On Wednesday, the U.S. Senate overwhelmingly passed the 21st Century Cures Act (the “Act”) by a vote of 94 to 5.  Spearheaded by Michigan Representative Frank Upton, the bill now heads to President Obama who has promised to sign it. The Act is ambitious, and will impact a wide swath of the U.S. health care system. The Act provides, among other things:

  • $4.8 billion over 10 years to support NIH research on precision medicine, neuroscience, cancer and regenerative medicine.
  • $1 billion in state grants to increase opioid abuse prevention and treatment services, including prescription drug monitoring programs, training programs and treatment programs.
  • Substantial changes to FDA regulations to accelerate the pace of bringing pharmaceuticals and medical devices to market.
  • New obligations on the part of both FDA and industry stakeholders to implement the research initiatives and regulatory changes mentioned above.
  • Other health care initiatives addressing health information technology, vaccines, national security and health care delivery.

At 996 pages, the Act cannot be summarized in one post. Instead, we plan to analyze the various aspects of the Act in multiple posts over the coming weeks. The remainder of this post will highlight provisions that support one of the Act’s primary objectives: the acceleration of drugs and devices to market. Continue Reading Senate Passes 21st Century Cures Act, but Can It Cure an Ailing FDA?

image3_417910087A Trump victory was not the only surprise on election night. California’s drug pricing initiative, which would have required state agencies to negotiate drug prices at least as low as those paid by the U.S. Department of Veterans Affairs, was defeated by a wide margin (46% to 54%). This clear-cut defeat came as a surprise to many considering that polls taken just a couple of months earlier showed widespread support for the initiative. The California ballot initiative was introduced last year in the midst of widespread criticism of soaring drug prices. The initiative had early support but floundered leading up to the election when major pharmaceutical companies expended considerable resources into the campaign to defeat it. Continue Reading In the Wake of the Election, What’s Next for State Drug Pricing Initiatives?

Before we all turn our full attention to the nominations of Representative Tom Price as Secretary of Health and Human Services, and policy consultant Seema Verma to lead CMS, we need to remember that there are still approximately 45 days remaining in the current administration. A perusal of the Federal Register reveals that in the wake of the election, federal agencies are issuing proposed and final rules at a swift pace.

So it may be wise to consider what HHS rules have been published, and what rules could still be acted on by the Office of Management and Budget (OMB) and published before the inauguration of the new administration.  And we also need to consider what action Congress may take on those rules. Continue Reading Forty-Five Days and Counting for Current HHS Leadership: Implications for Rulemaking

As we reported earlier this week, the U.S. Department of Health and Human Services (HHS) Office for Civil Rights described a phishing campaign that is attempting to convince recipients of their inclusion in OCR’s Phase 2 audit program. The email, which was disguised as an official communication, suggests that recipients click on a link. This link takes recipients to a non-governmental website marketing cybersecurity services.

On Wednesday, OCR followed up their alert with additional details about the phishing campaign. According to OCR, the phishing email originates from the email address OSOCRAudit@hhs-gov.us and directs individuals to a URL at http://www.hhs-gov.us. OCR points out the subtle difference from the official email address for its HIPAA audit program, OSOCRAudit@hhs.gov, noting that such subtlety is typical in phishing scams.

OCR also took the opportunity to confirm that it has notified select business associates of their inclusion in the Phase 2 HIPAA audits.  For more information about the Phase 2 audit program please visit our earlier post.

There has been much controversy over the Medicare Part B payment demonstration proposed by the Center for Medicare and Medicaid Innovation (CMMI) in March 2016.  As we await the release of the final rule, the fate of this demonstration will be in the hands of a Republican-held Congress and President-Elect Trump.  To move forward, not only will CMMI need to finalize the implementing regulations, but the Part B payment demonstration will also need to survive review under the Congressional Review Act (CRA). Continue Reading The Future of the Medicare Part B Payment Demo under a Republican-held Congress

The U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR) published an alert on Monday describing a phishing campaign disguised as an email from OCR. The email is being circulated on mock HHS letterhead under the signature of OCR’s Director Jocelyn Samuels and is being sent to HIPAA covered entities and their business associates.  The email prompts recipients to click a link regarding possible inclusion in the HIPAA Privacy, Security, and Breach Rules Audit Program. When clicked, the link takes the recipient to a non-governmental website marketing a firm’s cybersecurity services. In its alert, HHS clarified that it is in no way associated with the firm.

Covered Entities and Business Associates should be aware of this email and should make their workforces aware of it.  This can also serve as an important reminder of the importance of being vigilant about phishing campaigns and not clicking links in any email that seems suspicious or unexpected.

While the firm’s specific claims of inclusion in the audit program are not based in fact, OCR’s audit program is itself quite real. This past July we discussed the audit letters that were sent to health care providers and health care clearinghouses alerting them to their inclusion in the audit. We also described how OCR would be auditing businesses associates during the fall season. Given that fall is upon us, it is now more critical than ever for business associates to review their compliance efforts.

Republicans have been talking about remodeling the Medicaid program through block grants or per capita caps for years.  Both block grants and per capita caps are designed to limit federal spending by providing a state with a set amount of federal money to fund its Medicaid program.  With the sweeping Republican victory, Republicans are in a position to move forward with these policies, primarily focused on block grants.  But, there are three main questions to consider in designing a block grant program, each of which could prove controversial.

Which populations would be included in the block grant?

Any block grant proposal must determine which populations are included in the block grant.  While some proposals have included all Medicaid populations, others have specifically excluded the elderly and disabled, leaving them in the existing Medicaid program.

What services would be covered by Medicaid under the block grant?

Currently, states are required to provide a set of mandatory services in order to receive federal funds.  A block grant proposal must consider and address whether the current set of services would still need to be covered under the block grant funds, and if not, what services would be covered.  Any reduction in the coverage of mandatory services would likely be hotly debated.

What federal funds would be provided to the states?

A block grant proposal must also determine what federal funds will be provided to the states.  Funding includes two parts: (1) the initial amount provided, and (2) how much is providing moving forward. In any block grant proposal written with the express purpose of reducing federal spending on Medicaid, the funding choices will be extremely controversial and perhaps rejected by states, including those with Republican governors.

While the road to Medicaid block grants may be open for Republicans come January, there are still many questions as to how such a policy would be implemented and how it will fit with other health reform proposals.

The Children’s Health Insurance Program (“CHIP”), created in 1997, helps states provide health care coverage to low-income children up to age 19 whose families fall above the Medicaid eligibility threshold but are unable to afford private insurance. Over the past ten years, federal funding for CHIP has steadily increased.  Congress reauthorized CHIP in 2015 through MACRA, but the program, which represents one of the last remaining annual (or semi-annual) vehicles for Congress to advance health policy initiatives, will lapse September 30, 2017.  CHIP has traditionally received bipartisan support but the question of whether to continue funding the program has recently been at issue.

For the past several years, some experts believed CHIP would slowly wind down as the uninsured rate for children dropped in light of other coverage options under the Affordable Care Act (“ACA”). According to the U.S. Census Bureau, the period of 2013-2015 saw the largest decline in uninsured children ever going from 7.1 to 4.8 percent uninsured.  While the ACA provides additional coverage options for low-income families, CHIP remains popular because in some cases it offers better benefits at lower costs than plans on the exchanges.  This was the subject of debate during the last reauthorization, and in the lead up to MACRA’s passage, the Medicaid and CHIP Payment and Access Commission (“MACPAC”) advised Congress “to extend federal CHIP funding for a transition period of two additional years, during which time policies can be developed to address concerns about affordability and adequacy, with the ultimate goal being integration of children in Medicaid, employer-sponsored, or exchange coverage depending upon their family circumstances.”

Currently, low-income children who are not eligible for Medicaid have three options for healthcare coverage: through their parents’ employer-based plan, through an exchange plan under the ACA, and through CHIP. These three coverage options differ in the benefits offered and cost-sharing requirements for families.  As Republicans determine the fate of CHIP in 2017 and beyond, they will need to consider if coverage variations for low-income children should continue.  In other words, when approaching the ACA, Republicans need to keep in mind the positive aspects of CHIP that may not be included in the current marketplace or employer-based plans.

CHIP has been a bipartisan program throughout its existence, but decisions about whether to extend the program are inextricably tied to decisions regarding the ACA.

Most of the post-election discussion of the ACA has focused on how promises to repeal the law could impact the newly insured. But one priority area of the ACA that has received very little discussion is the federal government’s strategy to try to reign in health care costs by reducing volume and promoting quality.  Complicating the push to fully repeal the ACA is the fact that key elements of the ACA’s cost control strategy have found their way into the Medicare and CHIP Reauthorization Act (MACRA) passed by Congress in 2015.

MACRA was passed on a bipartisan, bicameral basis, creating a two-track system for Medicare provider reimbursement incentive payments. On one track is the more traditional fee-for-service reimbursement structure that will be subject to payment adjustments under a consolidated quality reporting system called the Merit-Based Incentive Payment System (MIPS). The second track, which entails greater incentive payments, addresses reimbursement for providers participating in alternative payment models (APMs) like accountable care organizations (ACOs) and other demonstration programs that have been created under CMS’s Center for Medicare & Medicaid Innovation (CMMI). We discussed these changes at length in our post last month.

While the sweeping Republican election victory portends extensive changes in many areas of health care, MACRA is not likely to see extensive changes–at least not directly.  Moving payment policy away from volume and towards quality was a goal for all the Congressional offices participating in the construction of MACRA. However, the implementation of MACRA could still face challenges if Congressional Republicans decide to repeal or constrain the ACA sections that give CMS the authority to operate the CMMI. Such a move would not be outside the realm of possibility; as we previously discussed, the CMMI has been a frequent target of criticism by Congressional Republicans. A full repeal of the ACA, or even limitations to the CMMI’s authority or budget, could cripple the government’s ability to operate the demonstration projects that are the cornerstones of MACRA.

Stakeholders need to engage with CMS moving forward, albeit a CMS under new management, to ensure that changes to the ACA do not have unintended consequences on MACRA’s implementation.  CMS may seek to streamline the numerous payment policies that have been proposed under the current Administration. Alternatively, it is possible that CMS will be active in creating its own versions of alternative payment models. One area of potential focus for further reform might be the so-called ACO Track 2 and 3 under the Medicare Shared Savings Program (MSSP), participation in which will now make providers eligible to receive APM incentive payments. Yet CMMI to date has struggled to find the right mix of payment reform, such as requiring two-sided risk, with payment incentives to show significant MSSP savings. In either case, the provider community will be closely watching the developments related to this already complex and daunting transition.

Massachusetts Long Term Care Facility Regulations – Proposed Amendments

The Massachusetts Department of Public Health (DPH) continues its efforts to revise its regulations to comply with Executive Order 562, which requires all state agencies to review its regulations. Long-Term Care Facilities (LTCFs) must currently comply with 3 separate regulations: 105 CMR 150.00 (Licensing of Long-Term Care Facilities); 105 CMR 151.000 (General Standards of Construction for LTCFs in Massachusetts); and 105 CMR 153.000 (Licensure Procedure and Suitability Requirements for LTCFs). (Note: these links will bring you to DPH’s redlined versions, where applicable.  The corresponding presentations by DPH staff to the Public Health Council (PHC) at the PHC’s November 9, 2016 meeting are available here.)  Continue Reading Massachusetts Long Term Care Facility Regulations – Proposed Amendments