Last week, the Medicare Payment Advisory Commission (the “Commission”) debated a package of policy reforms that would change the way Medicare reimburses physicians for Medicare Part B drugs. In the midst of calls to lower drug prices, the Commission has been developing its Part B reform package over the last two years and now, finally, appears poised to move forward with a vote at next month’s meeting.

Medicare Part B drugs are a multi-billion dollar benefit and typically include higher cost specialty drugs that are administered in a physician’s office on an outpatient basis. Drugs covered under Medicare Part B are reimbursed through a so-called “buy and bill” approach. That is, the physician buys the drugs and bills Medicare for their use. Medicare pays the provider the average sales price (“ASP”) of the drug plus a markup of 6% of the ASP.  The 6% markup is generally considered compensation to physicians for the storage, handling, and other administrative costs associated with these specialty drugs. Continue Reading Medicare Advisors Debate Part B Drug Payment Reforms

On Wednesday, March 8, James B. Comey, Director of the FBI, was at Boston College to deliver the keynote address for the inaugural Boston Conference on Cyber Security (BCCS 2017).  Director Comey addressed various industry, cyber security, FBI, law enforcement and military experts in attendance regarding current cyber threats to both industry and government assets and the FBI’s approach to confronting them.   During his remarks, Director Comey was asked to opine on the biggest cyber threat to healthcare providers, to which Comey quickly responded, “ransomware.” Continue Reading Advice to Healthcare Providers on Ransomware from the Head of the FBI

The Massachusetts Department of Public Health (DPH) has promulgated final Hospital Licensure Regulations.  Approved by unanimous vote of the Massachusetts Public Health Council (PHC) on March 8, 2017, DPH anticipates that the Hospital Licensure Regulations (105 CMR 130.000, et seq.) will be published in the Massachusetts Register in April, 2017.  The regulations will become effective as of the date of such publication.

As noted in our September 26, 2016 Blog Post, the amendments are part of DPH’s overall regulatory review process needed to comply with Governor Baker’s Executive Order 562, which directed all executive branch state agencies to review and, where possible, streamline, simplify and improve regulations.  At Wednesday’s PHC meeting, Commissioner Monica Bharel, M.D., MPH introduced the presentation of the final regulation by senior DPH staff, indicating that the regulation is part of DPH’s public health informed view of system transformation.  In its materials accompanying the presentation of the regulations, DPH noted that the regulation is intended to ensure a high quality of care, industry standardization, and strong consumer protection for persons receiving hospital care.

In response to comments received in response to the proposed revisions, DPH made a number of further revisions to clarify definitions and licensure requirements, streamline administrative and staffing requirements, and remove duplicative and unnecessary reporting requirements (aligning, when possible, reporting requirements of other state agencies).  A summary of comments received, and DPH’s responses to such comments, is contained in the Information Briefing provided to Dr. Bharel and the PHC. Continue Reading Massachusetts Department of Public Health – Final Hospital Licensure Regulations

Earlier this week, the Office of Inspector General for the Department of Health and Human Services (“OIG”) posted its fiscal year (“FY”) 2016 data about Medicaid Fraud Control Units (“MFCUs”) across the country.

Federal law requires each state to operate a MFCU separate and distinct from the state Medicaid Agency. MFCUs are charged with investigating and prosecuting fraud committed by Medicaid providers and in the state’s administration of the Medicaid Program, as well as patient abuse/neglect that occurs in a Medicaid-funded facility or at the hands of Medicaid providers.  MFCUs currently operate in 49 states and the District of Columbia (North Dakota presently has a waiver but proposals to create a MFCU have been introduced in the state legislature).  They are typically part of a state’s Attorney General’s office and are required to employ investigators, attorneys and auditors.  The OIG is responsible for overseeing MFCUs.  It annually recertifies MFCUs, assesses their performance and compliance with Federal requirements, and administers a Federal grant award that funds a portion of each MFCU’s operational costs. Continue Reading OIG Releases FY 2016 Statistical Data About Medicaid Fraud Control Units

As we’ve previously discussed on Health Law and Policy Matters, agencies within the Department of Health and Human Services (DHHS) pushed through several final rules towards the end of the Obama Administration (see here and here). However, since taking office, President Trump has followed through on his campaign promise to significantly roll back Federal regulations and has taken several actions aimed at slowing and reversing agency regulatory processes, including processes at the DHHS sub-agencies CMS and FDA. These executive actions are creating a climate of uncertainty for regulated industries and their stakeholders. Continue Reading Trump Executive Orders Create Uncertainty for Health Care & Pharmaceutical Industries

On March 6, House Republicans revealed The American Health Care Act. It is their plan to repeal and replace the Affordable Care Act. The bill changes the structure of Medicaid financing from the Federal Medical Assistance Percentages (FMAP) system, in which states and the federal government each pay a percentage of Medicaid funding, to a per capita system.

Under current law, states get paid by the federal government for their Medicaid programs based on the amount of services they provide.  As we stated in a previous post, that has created an incentive for states to use supplemental payment streams to maximize per service revenue.  Under a per capita cap, states will be paid based on population.  They get paid for every person on their Medicaid rolls regardless of the amount of services the individuals use.  Therefore, states will now have an incentive to maximize their rolls.

This creates what we will call “The Walking Dead problem.” Continue Reading The Walking Dead in Medicaid

money_388130419Currently, state Medicaid programs have flexibility in developing payment policies, including utilizing supplemental payments and non-federal supplemental payment mechanisms. Supplemental payments pay providers above what they receive for an individual service through Medicaid provider rates.  Supplemental payments include disproportionate share hospital (DSH) and upper payment limit (UPL) payments and are a critical funding source for many safety net providers. States can fund the non-federal share of these payments through intergovernmental transfers, provider taxes, and certified public expenditures.

However, there is limited transparency and data available on supplemental payments. As a result, states can use these funding structures to increase their total federal Medicaid match. The total percentage of federal funding for each state’s Medicaid program is often referred to as the effective Federal Medical Assistance Percentage (FMAP). However, due to data limitations on supplemental payments, we do not know what any state’s effective FMAP actually is.

The American Health Care Act is the House Republican bill to repeal and replace the Affordable Care Act. Its details became available March 6th. This bill changes the structure of Medicaid supplemental payments, with the exception of DSH payments. States’ reaction to the bill will tell us more about Medicaid supplemental payments than we’ve ever known, and whether the financing system in the proposed bill will provide equivalent federal funding. Continue Reading Medicaid Supplemental Payments under The American Health Care Act

Last week, the U.S. Department of Health and Human Services’ Office for Civil Rights (OCR) released new guidance on reporting and monitoring cyber threats.  The guidance urges covered entities and business associates to report suspicious activity, including cybersecurity incidents, to the United States Computer Emergency Readiness Team (US-CERT). US-CERT is an organization within the Department of Homeland Security’s National Cybersecurity and Communications Integration Center (NCCIC) that is responsible for analyzing and reducing cyber threats and vulnerabilities, disseminating cyber threat warning information, and coordinating incident response activities. It is operational 24 hours a day, and accepts, triages, and collaboratively responds to incidents. Continue Reading OCR Releases Guidance on Reporting and Monitoring Cyber Threats

Medicaid expansion in the Affordable Care Act (ACA) required coverage of individuals with incomes from 0% of the federal poverty level (FPL) through 133% of the FPL.  The requirement to cover this group was overturned in NFIB v. Sebelius.  As a result, it is now up to states to determine whether they will offer Medicaid coverage to these individuals.  This new category of eligible Medicaid beneficiaries is often referred to as childless adults.

A number of Republicans, both governors and those in Congress, have taken to using the term “able-bodied” to refer to this group.  If you are able-boded, the theory goes, the Medicaid program should reasonably expect you to work. As a result, some Medicaid expansion and Medicaid reform proposals have included work requirements as an eligibility criteria for Medicaid. We can expect this topic to continue to be raised as we get deeper into ACA reform. Continue Reading Who Are the Medicaid Able-Bodied?

6350-Pharma-Summit-blog-buttonThe pharmacy industry continues to be under scrutiny from all angles.  As legislative, agency, and enforcement priorities take shape under the new administration, the industry is faced with what seems like daily developments in terms of policy updates, legislation, and potential regulation.  Our 2017 Pharmacy Industry Summit will bring together stakeholders and thought leaders from across the industry to discuss legal and policy challenges facing manufacturers, PBMs, payors, pharmacies, and providers and to assess the various swirling initiatives and their potential impact on the industry.

The Summit will be held on April 5-6 at the Mintz Levin Washington, DC office.  Event details can be found here.

Session topics will include:

  • A Keynote Address from Mark Merritt, President and CEO of The Pharmaceutical Care Management Association (PCMA)
  • An update on the current state of Affordable Care Act Reform
  • Drug Pricing Debate and the Evolving Role of Pharmacy Industry Players
  • State Issues Affecting the Pharmaceutical Industry
  • Congressional Staffer Panel
  • Value-Based and Innovative Contracting and Reimbursement
  • FDA’s Impact on the Supply Chain – Evolving Policies and Changing Priorities
  • Government Enforcement and the Pharmaceutical Industry

We hope you can join us! Please register by March 29, 2017.