 2016 calendar year. The proposal would reduce the standard payment rate to home health agencies (HHAs) for 60-day episodes of care by $80.95.

Additionally, the proposed rule would launch the Home Health Value-Based Purchasing Model, a pilot program which would aim to move HHAs from volume-based payments to value-based purchasing. In the nine states that the agency proposes to launch the pilot, HHAs would have their payments adjusted by up to eight percent based on their performance across a series of quality metrics.

The deadline for comments is September 4.

CMS Releases Proposed Update to Physician Fee Schedule

On Wednesday, July 8, CMS issued a proposed rule titled “Medicare Program; Revisions to Payment Policies under the Physician Fee Schedule and Other Revisions to Part B for CY 2016.” This proposed rule includes updates to the physician fee schedule, the Physician Quality Reporting System, and the Physician Value-Based Payment Modifier for the 2016 calendar year. Of note, this rule would be the first update to the physician payment schedule since the sustainable growth rate was repealed in April and marks the beginning of the agency’s implementation of the Merit-Based Incentive Payment System.

Comments are due by September 8. The agency has stated that it plans to issue the final rule by November 1.

CMS Introduces Payment Model for Joint Replacements

On Thursday, July 9, CMS released a proposed rule titled “Medicare Program; Comprehensive Care for Joint Replacement Payment Model for Acute Care Hospitals Furnishing Lower Extremity Joint Replacement Services.” This rule proposes to test a new Medicare Part A and Part B payment model for lower extremity joint replacement (LEJR) procedures, including hip and knee replacements. Under the agency’s proposal, participating acute care hospitals would receive bundled payments for LEJR episodes, which would continue for 90 days following discharge. Depending on the hospital’s performance on quality and episode spending measures, CMS proposes that the hospital would receive an additional payment from Medicare or be required to repay Medicare for a portion of the episode spending. The agency proposes to test this payment model for a five year performance period, which would begin on January 1, 2016.

Comments are due by September 8.

Obama Nominates Slavitt to Lead CMS

On Thursday, July 9, President Barack Obama formally nominated Andy Slavitt to be the next CMS administrator. Slavitt has served as acting CMS administrator since Marilyn Tavenner resigned in January. In previous roles, Slavitt has served as Group Executive Vice President for Optum and CEO of HealthAllies. Slavitt’s appointment is contingent on confirmation by the Senate.

Agencies Issue Final Rule on Preventive Services Coverage

On Friday, July 10, CMS, the Internal Revenue Service, and the Employee Benefits Security Administration jointly released a final rule titled “Coverage of Certain Preventive Services under the Affordable Care Act.” This rule finalizes coverage of defined recommended preventive services as required by the Affordable Care Act. These recommended preventive services include certain routine immunizations and contraceptive services for women. Among other provisions, the rule establishes a process for eligible organizations to notify the Department of Health and Human Services of their religious objection to contraceptive services coverage.

This rule is slated for publication in the Federal Register on July 14 and will be effective 60 days thereafter.

Other Activity

GAO Releases Report on 340B Drug Pricing Program

On Monday, July 6, the Government Accountability Office (GAO) published a report titled “Medicare Part B: Action Needed to Reduce Financial Incentives to Prescribe 340B Drugs at Participating Hospitals.” The report compared 340B hospitals with non-340B hospitals and found that Medicare Part B drug spending was substantially higher at 340B hospitals than at non-340B hospitals; in 2012, the average per beneficiary spending at 340B hospitals was $144, compared to approximately $60 at non-340B hospitals. The report concluded that there is a financial incentive for 340B hospitals to prescribe more drugs or more expensive drugs to Medicare beneficiaries. This unnecessary spending has negative implications for the Medicare program and raises concerns about the appropriateness of health care provided to beneficiaries. GAO recommended that Congress consider “eliminating the incentive to prescribe more drugs or more expensive drugs than necessary to treat Medicare Part B beneficiaries at 340B hospitals.”