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Health Care Policy Happenings – October 1 – 5, 2018

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Public Affairs

In case you missed it, here are some key health care policy headlines from the past week.

Congress

Legislation and Committee Activity

Alexander: Senate Sends Opioids Legislation Called “Landmark” by Leader McConnell  to President – On Wednesday, the U.S.  Senate passed by a vote of 98-1, the SUPPORT for Patients and Communities Act, sponsored by Senator Lamar Alexander (R-TN). Majority Leader Mitch McConnell (R-Ky.) has called the bill, which is now heading to the President’s desk for his signature to become law, “landmark” opioids legislation. Read More

Becks Hospital Review: Hospital CEOs Petition Congress Over Prescription Drug-Pricing Program – The CEOs of more than 700 hospitals and health systems penned a letter to U.S. lawmakers, urging them to protect the 340B drug pricing program amid efforts to reduce prescription drug costs.  The letter, dated Oct. 2, came from CEOs representing hospitals and health systems from all 50 states and Washington, D.C., that participate in 340B. Read More

The Hill: Drug Companies Fear Democratic Congress – Drug companies are gearing up for a fight if Democrats take over the House. Democratic lawmakers say Republicans have gone too easy on the industry and are vowing that will change if they take power in November’s midterm elections. They are promising investigations into rising drug prices and say they will push to allow importation of cheaper medicines from other countries and to allow Medicare to negotiate prices with pharmaceutical companies. Read More

Administration

HHS

Politico: Trump’s Short-Term Health Plans Have Arrived – Health insurers and brokers are gearing up for the first open enrollment period under the Trump administration’s revamp of the individual market, creating new plans and expanding marketing efforts to take advantage of laxer restrictions on skinny short-term coverage. Read More

CMS

Proposed Rule: Medicare Program: Changes to the Medicare Claims and Medicare Prescription Drug Coverage Determination Appeals Procedures – On Tuesday, the Centers for Medicare & Medicaid Services (CMS) published a new proposed rule on the Medicare Program. Read More

Final Rule: Medicare Program – On Wednesday, CMS corrected a published final rule on Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long Term Care Hospital Prospective Payment System and Policy Changes and Fiscal Year 2019 Rates; Quality Reporting Requirements for Specific Providers; Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs (Promoting Interoperability Programs) Requirements for Eligible Hospitals, Critical Access Hospitals, and Eligible Professionals; Medicare Cost Reporting Requirements; and Physician Certification and Recertification of Claims”. Read More

CMS Accelerates Innovation and Promotes Patient Access to Medical Technology – On Wednesday, as part of broader efforts to modernize the Medicare program and bring the latest technologies and innovations to Medicare beneficiaries, CMS announced changes to the way contractors decide which technologies are covered by publishing a revision to Medicare’s Program Integrity Manual. Read More

WSJ: Trump Administration to Step Up Oversight of Hospital Watchdogs – On Thursday, the Trump administration announced “increased oversight of organizations that accredit and inspect most U.S. hospitals,” according to a report in The Wall Street Journal. “The Centers for Medicare and Medicaid Services, which grants accrediting authority, said it will change the way it measures the performance of accrediting organizations in a pilot project and will provide the public with new information about accreditors’ and hospitals’ performance.” Read More

FDA

Guidance Notice: Adaptive Designs for Clinical Trials of Drugs and Biologics – On Monday, the Food Drug Administration (FDA) published draft guidance on an adaptive designs for clinical trials of drugs and biologics. The comment period is open for 60 days. Read More

Statement from FDA Commissioner Scott Gottlieb, M.D., on New Agency Actions to Further Deter ‘Gaming’ of the Generic Drug Approval Process by the Use of Citizen Petitions – When I announced the Drug Competition Action Plan, or DCAP, in June 2017, I committed the FDA to a number of new steps to increase competition in the market for prescription drugs and to help facilitate the entry of lower-cost alternatives to improve patient access to affordable medicines. Read More

News

Bloomberg: Patients May Be Losing ‘Match Game’ With Medical Records – Electronic health records that don’t match up with the correct patient may be disrupting patient care and causing unnecessary medical testing.  Patient matching rates aren’t where they should be and are hindering the national exchange of electronic patient records, according to a Pew Charitable Trusts report released Oct. 2. Matching rates may be as low as 80 percent, meaning one in five patients may not be matched with their health record when getting treated. Read More

Looking Ahead

The House is in recess and will return on Tuesday, November 13 after the elections. The Senate is in session next week.

Foley & Lardner LLP’s (“Foley”) Bipartisan Public Policy Team has a proven track record of helping clients achieve their policy priorities at the federal, state and local levels, with extensive experience advocating on behalf of clients involved in various aspects of government engagement. Our team employs a comprehensive approach to government relations. Our work combines high-level policy development, tactical engagement with policymakers, grassroots, business and public relations strategy and targeted lobbying, along with legal representation of an international law firm, when requested by our clients. Our team maintains strong relationships with key Members of Congress, including those in House and Senate Republican and Democratic leadership, and on key committees. The Foley team is your go-to resource in Washington, D.C., for notable Health care developments.



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Refusing to Hire Medical Marijuana User Puts Employer in Jeopardy

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Nursing Home

The following is a wake-up call to all employers, especially those in the health care industry, that have adopted “zero tolerance policies.” These policies will increasingly butt up against the tidal wave of laws legalizing the medical and recreational use of marijuana.  In a just-decided case, a federal judge in Connecticut issued a ruling in favor of a medical marijuana user whose offer of employment at a nursing home was rescinded after she tested positive for marijuana.

In Noffsinger v. SSC Niantic Operating Co. d/b/a Bride Brook Nursing & Rehab Center the court ruled in favor of Katelyn Noffsinger, a candidate for employment as an Activities Manager at Bride Brook Health & Rehabilitation Center, a nursing home. The nursing home was held to have violated the Connecticut Palliative Use of Marijuana Act (PUMA) when it revoked Noffsinger’s employment offer based on her status as a lawful medical marijuana user. Noffsinger’s employment offer was contingent upon her passing a pre-employment drug test. She told the interviewer she was a qualified marijuana user under Connecticut’s medical marijuana law because she was receiving treatment for post-traumatic stress disorder. She explained that she used prescription marijuana only in the evenings as a “qualifying patient” under Connecticut law, and showed the interviewer her state registration certificate. Her pre-employment drug test came back positive for THC, and her employment offer was revoked.

Noffsinger sued the nursing home on a number of claims, including that the revocation of her employment offer violated the anti-discrimination provisions in PUMA, which state:

No employer may refuse to hire a person or may discharge, penalize or threaten an employee solely on the basis of such person’s or employee’s status as a qualifying patient or primary caregiver… Nothing in this subdivision shall restrict an employer’s ability to prohibit the use of intoxicating substances during work hours or restrict an employer’s ability to discipline an employee for being under the influence of intoxicating substances during work hours.

Conn. Gen. Stat. § 21a-408p(b)(3).

The nursing home argued that it was exempt from the anti-discrimination provisions in PUMA because it was subject to the federal Drug Free Workplace Act (DFWA), which is located at 41 U.S.C. § 8102. The court also rejected that argument. Instead, the court ruled that the DFWA does not prohibit federal contractors from employing someone who uses illegal drugs outside the workplace. Moreover, the court further ruled that the DFWA does not prohibit federal contracts from employing individuals who use medical marijuana outside the workplace in accordance with a program provided by state law. The court also ruled that nothing in the DFWA required pre-employment drug testing.

The nursing home also argued that that the federal False Claims Act prevented it from hiring Noffsinger because employment of someone who uses medical marijuana in violation of federal law would amount to defrauding the federal government, which could therefore violate the False Claims Act.  The court rejected this argument, too, and instead ruled that Noffsinger’s medical marijuana use outside work hours would not constitute fraud for purposes of the False Claims Act.

This decision provides some valuable lessons for employers who are confronted with the increasingly profound conflict between the way state laws and federal laws treat the use of marijuana:

  • Despite some form of legalization in over 30 states, under federal law marijuana remains a Schedule I controlled substance (along with substances like heroin). This creates a compliance paradox for employers, especially those in the health care industry who are subject to heavy federal regulation.
  • Not every state’s marijuana law has an anti-retailiation provision like Connecticut’s law. It is important for employers to know the marijuana laws in each of the states they have employees.
  • Even in states whose marijuana laws have no anti-retaliation provision, the duty to accommodate disabilities may conflict with the desire to prohibit employees from using marijuana, even when off-duty.
  • The particular job that an employee performs may give a cannabis-banning employer more leeway. For example, contrast the health, safety, and liability risks associated with the job duties of an Activities Manager in a nursing home with those of the job duties of a neurosurgeon in a hospital.
  • Employers who have a zero tolerance policy that extends to off-duty use need to rethink the defensibility of never accommodating what might otherwise be lawful marijuana use under state law.

As always, when in doubt, an employer should consult trusted legal counsel, especially in areas of compliance like medical and recreational marijuana use by employees.



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Health Care Policy Happenings – September 17-21, 2018

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Here are some key health care policy headlines from the past week that you may have missed.

Congress

Legislation and Committee Activity

Bloomberg: Opioids Compromise Already in the Works in Congress – Congress is working on a compromise package of bills to fight the opioid crisis and hopes to finish voting on it in the next two weeks. The Senate and House began working on the compromise before the Senate passed its package  on Sept. 17, Sen. Lamar Alexander (R-TN) said. They aim to have the package ready by Sept. 21, he said. Read More

Senate Passes Final Defense, Labor-HHS-Education Appropriations Minibus Conference Report – On Tuesday, Senate Appropriations Committee Chairman, Richard Shelby (R-AL),  praised the Senate’s passage of the final conference agreement reached on H.R. 6157, the second of three Fiscal Year 2019 minibus appropriations packages, which includes funding bills for the Department of Defense and Labor, Health and Human Services, Education, and Related Agencies subcommittees.  The bill also contains a continuing resolution (CR) through December 7, 2018, for any appropriations bills not enacted before October 1, 2018.  Following passage in the House, which is expected to vote on the legislation next week, the package will be sent to the President’s desk for his signature. Read More

Bipartisan Bill to Prohibit “Gag Clauses” That Can Cause Consumers to Overpay for Prescriptions Passes Senate – On Monday, by a vote of 98-2, the Senate passed legislation authored by U.S. Senators Susan Collins (R-ME) and Claire McCaskill (D-MO) to remove barriers that can prevent patients from paying the lowest possible prices for their prescription drugs. Read More

Stat: Top Trump Health Official Calls on Congress to do More on Drug Pricing – On Thursday, A top U.S. health official called on lawmakers in Congress to do more to help bring down drug prices, saying that the Trump administration had “given them a lot of opportunities to step in here.” I think Congress can do more,” said Joe Grogan, associate director for health programs at the Office of Management and Budget. Read More

Administration

OMB

Bloomberg: Health Information Blocking Proposal Under Review – On Monday, a long-awaited proposal designed to free up the electronic exchange of health-care information is under review by the government. The White House Office of Management and Budget received a proposed rule from the Health and Human Services Office for the National Coordinator for Health Information Technology that would define and prohibit information blocking by health system IT networks. Read More

HHS

Using Telemedicine to Combat the Opioid Epidemic – Combatting the opioid crisis is a top priority for the Trump Administration and HHS. We are making progress. Just last week we released the 2017 National Survey on Drug Use and Health (NSDUH) data, which showed significantly more people received treatment for substance use disorder in 2017 than in 2016; this was especially true for those with heroin-related opioid use disorders.  Read More

Politico: White House Seeks Telemedicine Expansion Advice – This week, telemedicine industry groups descended on Washington for the behind-closed doors meeting, where they complained to officials from the White House, HHS and the Federal Trade Commission about policy barriers to widespread access; many of them advocated for completely eliminating originating site restrictions for reimbursement. Read More

CMS

Medicare and Medicaid Programs; Proposed Regulatory Provisions to Promote Program Efficiency, Transparency, and Burden Reduction – On Monday, The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule to revise the applicable conditions of participation (CoPs) for providers and conditions for coverage (CfCs) as a continuation of our efforts to reduce regulatory burden in accordance with the January 30, 2017 Executive Order “Reducing Regulation and Controlling Regulatory Costs” (Executive Order 13771).  Read More

Looking Ahead

The Senate and House are in session next week. Government fiscal year ends on Sunday, September 30.

On Tuesday, the Senate Health, Education, Labor and Pensions (HELP) Subcommittee on Primary Health and Retirement Security will hold a hearing on health care in rural America.  Read More

On Thursday, the House Energy and Commerce Subcommittee on Health will hold a hearing on reducing U.S. maternal mortality. Read More

On Thursday, the Senate Health, Education, Labor and Pensions (HELP) Committee will hold a hearing on Reducing Health Care Costs: Improving Affordability Through Innovation. Read More

Foley & Lardner LLP’s (“Foley”) Bipartisan Public Policy Team has a proven track record of helping clients achieve their policy priorities at the federal, state and local levels, with extensive experience advocating on behalf of clients involved in various aspects of government engagement. Our team employs a comprehensive approach to government relations. Our work combines high-level policy development, tactical engagement with policymakers, grassroots, business and public relations strategy and targeted lobbying, along with legal representation of an international law firm, when requested by our clients. Our team maintains strong relationships with key Members of Congress, including those in House and Senate Republican and Democratic leadership, and on key committees. The Foley team is your go-to resource in Washington, D.C., for notable Health care developments.



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340B: DC Circuit Affirms Dismissal of Challenge to 2018 Reimbursement Cuts for 340B Hospitals; New Cuts Already Being Proposed by CMS for 2019

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On Tuesday, July 17, 2018, the United States Court of Appeals for the District of Columbia ended a challenge brought by hospitals and hospital associations to the nearly 28 percent reimbursement cuts for 340B hospitals under the Medicare program. The payment cuts were finalized in the calendar year (CY) 2018 Medicare Outpatient Prospective Payment System (OPPS) rule and took effect on January 1, 2018. Compounding the impact of the failure of the litigation for affected 340B hospitals, CMS has now proposed to extend the 340B hospital payment cuts to new locations as part of the proposed CY 2019 Medicare OPPS rule. If finalized, the new payment cuts would take effect on January 1, 2019.

The D.C. Circuit Court’s Opinion

The appellate court affirmed the December 2017 ruling by the United States District Court dismissing the case.  The decision did not address whether HHS had authority in the OPPS to make the 340B reimbursement cuts (as plaintiffs had argued), but instead focused on whether the district court had subject matter jurisdiction to hear the plaintiffs’ challenge when the plaintiffs had not yet presented a claim for payment to the Department of Health and Human Services (HHS) for final decision.

To obtain judicial review of Medicare reimbursement disputes, section 205(g) of the Social Security Act (42 U.S.C. § 405(g)) requires that a claim be presented to the Secretary, and that a plaintiff exhaust administrative remedies, before having an opportunity to pursue a matter in federal court. At the time the action was brought, the 340B hospital rate cuts were not yet effective, and so no plaintiff had yet submitted (i.e., presented) a claim for reimbursement, and the district court dismissed the case on jurisdictional grounds. On appeal, the plaintiffs, including the American Hospital Association, America’s Essential Hospitals, and the Association of American Medical Colleges (the hospitals), argued that they had met the presentment requirement by submitting comments in notice and comment rulemaking in response to the proposed cut. Alternatively, the hospitals argued they had cured any defect in presentment because they made payment demands to HHS during the pendency of the appeal after the new payment cuts went into effect on January 1, 2018.

The court rejected the hospitals’ argument that comments made in notice-and-comment rulemaking could satisfy the presentment requirement. The court cited precedent finding that the presentment requirement generally prevents anticipatory legal challenges to Medicare rules and regulations. Although the hospitals submitted demands for payment to HHS while the case was on appeal from the district court’s dismissal, the court also found that these demands were too late to establish subject matter jurisdiction, which must be done at  the district court level.

Finally, because it concluded that it lacked subject-matter jurisdiction to hear the case, the court could not consider the merits of the case.  The court noted that it need not consider HHS’s contention that the Medicare statute forecloses judicial review even if the hospitals were able to satisfy the presentment and exhaustion requirements.

The hospitals have the option in this case of requesting review by the U.S. Supreme Court. They may also choose to pursue a new challenge by identifying a plaintiff that has presented a claim for reimbursement under the CY 2018 reduced reimbursement. Any such challenge would need to first proceed through CMS’ administrative process before review by a federal court could address the validity of CMS’ rulemaking.

CMS Proposes to Extend 340B Hospital Rate Cuts to Site-Neutral Hospital Outpatient Departments for 2019

In the recently released proposed CY 2019 OPPS rule, CMS proposes to expand last year’s 340B hospital rate cuts to also apply to those off-campus, non-excepted hospital outpatient departments (HOPDs) that are subject to Medicare’s site neutrality rules (site-neutral HOPDs).  Currently, site-neutral HOPDs have their Medicare OPPS reimbursement reduced by 60%, to approximate payment rates under the Medicare physician fee schedule. However, these reductions are not applied to drugs that are separately payable under the OPPS.  In addition, while last year’s (CY 2018) OPPS reduced reimbursement to 340B hospitals for separately payable drugs purchased under the 340B program, CMS did not apply the payment reductions to site-neutral HOPDs.  Under current law, separately payable drugs dispensed at a site-neutral HOPD are reimbursed at ASP + 6%, which approximates the reimbursement available under the Medicare physician fee schedule.

The proposed CY 2019 OPPS rule would reduce reimbursement for separately payable drugs billed by site-neutral HOPDs to ASP – 22.5%. CMS defends this proposal by claiming it is necessary to prevent 340B hospitals from having a “perverse incentive” to move 340B drug-related services to site-neutral HOPDs where reimbursement for the separately payable drugs is better than at other HOPDs (reimbursement for other services is significantly lower). The result of the proposed change is to once again create equivalence between 340B hospital HOPDs that are and are not subject to the site neutrality rules. However, site-neutral HOPDs will now be reimbursed significantly less than a freestanding physician office for separately payable drugs purchased under the 340B program.

Reimbursement for 340B Hospitals of Drugs that are Separately Payable under the OPPS and Purchased under 340B

CY Site-Neutral HOPD Other HOPD
2017 ASP + 6% ASP + 6%
2018 ASP + 6% ASP – 22.5%
2019 ASP – 22.5% ASP – 22.5%

If finalized, CMS’ extension of the 340B hospital rate cuts will further depress reimbursement for 340B hospitals, and will hinder the creation of new, off-campus HOPDs.  Comments on the proposed OPPS rule may be submitted until September 24, 2018.

For more information on Foley’s Health Care Industry Team including the team, publications, and other materials, visit foley.com/health-care.

 



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Medicare Proposes (and Rejects) New Telehealth Services for 2019

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The telemedicine industry was pleased to learn CMS recently proposed adding new services to its list of Medicare-covered telehealth services.  But what may be more interesting are the services CMS declined to add, and why.  This article summarizes the newly-proposed additions as well as the services CMS rejected, explores some reasons for CMS’ decisions, and describes how industry advocates can submit comments to CMS and make their voice heard on these new proposals.  The public comment period is open through September 10, 2018.

Medicare Telehealth Services

Under Medicare, the term “telehealth services” refers to a specific set of services practitioners normally furnish in-person, but for which CMS will make payment “when they are instead furnished using interactive, real-time telecommunication technology.” The Social Security Act governs what telehealth services are, and are not, covered under Medicare. Generally, there are five statutory conditions required for Medicare coverage of telehealth services:

  1. The beneficiary is located in a qualifying rural area;
  2. The beneficiary is located at one of eight qualifying originating sites;
  3. The services are provided by one of ten distant site practitioners eligible to furnish and receive Medicare payment for telehealth services;
  4. The beneficiary and distant site practitioner communicate via an interactive audio and video telecommunications system that permits real-time communication between them; and
  5. The Current Procedural Terminology/Healthcare Common Procedure Coding System (CPT/HCPCs) code for the service itself is named on the list of covered Medicare telehealth services.

So long as the distant site practitioner complies with each of the above requirements, the telehealth service furnished via a telecommunication system will substitute for an in-person encounter, and it should meet the requirements for Medicare coverage assuming other standard coverage provisions are met.

How Does CMS Assess New Telehealth Services?

There is a specific process to request additions or deletions from the list of covered telehealth services. Initially, CMS assigns each proposed code to one of two buckets: Category 1 and Category 2. Category 1 includes services that are similar to professional consultations, office visits, and office psychiatry services that are currently on the list of telehealth services.  Category 2 includes services that are not similar to those on the current list of telehealth services. Proposals that fall into Category 2 undergo a more exacting review, including whether the proposed service will produce demonstrated clinical benefit for patients.  When submitting a proposal to request coverage of a new service/code, be sure to understand which category the service falls under, so you can best know the type of clinical and nonclinical support documentation CMS expects to accompany your submission.

When Does CMS Accept Requests for New Telehealth Services?

Historically, CMS has accepted requests for additions or deletions to the Medicare telehealth services list until December 31 of each calendar year. However, for 2019 and onward, CMS proposed changing the deadline to February 10 of each year. This change is designed to better align with the deadline for receipt of code value recommendations from the Relative Value Scale Update Committee.

What Telehealth Services Did CMS Add for 2019?

For 2019, CMS proposed adding two codes to the covered Medicare telehealth service list:

  1. HCPCS G0513 “Prolonged preventive service(s) (beyond the typical service time of the primary procedure), in the office or other outpatient setting requiring direct patient contact beyond the usual services; first 30 minutes;” and
  2. HCPCS G0514 “Prolonged preventive service(s) (beyond the typical service time of the primary procedure), in the office or other outpatient setting requiring direct patient contact beyond the usual service; each additional 30 minutes.”

Both of these services are sufficiently similar to services already on the list of Medicare telehealth services, so CMS classified them as Category 1.  Accordingly, they enjoyed the streamlined review process. Subject to public comment, these services are expected to be added to the list of Medicare telehealth services when the final rule is published in November.

What Telehealth Services Did CMS Reject for 2019?

Chronic Care Remote Physiologic Monitoring

Requestors proposed to add the following “Chronic Care Remote Physiologic Monitoring” codes to the list of Medicare telehealth services for 2019:

  1. CPT 990X0 (Remote monitoring of physiologic parameter(s) (eg, weight, blood pressure, pulse oximetry, respiratory flow rate), initial; set-up and patient education of use of equipment);
  2. CPT 990X1 (Remote monitoring of physiologic parameter(s) (eg, weight, blood, pulse oximetry, respiratory flow rate), initial; device(s) supply with daily recording(s) or programmed alert(s) transmission, each 30 days); and
  3. CPT 994X9 (Remote physiologic monitoring treatment management services, 20 minutes or more of clinical staff/physician/other qualified healthcare professional time in a calendar month requiring interactive communication with the patient/caregiver during the month).

However, because these codes can be furnished without the beneficiary’s face-to-face presence and using any number of non-face-to-face means of communication, CMS did not propose adding them to the list of Medicare telehealth services. CMS did propose covering these new RPM codes under the Physician Fee Schedule, albeit not as telehealth services.  These new codes are intended as a follow-up and expansion to CMS’ current coverage of CPT 99091 (Remote Patient Monitoring).

Note: CPT codes that contain an ‘X’ (e.g., 994X9) are placeholder codes that are intended, through the first three digits, to give readers an idea of the proposed placement in the code set of the potential code changes. These codes will not be used for claims reporting and will be removed and not retained when the final CPT Datafiles are distributed on August 31st of each year. To report the services for ‘X’ codes, be sure to refer to the actual codes as they appear in the CPT Datafiles publication distributed on or before August 31st of each year.

Interprofessional Internet Consultations

CMS similarly rejected requests to cover “Interprofessional Internet Consultation” codes (CPT 994X0, 994X6) as telehealth services, noting how these codes describe services that are inherently non face-to-face. Fortunately, CMS did propose covering these codes under the Physician Fee Schedule, just not as telehealth services.  That means these new codes are not subject to the same statutory restrictions of rural geography or qualified originating site as Medicare “telehealth services.”

Initial Hospital Care Services

Advocates asked CMS to add “Initial Hospital Care” CPT codes to the Medicare telehealth service list, something that has been requested (and rejected) in prior years.  The requested codes were:

  1. CPT 99221 (Initial hospital care, per day, for the evaluation and management of a patient, which requires 3 key components: A detailed or comprehensive history; A detailed or comprehensive examination; and Medical decision making that is straightforward or of low complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient’s and/or family needs. Usually the problem(s) requiring admission are of low severity.);
  2. CPT 99222 (for moderate complexity and moderate severity); and
  3. CPT 99223 (for high complexity and high severity).

CMS rejected adding these as covered telehealth services. The explanation was because CMS believes “it is critical that the initial hospital visit by the admitting practitioner be conducted in person to ensure that the practitioner with ongoing treatment responsibility comprehensively assesses the patient’s condition upon admission to the hospital through a thorough in-person examination.”

Hospitals, health systems, and telemedicine companies delivering inpatient hospital services should pay particular attention to this, as there is a material difference between these CPT codes and, for example, the telehealth consultation G-codes (which are covered by Medicare). With the cost-effectiveness, quality and access improvement, and high provider and patient satisfaction levels of telemedicine services, we have seen a continued expansion of this technology in the hospital setting (both emergency department and inpatient units).

Hospitals should take the time to understand when CMS allows telehealth services to be delivered to hospital inpatients, the billing and reimbursement implications, and how to build a compliant operational workflow (both under federal law, such as EMTALA and Medicare Conditions of Participation, but also state laws, such as scope of practice, supervision, and facility licensure).  This is particularly true as Medicare Administrative Contractors are expected to implement billing audits of telehealth services in the wake of the recent OIG report finding that 31% of telehealth claims did not meet the Medicare conditions for payment for telehealth services and should not have been paid. A companion OIG report auditing state Medicaid payments for telemedicine services remains in the works, and is expected to be released next year.

Frequency Limitations on Subsequent Hospital Care Services and Subsequent Nursing Facility Care Services

CMS also rejected requests to remove the frequency limitations on certain telehealth services already covered by Medicare.  They are:

  1. CPT codes 99231, 99232, and 99233 (Subsequent Hospital Care Services);
  2. CPT codes 99307, 99308, 99309, and 99310 (Subsequent Nursing Facility Care Services).

Unlike the initial hospital care services described above, Medicare does cover certain subsequent hospital care services delivered via telemedicine. However, there are frequency limits on these services (once every three days for hospital inpatient, and once every thirty days for skilled nursing facility resident). CMS rejected requests to remove the three day frequency limitation for Subsequent Hospital Care Services because CMS “continues to believe that admitting practitioners should continue to make appropriate in-person visits to all patients who need such care during their hospitalization.” Similarly, CMS refused to lift the thirty day frequency limitation for Subsequent Nursing Facility Care Services because CMS “continues to have concerns regarding the potential acuity and complexity of [skilled nursing facility] inpatients.”

Expanding the Use of Telehealth under the Bipartisan Budget Act of 2018

The Bipartisan Budget Act of 2018 made five important statutory changes to telehealth services under the Medicare program. CMS’ proposed rule addressed implementation of two of these changes as follows:

End-Stage Renal Disease Services: Patients at Home

The Act allows an individual determined to have end-stage renal disease receiving home dialysis to choose to receive certain monthly end-stage rental disease-related clinical assessments via telehealth.  CMS proposed including renal dialysis facilities and the home of a renal dialysis individual as Medicare telehealth originating sites for the purpose of meeting required conditions for Medicare Part B payment.  Should this change be adopted (and we anticipate it will), providers can deliver these services to patients in their homes and Medicare will reimburse for it.  However, there would be no originating site facility fee paid when the originating site is the patient’s home.

Telestroke Services: New Modifier and Mobile Stroke Units

The Act added special rules for telehealth services for purposes of diagnosis, evaluation, or treatment of symptoms of an acute stroke, including removing any restriction on the geographic locations and the types of originating sites where acute stroke telehealth services can be furnished.  This means telestroke will be covered by Medicare at hospitals in rural and urban areas, alike (which is a great improvement because patients living in cities also need stroke care).

In order to accommodate this change, CMS proposed creating a new modifier that would be used to identify acute stroke telehealth services.  The industry might be disappointed or frustrated to learn they need to (again) reprogram their EMR and billing software to create yet another telehealth modifier, particularly as CMS just last year eliminated the requirement to use the GT modifier and instead requires providers to bill using Place of Service Code 02.

In addition, CMS proposed adding “mobile stroke units” as a new originating site for acute stroke telehealth service.  The proposed rule defines mobile stroke unit defined as “a mobile unit that furnishes services to diagnose, evaluate, and/or treat symptoms of an acute stroke.”  In many regards, it appears that a telemedicine-augmented ambulance might meet the definition of a mobile stroke unit, and companies interested in exploring this new option may want to submit comments to CMS now and seek clarification or further details on how CMS expects billing to be conducted for telehealth services delivered while the patient is in a mobile stroke unit.

How to Submit Comments

Telemedicine industry advocates, entrepreneurs, and healthcare providers have the opportunity to comment on the proposed rule until 5 p.m. September 10, 2018.  Anyone may submit comments – anonymously or otherwise – via electronic submission at this link. Alternatively, commenters may submit comments by mail to:

  • Regular Mail: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1693-P, O. Box 8016, Baltimore, MD 21244-8016.
  • Express overnight mail: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1693-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.

If submitting via mail, please be sure to allow time for comments to be received before the closing date.

For more information on telemedicine, telehealth, virtual care, and other health innovations, including the team, publications, and other materials, visit Foley’s Telemedicine and Digital Health Industry Team and read our 2017 Telemedicine and Digital Health Executive Survey.



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The Association Health Plan Challenge: The States Initiate Litigation Challenging the Final Rule

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government building

In our blog post of July 10, 2018, we discussed the key elements of the Final Rule issued on June 21, 2018 with respect to Association Health Plans (AHPs). As we noted, the expansion of ERISA’s definition of an employer and the other elements of the Final Rule designed to expand insurance opportunities for small employers, including sole proprietorships had been opposed by a variety of interests, including the Attorneys General of a number of States, some of whom promised litigation to stop the implementation of the Final Rule prior to the potential effective date of September 1, 2018 for fully insured AHPs.

The States’ Complaint

On July 26, 2018, those States (and the District of Columbia) seeking to challenge the Final Rule did so in an action filed in the D. C. Federal District Court. State of New York et al. v. United States Department of Labor et al, Civ. Action 18-1747 [Case1:18-cv-01747], D.C. D.C, filed July 26, 2018. The plaintiff States are New York, Massachusetts, DC, California, Delaware, Kentucky, Maryland, New Jersey, Oregon, Pennsylvania, Virginia, and Washington.

The overall policy assertion made in the complaint is that the true effort in the Final Rule is to “undermine” and “dismantle” the Affordable Care Act (ACA). This is alleged to occur as a result of “manipulation of [ERISA]” to shift a larger number of small employers into the large group insurance market, “because the ACA’s core protections do not apply to that market.” From plaintiffs’ perspective, the new AHPs created under the Final Rule would lack the incentives and protections provided under the existing ERISA framework, which would result in less coverage and destabilizing impact on both the individual and small group markets. As plaintiffs see it, “the Final Rule would return the country to the pre-ACA world where people with pre-existing conditions will lack federal protections that enable …quality, affordable health insurance.”

The Legal Allegations

From a legal perspective, the action arises under the provisions of the Administrative Procedure Act which allows challenges to rule-making on the basis that the adoption of the rule was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C, 706(2)(A). Plaintiffs make five claims that this is the case.

Plaintiffs’ first claim is that the overall goal of applying the same standards to large and small employers violates the provisions of the ACA, and the ACA’s overall structure, by allowing AHPs to be treated as “large employers” for some purposes, but not for purposes of the shared responsibility protection. That protection provides that large employers (defined as any company or organization that has an average of at least 50 full-time employees) are not offering health coverage if they fail to offer to its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage under an eligible employer-sponsored plan. Thus, the assertion is that by allowing large employer treatment for otherwise small employers, but not requiring these entities to meet the coverage requirements, there is created a new plan outside of the ACA limitations and requirements.

The second claim is that the treatment of self-employed individuals (a “working owner”), with no other employees, as both an employer or an employee is contrary to ERISA as well as long settled case law. Citing the ERISA definition of employer —  “such term shall include only employers of two or more employees” [42 U.S.C. § 300gg-91(g)(6)]—the contention is that this proposed treatment simply is inconsistent with the statutory definition. Thus, a working owner, without other employees could not be an employer capable of being in an association of employers creating an AHP.

One of the major changes in the Final Rule was to change the standards for associations of qualifying employers able to offer group insurance. Under the Final Rule, it would be acceptable for an association to have the primary goal of selling insurance, as long as there was some other type of linkage forming the “commonality of interest.” The Final Rule was not specific in terms of what might be sufficient as to what that might be, but noted that the applicable nexus might now be geographic or simply in the same “trade, industry, line of business or profession”.

Plaintiffs’ third claim is that the new Final Rule standard is simply insufficient to meet the necessary and established commonality test under ERISA, and in effect, allows organizations with non-substantive relationships other than the sale of insurance, to meet the necessary test.

The fourth and fifth claims are more general in nature. The Plaintiffs claim that the Final Rule is in excess of the statutory authority because there is nothing in the Final Rule that is consistent with a grant of authority to implement ERISA, as the effort here is to make a change to the definition of AHPs, to which Congress itself has repeatedly objected. [It is worth noting that similar types of arguments were made by 29 States seeking to prevent prior Obama Administration efforts in a variety of other fields, for example in regulatory efforts affecting the coal industry.] Finally, plaintiffs’ claim that the consideration of the Final Rule failed to appropriately consider the history of abuse in the era of AHPs or other multiple employer welfare plans (MEWAs) which were not subject to stringent oversight by many states as such plans oftentimes claimed, incorrectly, that ERISA pre-empted state regulation.

What’s Next

In the ordinary course, the Federal defendants will have 60 days to respond to the Complaint. Assuming there is not an effort to preliminarily enjoin the implementation date, and that the case will be resolved ultimately on cross-motions for summary judgment, it is likely the case will not be resolved at the District Court level for 6-9 months.

From the perspective of those contemplating creating an AHP which was only viable under the provisions of the Final Rule, and which is enabled by appropriate state legislation or regulations, the question is whether to move forward with the investment required for creation and investment in this vehicle. That analysis should be based not just on a view of the likelihood of success of the Federal Court challenge, but also of the likelihood that the state of residence of a new AHP will have the necessary enabling legislation. That is a state by state analysis, and at this point it appears that at least New York, Massachusetts, Vermont and Pennsylvania have indicated that they will not allow the creation of AHPs for the sole purpose of buying insurance through the large group market.

For more information on Foley’s Health Care Industry Team including the team, publications, and other materials, visit foley.com/health-care.



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Health Care Information Exchanges and Price Transparency Initiatives: CMS Requests Input from Providers

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data mining

On July 12, 2018, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule introducing changes to the Medicare physician fee schedule, and soliciting comments from providers on CMS data sharing initiatives.  In the proposed rule, CMS requests comments on methods to promote the exchange of health care information between health care providers, and CMS initiatives to encourage price transparency for health care providers and suppliers.

Supporting Transitions of Care via Electronic Information Exchange

Medicare and Medicaid providers are rapidly implementing health information technology and electronic health record (EHR) systems.  While these new technologies provide many benefits, CMS acknowledges that health care providers and patients face obstacles in exchanging health information across the continuum of care, particularly when patients are discharged from a hospital.  CMS requests feedback from stakeholders on ways to use CMS health and safety standards, such as the Medicare Conditions of Participation, to advance the electronic exchange of information that supports the transition of care between hospitals and community providers.

In the proposed rule, CMS requests feedback about whether new requirements for the interoperability and electronic exchange of health information are necessary, a reasonable implementation timeframe for compliance with new interoperability requirements, and whether such requirements would help improve patient care.  CMS has also solicited comments on the operational considerations, legal restraints, or other barriers that providers and suppliers would face in implementing these initiatives.  CMS welcomes comments from the public on how to best accomplish its goal of fully interoperable health information technology and EHR systems for Medicare and Medicaid providers and suppliers.

Improving Price Transparency

CMS has also requested public comment from providers and suppliers on improving consumer access to information about potential financial liability for health care services.  Over the past several years, CMS has engaged in various efforts to require providers and suppliers to make pricing information on their “standard charges” available to the public. Most recently, the proposed rule for the Fiscal Year 2019 Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals requires hospitals make their standard charges available online.  CMS has requested public comment on how to define “standard charges” for these types of public reporting purposes.  CMS seeks feedback on whether providers and suppliers should be required to inform patients of their out-of-pocket costs for a service prior to performing the service, and how providers and suppliers should engage in other CMS price transparency initiatives.

The Impact of EHR Interoperability and Price Transparency Requirements

CMS EHR interoperability requirements have the potential to impose additional regulatory obligations on Medicare and Medicaid providers, and may result in significant investment in technology upgrades.  The price transparency disclosure obligations may also present unique financial challenges for hospitals and other health care providers.  Comments on the requests for information are due on September 10, 2018.

For more information on Foley’s Health Care Industry Team including the team, publications, and other materials, visit foley.com/health-care.



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Health Care Policy Happenings – September 4-7

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Congress is back in session after the August recess and, as expected, a flurry of activity took place.  Here are some key health care policy headlines from the past week that you may have missed.

Congress 

Legislation and Committee Activity

Senate Agrees to Vote Next Week on The Opioid Crisis Response Act of 2018 – On Thursday, the Senate agreed to vote next week on the Opioid Crisis Response Act of 2018 (S. 2680)—a bipartisan package of over 70 proposals recommended to the full Senate by five committees: Health, Finance, Judiciary, Commerce and Banking.  HELP Committee Chairman Lamar Alexander (R-TN) released a section by section of The Opioid Crisis Response Act of 2018. Read More

Washington Times: House Plans to Take its Next Swing at Obamacare  – House Republicans are taking another stab at undoing or postponing parts of Obamacare, according to Ways and Means Committee Chairman Kevin Brady, (R-TX). The House will take up measures to undo or delay the employer mandate as well as the “Cadillac” tax on health insurance plans, as it has done several times before since Obamacare, formally known as the Affordable Care Act, went into effect. On Friday, House Majority Leader Kevin McCarthy announced that the House will take up the package of bills next week. Read More

The Hill: Trump Health Chief Meets with GOP Lawmakers on Lowering Drug Prices – On Thursday, Secretary of Health and Human Services Alex Azar met with Republican lawmakers on the House Ways and Means Committee to discuss ways to lower drug prices. President Trump has railed against drug prices and his administration has rolled out a series of actions seeking to lower prices, though many say the moves have been relatively modest. House Ways and Means Chairman Kevin Brady (R-TX) said that Azar gave lawmakers an update on steps the administration has taken on drug prices, stating “We talked about what steps can Congress take to help lower these prices as well.”  Read More

E&C Leaders Seek More Information on Role of Pharmacy Benefit Managers in Impacting Drug Prices – Last week, Energy and Commerce Committee leaders sent letters to various Pharmacy Benefit Managers (PBMs) to better understand the role of PBMs in the drug supply chain. Read More

Bipartisan, Bicameral Leaders Urge Effective Administration of 340B Drug Pricing Program – Last week,  House Energy and Commerce Committee Chairman Greg Walden (R-OR), Energy and Commerce Committee Ranking Member Frank Pallone, Jr. (D-NJ), Senate Health, Education, Labor, and Pensions (HELP) Committee Chairman Lamar Alexander (R-TN), and Senate HELP Committee Ranking Member Patty Murray (D-WA) sent a letter to the Health Resources and Services Administration (HRSA) regarding the fact that they have not used their rulemaking authority to implement regulations to better administer the 340B Drug Pricing Program. Read More

Supreme Court

Vox: Here’s What we Learned from Kavanaugh’s 2-Day Questioning Marathon – Democratic senators targeted Brett Kavanaugh’s views on executive power, abortion rights, and health care during two days of questioning this week. Lawmakers also focused heavily on Kavanaugh’s inconsistencies between his 2006 confirmation testimony and documentation that’s emerged since, as well as questionable meetings he may have had pertaining to the Mueller investigation. And they hammered on concerns that the vetting process for Kavanaugh — which has been incredibly partisan — has not been transparent enough. Read More

States

The Hill: ObamaCare Premiums to Rise Just 3.6 Percent Next Year, Sign of Stability – ObamaCare premiums will rise by an average of just 3.6 percent for next year according to a new analysis, a sign of stabilization in the law’s markets.  The analysis from the consulting firm Avalere and the Associated Press looked at 47 states where data was available and found that premium increases will be much lower for 2019 compared to the 30 percent increase on average in 2018. Read More

Primaries

New York Times: 2 States Had Primary Elections This Week. Here’s What We Learned. – An incumbent congressman was unseated in Massachusetts on Tuesday, and a senator beat back a challenger in Delaware on Thursday in two of the final primaries of the 2018 midterm elections. Read More

New Hampshire and Rhode Island will hold the final round of primaries next week. Read More

Looking Ahead

The Senate and House are in session next week.

On Thursday, the House Veteran Affairs Technology Modernization Subcommittee  will hold a hearing on The Role of the Interagency Program Office in VA Electronic Health Record Modernization. Read More

On Thursday, the House Energy and Commerce Health Subcommittee will hold a hearing to review Regulatory Burdens that Impede Value-Based Arrangements in Quality Care Improvement. Read More

Foley & Lardner LLP’s (“Foley”) Bipartisan Public Policy Team has a proven track record of helping clients achieve their policy priorities at the federal, state and local levels, with extensive experience advocating on behalf of clients involved in various aspects of government engagement. Our team employs a comprehensive approach to government relations. Our work combines high-level policy development, tactical engagement with policymakers, grassroots, business and public relations strategy and targeted lobbying, along with legal representation of an international law firm, when requested by our clients. Our team maintains strong relationships with key Members of Congress, including those in House and Senate Republican and Democratic leadership, and on key committees. The Foley team is your go-to resource in Washington, D.C., for notable Health care developments.



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Telemedicine Investors Roundtable Focuses on Progress, Barriers, and ROI

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medicaid

As telemedicine continues to see significant traction, health care organizations are working to implement telemedicine programs and  create technology infrastructures all while working within the current legislative requirements. Foley & Lardner LLP and Ziegler recently had an opportunity to sit down with 15 leaders in telemedicine to discuss the progress, barriers, and return on investment as the industry shifts from infancy to adolescence.

The session was led by three telemedicine industry trailblazers: Iris Berman RN, MSN, CCRN-k, VP, Telehealth Services,  Northwell Health;  Evan Cohen, Corporate Development Director, Genoa Healthcare; and Shawn Farrell, East VP of Business Development, American Well. American Well, including its recent acquisition of Avizia, offers a full end-to-end telemedicine solution for health systems, providers, and payers. Northwell Health is the largest clinically-integrated healthcare network in New York State, with 21 hospitals, and a patient base of eight million. Northwell has expanded its telemedicine program and utilizes its own installed telemedicine platform outsourced to American Well to help facilitate their telemedicine program; and  Genoa offers a  telepsychiatry division serving community-based mental health centers.

Signals of Growing Telemedicine Momentum

While health systems have competing goals on capital investment,  information technology is becoming a central strategy for organization leadership,  not just the information technology department. CEOs understand the importance of this investment and are making technology a priority.

Joint Ventures – More and more health systems are introducing a venture arm and are looking to invest in innovative technologies where systems own a piece of a technology platform. This enables the organization to have a  say in the software development and ensures that it is customized to their needs. Telemedicine is a technology that has seen an increase in such investment.  As a result, organizations are showing ROI and not an ongoing expense  for payment of subscription fees.

Payer/Provider Collaboration – Payers are collaborating with providers to provide telemedicine services. Medicare Advantage plans especially are likely to push telemedicine and also have the flexibility to incentivize providers and make the necessary investments.

In addition, according to Ziegler, behavioral health, post-acute care, senior housing and chronic care management are all areas expected to see significant growth in telemedicine.

Current Obstacles

Interoperability –Although not unique to telemedicine, interoperability remains one of the biggest barriers. This is especially true within hospital systems that acquire another hospital using a different EMR platform. At Northwell, for example,  interoperability is a must and a requirement that they place on their technology vendors.  Technology needs to be seamless and easy for end users in order to provide value.

Credentialing – Credentialing of a treating physician can be an issue for telemedicine especially when the destination hospital treats the patient who returns to another State or country.  Getting peer credentialed amongst payers and provider and common State physician licensure remain material obstacles to telemedicine.

Ownership of the Patient—Does the provider or the payer  “own” the patient relationship?  The law indicates the provider,  but narrow networks and value-based payment will reduce provider choice. Plans may drive telemedicine  adoption more than any other player especially as payer-provider convergence trends continue.

The Secret to Measuring Return on Investment

When a health care organization begins to plan for a telemedicine investment, how do providers or payers make an investment decision on telemedicine? What’s the right ROI measurement? What does this show about adoption more broadly to influence private equity (PE) investment in the space? Last year, the National Quality Forum (NQF) released a framework for measuring the quality and impact of telehealth services. To assess telehealth, NQF focuses on four areas: patient access to care, financial impact on patients and providers, patient and clinician experience and effectiveness of clinical and operational systems. Aside from the 17 NQF-endorsed measures to measure telehealth quality, there is no other standard for measuring return on investment.

For Northwell, its telemedicine efforts began with an e-ICU monitoring product.  The strategy was to introduce this capability internally, rather than direct to consumer, in order to build out capabilities. Subsequently, Northwell issued an RFI to vendors to purchase technology to support their initiative. Return is not measured on revenue but rather on cost containment, outcomes, and driving referrals from community hospitals for specialty work.  Also, cost savings are measured based on the ability to leverage technology in order to reduce physician time per episode. The new CMS proposed rule on asynchronous codes, e-visits, and remote monitoring will help accelerate ROI and adoption.

Shawn discussed how in a prior role for Avizia, he helped a Boston-based academic medical center roll out a telemedicine platform in its community network. ROI was measured off: a) reducing length of stay, complications, readmissions and associated costs not necessarily revenue generation;  and b) admission to flagship system for specialty care.

Evan Cohen indicated Genoa ‘s focus is different . They are looking to provide access and reimbursement to providers for care and to some extent cost reduction  due to early intervention/avoidance of crisis care. In certain cases, such as diabetic retinal screening, the per click annual fee  in itself is worth the investment given the diagnostic value of early treatment.

For other destination type hospitals like a New York-based Cancer Hospital,  the goal of telemedicine may be dual: a) attracting out of geography patients to NY; b) ability to care for sicker patient remotely to affect outcomes.

Above all, the transfer of our reimbursement system from Fee-for-Service to Value-based Care, will drive adoption of telemedicine technology  as the ability to control outcomes and costs will be accelerated.

For more information on telemedicine, telehealth, virtual care, and other health innovations, including the team, publications, and other materials, visit Foley’s Telemedicine and Digital Health Industry Team and read our 2017 Telemedicine and Digital Health Executive Survey.



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Public Policy August Recess Health Care Newsletter  

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Public Affairs

Foley’s  Bipartisan Public Policy Team is pleased to share our Public Policy August Recess Health Care Newsletter  in which we compiled the top health care policy news and legislation from this month. The House was not in session and the Senate came back mid-month to focus on passing appropriation bills and presidential nominations.

This Week in Health Care Policy (August Recess 2018)

Congress

Legislation and Committee Activity  

Politico: Senate passes giant spending package in hopes of averting shutdown – The Senate on Thursday overwhelmingly passed an $857 billion spending package that Republican leaders are counting on to convince President Donald Trump to back down from threats of a government shutdown in September. Read More

Trump’s Plan on Drug-Pricing Transparency Takes Step Forward White House staff are reviewing a proposal that may require pharmaceutical companies to be more transparent about their pricing, a key piece of President Donald Trump’s plan to lower drug costs. The Office of Management and Budget has received a proposed regulation by the Department of Health and Human Services that deals with drug-pricing transparency in the U.S. Medicare and Medicaid systems. Read More

WRGB Albany: Gillibrand:  U.S. Senate Set to Vote on Opioid Legislation – Sen. Kirsten Gillibrand (D-NY) says the U.S. Senate is poised to vote on critical opioid legislation. Gillibrand says the senate will likely vote on a bill that included $3.7 million in federal funding for treatment and prevention efforts in combatting the opioid epidemic. Read More

Walden and Hatch Call on OMB to Consider Economic Consequences of Proposed Drug Rebate Rule – On Aug 9, House Energy and Commerce Committee Chairman Greg Walden (R-OR) and Senate Finance Committee Chairman Orrin Hatch (R-UT) urged the Office of Management and Budget (OMB) Director Mick Mulvaney to consider the full economic effects of a proposed Health and Human Services (HHS)/Office of Inspector General rule that would alter the use of rebates that are common in negotiations between drug manufacturers and pharmacy benefit managers. Read More

Washington Post:  Trump Urges GOP-led Senate to Pass Bill Cracking Down on Fentanyl Shipments – On Monday, President Trump urged the Republican-led Senate to pass legislation intended to crack down on shipments of illicit fentanyl through the international postal system, writing on Twitter: “No more delay! Leaders from both chambers announced a bipartisan agreement in June on the Synthetics Trafficking and Overdose Prevention Act(S.372) , which the House passed shortly thereafter. The Senate has yet to act on the bill, as Majority Leader Mitch McConnell (R-KY) has focused on confirming federal judges and passing appropriations bills. Read More

Cortez Masto, Kennedy Introduce Legislation to Protect Seniors from Opioid Abuse On Aug 15, Senators Catherine Cortez Masto (D-NV) and John Kennedy (R-LA) introduced the Stop Excessive Narcotics in our Retirement (SENIOR) Communities Protection Act (S.3327), legislation that would protect seniors from criminals who misuse the Medicare system to illicitly acquire opioids. Read More

Walden Holds Roundtable on Opioid Crisis with FDA Commissioner Gottlieb On Aug 7, Energy and Commerce Committee Chairman Greg Walden (R-OR) held a roundtable in his district to discuss the opioid crisis and current efforts to combat it. Joining the chairman was Food and Drug Administration (FDA) Commissioner, Dr. Scott Gottlieb. Read More

Roll Call:  Red-State Democrats Zero In on Opioid Epidemic – Vulnerable red-state Democrats are highlighting their work to address the opioid crisis in an effort to hold on to their congressional seats, even as it remains unclear whether the Senate will take key action before the midterm elections. Read More

Walden and Hatch Call on OMB to Consider Economic Consequences of Proposed Drug Rebate Rule – On Aug 9, House Energy and Commerce Committee Chairman Greg Walden (R-OR) and Senate Finance Committee Chairman Orrin Hatch (R-UT) urged Office of Management and Budget (OMB), Director Mick Mulvaney, to consider the full economic effects of a proposed Health and Human Services (HHS)/Office of Inspector General rule that would alter the use of rebates that are common in negotiations between drug manufacturers and pharmacy benefit managers. Read More

Cassidy, Colleagues Introduce Bipartisan Synthetic Drug Awareness Act U.S. Senators Bill Cassidy, M.D. (R-LA), Maggie Hassan (D-NH), Doug Jones (D-AL), and Todd Young (R-IN) introduced the Synthetic Drug Awareness Act (S. 3356), bipartisan legislation to help address addiction and the drug abuse epidemic. The bipartisan bill would require the U.S. surgeon general to report to Congress on the health effects of new psychoactive substances, including synthetic drugs, on young adults ranging from 12-18 years of age. Read More

Grassley Requests Robust Antitrust Review of Pharmaceutical Supply Chain Mergers On Aug 14, Senate Judiciary Committee Chairman Chuck Grassley (R-IA)  wrote to Assistant Attorney General for Antitrust Makan Delrahim requesting that the Department of Justice conduct a vigorous review of the proposed mergers of Cigna Corp. with Express Scripts Holding Co., and CVS Health Corp. with Aetna Inc., each of which play significant roles in the price of prescription drugs for U.S. consumers. Read More

E&C Leaders Press 340B Contract Pharmacies for Information – On Aug 1, Energy and Commerce Committee leaders sent letters to nine contract pharmacies that participate in the 340B Drug Pricing Program (340B Program), requesting information about their participation in the program. Read More

Brady, Roskam Release Medicare Report On Aug 15, House Ways and Means Committee Chairman Kevin Brady (R-TX) and House Ways and Means Subcommittee on Health Chairman Peter Roskam (R-IL), released a report discussing how lawmakers and the Administration can cut excessive red tape and regulatory burdens in the Medicare program. Read More

Examining CMS’s Efforts to Fight Medicaid Fraud and Overpayments – The Senate Committee on Homeland Security and Governmental Affairs held a hearing on efforts by the Centers for Medicare and Medicaid (CMS) to cut Medicaid fraud. Read More

Burgess Introduces Bill on Medicaid Rebates On July 31, Rep. Michael Burgess introduced a bill to amend title XIX of the Social Security Act to sunset the limit on the maximum rebate amount for single source drugs and innovator multiple source drugs. Read More

House, Senate Lawmakers Introduce Bill to Modernize Medicare Program That Helps Seniors Live at Home – On Thursday, U.S. Reps. Jackie Walorski (R-IN) and Earl Blumenauer (D-OR) and U.S. Sens. Tom Carper (D-DE), Pat Toomey (R-PA), Bob Menendez (D-NJ), and Bill Cassidy (R-LA)  introduced bipartisan, bicameral legislation to speed up the modernization of Programs of All-Inclusive Care for the Elderly (PACE), which allow seniors with complex care needs to continue living at home. Read More

The Hill:  McCaskill Presses Trump Official on Lawsuit Against Pre-existing Condition Protections On Tuesday, Senator Claire McCaskill (D-MO) pressed a top Trump administration official about a lawsuit challenging ObamaCare’s pre-existing condition protections. McCaskill, who is facing a tough reelection race this year, used a Senate Homeland Security and Governmental Affairs Committee hearing to press the head of the Centers for Medicare and Medicaid Services (CMS) about the lawsuit. Read More

Senate Dems’ Hearing w/Americans at Risk of Losing Health Coverage Due to Pre-Existing Conditions – On Aug 16, Senate Democrats held a hearing “America Speaks Out:  Protecting Care for Americans with Pre-Existing Conditions.” The Senators heard testimony on the Administration’s short term health insurance plans. Read More

Prioritizing Cures: Science and Stewardship at the National Institutes of Health The Senate HELP Committee heard testimony from National Institute of Health’s Director Francis Collins about prioritizing cures at NIH. Read More

Senators Introduce Bill to Help Americans Hurt by Medical Debt On Aug 16, Senators Jeff Merkley (D-OR), Richard Blumenthal (D-CT), Dianne Feinstein (D-CA), Elizabeth Warren (D-MA), Dick Durbin (D-IL), Bob Menendez (D-NJ) and Maggie Hassan (D-NH) introduced the Medical Debt Relief Act (S. 3351). This legislation would prevent medical debt from continuing to damage consumers’ credit scores after it has been paid off or settled, ensuring that otherwise-creditworthy consumers are able to find affordable credit to buy a home or a car or take out a loan. Read More

Shaheen, Collins Introduce Legislation to Expand Access to Diabetes Self-Management Training U.S. Senators Jeanne Shaheen (D-NH) and Susan Collins (R-ME) introduced the Expanding Access to Diabetes Self-Management Training Act of 2018 (S. 3366). This bipartisan legislation would expand Medicare coverage for diabetes self-management training (DSMT) sessions, where diabetes educators help train Medicare patients on how to manage their glucose, maintain a healthy weight, eat healthy foods, manage their insulin levels, and improve general care for their diabetes. Read More

Senators Ernst and Baldwin Introduce Bipartisan Reform to Ensure Coverage for Children Born with Congenital Anomalies or Birth Defects – On Thursday, U.S. Senators Joni Ernst (R-IA) and Tammy Baldwin (D-WI) introduced bipartisan legislation to ensure health insurance coverage for needed treatments and procedures for individuals with a congenital defect, birth abnormality, or disorder. Read More

Administration

Politico: Trump Readies New Round of Controversial Medicaid Changes The Trump administration is preparing to let conservative-led states impose additional restrictions on the nation’s health program for the poor that could push tens of thousands of people off coverage. Read More

HHS

100 Days of Action on the President’s American Patients First Blueprint – On Aug 21, HHS marked 100 days since the release of President Trump’s American Patients First Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs. In this short period of time, an unprecedented number of actions have been taken toward structurally rebuilding this entire segment of the economy to lead to enduring lower prices that are sustainable, support innovation, and put American patients first. Read More

HHS Secretary Azar Meets with Specialty and Patient Groups Regarding Drug Pricing On Aug 16, Secretary Alex Azar met with representatives of specialty-physician and patient groups to discuss the Trump Administration’s efforts to offer new tools for Medicare Advantage plans to negotiate lower drug prices for patients. Read More

HHS Awards $125 million to Support Community Health Center Quality Improvement On Aug 15, the U.S. Department of Health and Human Services (HHS) announced $125 million in Quality Improvement grant awards to 1,352 community health centers across all U.S. states, territories and the District of Columbia. Funded by the Health Resources and Services Administration (HRSA), health centers will use these funds to continue to improve quality, efficiency, and the effectiveness of health care delivery in the communities they serve. Read More

HHS Announces Grantees for Title X Family Planning Program Services On Aug 2, HHS Office of Population Affairs announced the 96 grantees to whom HHS intends to award Title X family planning service grants for fiscal year 2018. Twelve of the intended awards go to grantees who are new to Title X.  Read More

CMS

CMS announces new model to address impact of the opioid crisis for children – On Thursday, the Centers for Medicare & Medicaid Services (CMS) announced a new Innovation Center payment and service delivery model as part of a multi-pronged strategy to combat the nation’s opioid crisis. Read More

CMS Empowers Patients with More Choices and Takes Action to Lower Drug Prices – On Aug 7, CMS delivered on President Trump’s promise to negotiate better deals for Medicare patients and create competition between drugs used to treat the same conditions, with more than half of the savings required to be passed on directly to patients. Read More

CMS Releases Formal Approach to Ensure Medicaid Demonstrations Remain Budget Neutral On Aug 22, CMS released a letter to State Medicaid Directors that clearly describes CMS’s current approach to calculating budget neutrality expenditure limits for Medicaid section 1115 demonstration projects. Medicaid demonstration projects allow states to design innovative ways to better serve the nation’s more than 65 million Medicaid recipients.

CMS Streamlines Medicaid Review Process, Achieves Significant Reduction in Approval Times On Aug 16, CMS announced significant improvements in managing the Medicaid program in partnership with states. Identified early as a priority for both the Trump Administration and the National Association of Medicaid Director’s (NAMD), CMS has implemented changes resulting in faster processing of state requests to make program or benefit changes to their Medicaid program through the state plan amendment (SPA) and section 1915 waiver review process.  Read More

CMS Awards $8.6 Million in Funding to States to Help Stabilize Markets – On Aug 20, CMS awarded $8.6 million in funding to 30 states and the District of Columbia to provide State insurance regulators with the opportunity to enhance States’ ability to strengthen their respective health insurance markets through innovative measures that support market reforms and consumer protections under the Patient Protection and Affordable Care Act (PPACA) . Read More

CMS Issues Proposed Additional Rule to Address Risk Adjustment Program for the 2018 Benefit Year On Aug 8, CMS issued a notice of proposed rulemaking, “Patient Protection and Affordable Care Act; Methodology for the HHS-operated Permanent Risk Adjustment Program for 2018 Proposed Rule,” proposes to adopt the risk adjustment methodology that HHS previously established for the 2018 benefit year which uses the statewide average premium in the payment transfer formula. Read More

Proposed Pathways to Success for the Medicare Shared Savings Program On Aug 9, CMS issued a proposed rule that would set a new direction for the Medicare Shared Savings Program. Read More

Medicare Advantage Prior Authorization and Step Therapy for Part B Drugs On Aug 7, CMS introduced much-needed competition and negotiation into the market for physician-administered and other Part B medications that will result in better deals and lower drug costs for patients. Read More

FDA

FDA Approves First Generic Version of Epipen – On Aug 16, The U.S. Food and Drug Administration approved the first generic version of EpiPen and EpiPen Jr (epinephrine) auto-injector for the emergency treatment of allergic reactions, including those that are life-threatening (anaphylaxis), in adults and pediatric patients who weigh more than 33 pounds. Read More

FDA Allows Marketing of First Direct-To-Consumer App for Contraceptive Use to Prevent Pregnancy On Aug 10, the U.S. Food and Drug Administration permitted marketing of the first mobile medical application (app) that can be used as a method of contraception to prevent pregnancy. Read More

Statement by FDA Commissioner Scott Gottlieb, M.D., on New Steps to Advance the Development of Evidence-Based, Indication-Specific Guidelines to Help Guide Appropriate Prescribing of Opioid Analgesics As we all work to confront the staggering human and economic toll created by the opioid crisis, we recognize the critical role that health care providers play in addressing this public health priority – both in reducing the rate of new addiction by decreasing unnecessary and/or inappropriate exposure to opioids and ensuring rational prescribing practices, while still providing appropriate treatment to patients who have medical need for these medicines. Read More

FDA Takes New Steps to Encourage the Development of Novel Medicines for the Treatment of Opioid Use Disorder – On August 6, The U.S. Food and Drug Administration  issued new scientific recommendations aimed at encouraging more widespread innovation and development of novel medication-assisted treatment (MAT) drugs for the treatment of opioid use disorder (OUD). New draft guidance that has been issued  outlines new ways for drug developers to consider measuring and demonstrating the effectiveness and benefits of new or existing MAT products. Read More

FDA Approves New Treatment for a Rare Genetic Disorder, Fabry Disease On Aug 10, The U.S. Food and Drug Administration  approved Galafold (migalastat), the first oral medication for the treatment of adults with Fabry disease. The drug is indicated for adults with Fabry disease who have a genetic mutation determined to be responsive (“amenable”) to treatment with Galafold based on laboratory data. Read More

FDA Approves First-Of-Its Kind Targeted RNA-Based Therapy to Treat a Rare Disease On Aug 10, The U.S. Food and Drug Administration approved Onpattro (patisiran) infusion for the treatment of peripheral nerve disease (polyneuropathy) caused by hereditary transthyretin-mediated amyloidosis (hATTR) in adult patients. This is the first FDA-approved treatment for patients with polyneuropathy caused by hATTR, a rare, debilitating and often fatal genetic disease characterized by the buildup of abnormal amyloid protein in peripheral nerves, the heart and other organs. Read More

FDA Approves First Generic Drug Under New Pathway Aimed at Enhancing Market Competition for Sole Source Drugs On Aug 8, The U.S. Food and Drug Administration approved several strengths of potassium chloride oral solution as the first generic drugs to receive a Competitive Generic Therapy (CGT) designation. Read More

Veteran Affairs

Forbes: VA, Walgreens Partner To Coordinate Veterans’ Prescriptions The U.S. Department of Veterans Affairs is expanding its partnership with Walgreens Boots Alliance to better coordinate medication and immunization histories of the nation’s veterans. Read More

States

Washington Examiner:  Trump Administration Gives $8.6 Million to States to Help With Obamacare – The Trump administration is making $8.6 million in leftover funds available to states to help develop their Obamacare markets. The Centers for Medicare and Medicaid Services awarded the grants to 30 states and the District of Columbia so they can meet the requirements set under Obamacare to make sure that plans cover a range of services. The funds are used for hiring, reviewing policies, developing studies, or expanding the number of health plans residents have available to them. Read More

NPR:  Ohio Gov. Kasich Stumps Again In Support Of Medicaid Expansion Four years after going out on a limb to get Medicaid expansion enacted in Ohio, outgoing Republican Gov. John Kasich is worried about the future of the program. So he is now defending it — through a study and through the stories of people who have benefited from the coverage expansion. Read More

ABC News: Kentucky Governor Loses Another Round in Medicaid Fight Kentucky’s Republican governor lost another round Monday in a legal fight over his efforts to revamp the state’s Medicaid program to require poor people to get a job to keep their benefits. The latest setback for Gov. Matt Bevin came in his home state when a federal judge dismissed his lawsuit that sought a ruling validating the Medicaid changes. Read More

Arizona, Florida, and Oklahoma voters head to the polls next week for primary elections and a runoff. Read More

Foley Health Care Law Today

Our attorneys at Foley pride themselves on having a first-hand understanding of health care’s business and legal challenges. Health Care Law Today is your go-to resource for information and perspectives on the latest news and developments in health care law and how it relates to and impacts the industry and those with related business interests. For some of the blog’s top stories see below:

Proposed Overhaul to the Medicare Shared Savings Program Would Mean More Risk for ACOs On Aug 9, CMS introduced a proposed rule that would substantially overhaul the Medicare Shared Savings Program (MSSP), requiring Accountable Care Organizations (ACOs) that participate in the MSSP to accept some downside risk and tightening other requirements to increase program integrity. Read More

CMS Continues to Tighten the Belt on Hospital Off-Campus Provider-Based Departments Hospitals with off-campus provider-based departments (PBDs) may want to rethink their end of summer vacation plans in order to focus on a recent slate of proposed regulations from the Center for Medicare and Medicaid Services (CMS) that seek to rein in Medicare reimbursement for outpatient hospital services – including at excepted/grandfathered off-campus locations. Read More

When Is Compensation Unreasonable? Just what is reasonable compensation in the Medicare world is not a clearly defined, black and white concept. Instead, it is somewhat in the eye of the beholder, with the parties to each situation where that is an issue seeking to reach out for third party support for their conclusions. But sometimes when the government gets a chance to look at the conclusions, it is a “bridge too far.” Read More

Health Care Information Exchanges and Price Transparency Initiatives: CMS Requests Input from Providers On July 12, 2018, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule introducing changes to the Medicare physician fee schedule, and soliciting comments from providers on CMS data sharing initiatives.  Read More

The Association Health Plan Challenge: The States Initiate Litigation Challenging the Final Rule In our blog post of July 10, 2018, we discussed the key elements of the Final Rule issued on June 21, 2018 with respect to Association Health Plans (AHPs). As we noted, the expansion of ERISA’s definition of an employer and the other elements of the Final Rule designed to expand insurance opportunities for small employers, including sole proprietorships had been opposed by a variety of interests, including the Attorneys General of a number of States, some of whom promised litigation to stop the implementation of the Final Rule prior to the potential effective date of September 1, 2018 for fully insured AHPs. Read More

Looking Ahead

The Senate is in session next week and the House is in recess and will return on Sept 4th.

On Wednesday, the Senate HELP Committee will hold a hearing on “FDA Oversight: Leveraging Cutting-Edge Science and Protecting Public Health.” Read More

Foley & Lardner LLP’s (“Foley”) Bipartisan Public Policy Team has a proven track record of helping clients achieve their policy priorities at the federal, state and local levels, with extensive experience advocating on behalf of clients involved in various aspects of government engagement. Our team employs a comprehensive approach to government relations. Our work combines high-level policy development, tactical engagement with policymakers, grassroots, business and public relations strategy and targeted lobbying, along with legal representation of an international law firm, when requested by our clients. Our team maintains strong relationships with key Members of Congress, including those in House and Senate Republican and Democratic leadership, and on key committees. The Foley team is your go-to resource in Washington, D.C., for notable health care developments.



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