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March 28, 2016

Washington Health Policy Week in Review Archive b5ba5add-a0e1-4556-9a47-f5b77a12afdd

Newsletter Article


Burwell Announces Expansion of Diabetes Prevention Program

By Andrew Siddons, CQ Roll Call

March 23, 2016 -- The Department of Health and Human Services (HHS) on Wednesday announced that it would expand coverage of a diabetes prevention program to all Medicare beneficiaries, potentially saving billions of dollars in health care spending.

The current $11.8 million pilot program administered by local YMCAs enrolls eligible beneficiaries in weekly meetings that teach participants about healthy diets, physical activity, and other lifestyle changes that can decrease the risk of developing diabetes in adulthood.

"Treating this disease isn't just a burden on families. It costs our nation $176 billion in direct medical costs every year," HHS Secretary Sylvia Mathews Burwell said at the YMCA Anthony Bowen in Northwest Washington.

According to HHS, participants in the program lost 5 percent of their body weight, and Medicare estimates that the savings is $2,650 per enrollee over a 15-month period. The Office of the Actuary in the Centers for Medicare and Medicaid Services (CMS) has officially certified that expansion of this program would reduce net Medicare spending. It is the first prevention program to earn this certification from CMS, setting the stage for expansion to all Medicare beneficiaries that would occur after a rulemaking process by CMS later this summer, Burwell said.

About 30 million Americans have type 2 adult-onset diabetes. Another 86 million with a condition known as prediabetes, where blood glucose levels are higher than normal but not yet at diabetic levels, are at risk of developing the disease, according to HHS.

The pilot program was started in 2011 with funding from the previous year's health care overhaul, and so far has had nearly 8,000 participants in 45 states. The YMCA estimates that attendees, who are mostly aged 45 to 64, average more than 2.5 hours of physical activity per week.

Burwell hopes the expansion of Medicare coverage to include more health and wellness programs aimed at preventing diabetes will encourage more employers and private insurers to do the same. She said she believed it would be an attractive proposition for many private companies.

"Many companies are already leading in this space," she said. "You see that both in terms of CEOs who are taking steps in their own companies to boost wellness and prevention efforts, [and] we also see it terms of some of the insurers that are taking steps."

The announcement coincided with the sixth anniversary of the health care overhaul being signed into law, which Burwell described as a historic achievement. She said that Wednesday's announcement built on the administration's efforts to focus health care on prevention.

"If we can invest in prevention of diabetes before it develops, we can improve people's health, their quality of life, and save money," she said.

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Lawmakers Urge Administration to Update Health IT Rules

By Andrew Siddons, CQ Roll Call

March 22, 2016 -- As doctors and patients increasingly rely on electronic health records, lawmakers on the House Oversight and Government Reform Committee see a need to update old laws or rules that could hinder the ability of new technologies and systems to communicate.

The complicated federal regulations hinder innovation, according to Rep. Will Hurd, R-Texas, chairman of the House Oversight and Government Reform Subcommittee on Information Technology.

"The sheer number of federal agencies, with often conflicting rules one must navigate to invest in the space, chills investment and entrepreneurship," Hurd said at a subcommittee hearing Tuesday. "The fragmented and bureaucratic system places the patient at the fringe of the process rather than at the center."

Karen DeSalvo, the national coordinator for health IT at the Department of Health and Human Services, said that as a doctor she has had similarly poor experiences navigating health IT systems.

"I have been frustrated by the lack of interoperability, by the usability of the systems and by how hard it can be to select the right system to operate," DeSalvo said.

DeSalvo told lawmakers that it would be helpful for Congress to encourage the states to harmonize their health data, and find ways to prevent information blocking, a practice when some health care providers, for commercial purposes, intentionally make it harder to share information with others.

Other witnesses at the hearing, which was jointly held with members of the Subcommittee on Health Care, Benefits, and Administrative Rules, told lawmakers that Congress should consider ways to make it easier for patients to access their health records, and clarify privacy and security requirements.

Jessica Rich, director of the Federal Trade Commission's Bureau of Consumer Protection, also urged lawmakers to pass federal data security and breach legislation to discourage bad conduct.

"That would allow us to seek civil penalties to deter unlawful conduct and give us jurisdiction over nonprofit entities," she said.

Other subcommittee members also warned that the need to update older rules shouldn't turn into an excuse to gut regulatory oversight altogether.

"Regulation done wrong or too little regulation makes it difficult to protect the public and make sure that data flows freely," said Rep. Ted Lieu, D-Calif. "Regulations done right spurs innovation, improves quality of care, and protects the public."

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Insurers Balk at Draft Medicare Changes for Risk Assessment

By Kerry Young, CQ Roll Call

March 22, 2016 -- The insurance industry soon will learn how it fared in its most recent skirmish with Medicare officials over payments. Each side sees billions at stake in a final decision about how extra money should be provided for covering elderly and disabled people who suffer from poor health.

Medicare will by April 4 issue the final version of policies for next year for the so-called Advantage plans, in which insurance companies are paid to manage the health benefits of people enrolled in the program. Medicare paid insurers about $170 billion last year for Advantage plans, one of the program's biggest expenses. About 17 million people are enrolled in Advantage plans.

The America's Health Insurance Plans (AHIP) trade group contends that the Centers for Medicare and Medicaid Services (CMS) has underestimated how much a change in risk adjustment payments, which provide additional funds for plans whose customers are sicker than average, will cost its members. In a proposal on Medicare Advantage payments, known as a call letter, CMS had estimated a reduction of 0.6 percent, or about $1 billion, to risk adjustment payments in 2017, AHIP said in a March 4 letter to CMS. AHIP contended the planned changes could actually be a reduction of 2.1 percent.

The cut could harm the people who enrolled in Advantage plans instead of sticking with traditional fee-for-service Medicare, AHIP officials wrote in the letter.

The group urged CMS to issue a Medicare Advantage final notice that "maintains a strong and stable program and ensures plans can continue to provide innovative, high quality care for current and future beneficiaries."

Whatever decision CMS makes in the 2017 call letter is unlikely to be its last word on risk-coding for the Medicare Advantage program. The insurer-run plans have been credited with more aggressively seeking to document health problems in their members, which can be a boon in terms of getting earlier treatment for chronic diseases. There's clearly a concern, though, that the insurer-run plans also are looking to raise their revenue from the Advantage plans, which have been the target of budget cuts in several recent laws.

"The higher level of reported diagnoses can arise for a variety of reasons including plans seeking to better understand the health status of their enrollees so they can provide better care to plans reporting more diagnoses for enrollees to generate higher revenue," CMS said in the draft released in February.

Enrollment in Medicare Advantage has been surprisingly robust even as Congress took steps in recent laws including the 2010 health law to make it less profitable for insurers. Medicare's board of federal trustees said in their 2015 report that growth in the Advantage plans had defied their earlier estimates, which predicted slowing due to the reduced incentives for insurers. 

Instead, payments to Advantage plans proved to be more than the trustees had anticipated due in part to the way that the plans documented illnesses in their customers, which drew additional Medicare dollars.

In the February draft, CMS signaled that continued enrollment growth in the Advantage plans will keep the risk-based payments a front-burner issue. Coding-related payment increases "threaten the solvency" of Medicare's hospital trust fund and can trigger higher premiums for all people covered by the federal health program, CMS said. 

"For this reason, CMS will continue to monitor coding intensity closely and will utilize its authority to increase the coding intensity offset as appropriate," CMS wrote.

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House Passes Bill That Would Reshape FTC Reviews of Mergers

By Jad Chamseddine, CQ Roll Call

March 23, 2016 -- House Republicans overcame opposition from Democrats and the White House to pass a bill that would align the Federal Trade Commission's (FTC) merger review process with procedures used by the Department of Justice.

The House voted, 235-171, largely along party lines Wednesday to pass the measure (HR 2745). The sponsor, Blake Farenthold, R-Texas, praised its potential effects on merger reviews, calling the proposal "good governance." The bill will go to the Senate, where a companion measure was introduced last year.

The FTC and the Justice Department review most mergers to determine whether there are anti-competitive effects. The agencies divide the deals for examination based on each agency's relative expertise. They also follow different procedures. 

Republicans argue that the FTC's standard process of seeking a preliminary injunction in federal court when the agency seeks to block mergers has a lower burden of proof than the Department of Justice's standard.

"There was no justification for these disparities," House Judiciary Chairman Robert W. Goodlatte, R-Va., said on the floor Wednesday.

The agencies don't have a clear procedure to decide which one will review a merger. They typically rely on precedent and subject expertise to assign the review.

Goodlatte likened the process to a "flip of a coin" and said it wasn't fair for one company to face a harder road based on the luck of the draw. He added that the bill would "enhance the transparency" and return "credibility" to the antitrust merger review process.

In addition to harmonizing the review standard, the bill would dismantle the FTC's Part III administrative review process, preventing the agency from falling back on administrative courts to block a merger. Republicans argue that administrative courts take too long, and accused the FTC of turning to its own courts when a federal court denies a preliminary injunction blocking a merger. The Justice Department lacks the option of its own administrative courts.

"Just a threat of going through this administrative process gives the FTC the ability to extract concessions that the Justice Department wouldn't have," Farenthold said Wednesday.

But Democrats said the bill would "gut" the FTC's special powers and weaken antitrust policy during a time of increased consolidation. Hank Johnson, D-Ga., ranking member of the subcommittee on regulatory reform, commercial and antitrust law, said the bill will apply to less than 1 percent of mergers, and is only going to strengthen "big business" and hurt consumers. "The corporations and the wealthy have been doing pretty well over the last couple of generations," Johnson said.

New Jersey Democrat Bill Pascrell Jr. went further, calling the bill "terrible" and said it is "attacking a problem that doesn't exist."

The White House also opposes the legislation, saying the bill would "eliminate the Federal Trade Commission's ability to use critical administrative and procedural tools to promote competition and protect consumers" and calling the changes "unnecessary."

Goodlatte said the bill is meant to help smaller companies because they don't have the resources to fight the government in court, unlike large corporations that can hire lawyers and economists to make their case. 

Republicans also rejected a late motion from Rep. Lloyd Doggett, D-Texas, to recommit the bill to the House Judiciary in order to add an amendment to protect consumers from pharmaceutical price hikes. 

Similar legislation was introduced in the Senate (S 2102) by Sen. Mike Lee, R-Utah, the chairman of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, late last year. Lee said at a hearing this month that he "hopes to move forward" with the legislation in the "near future."

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Birth Control Mandate in Obamacare Splits Supreme Court

By Todd Ruger, CQ Roll Call

March 23, 2016 -- The Supreme Court appeared equally divided Wednesday on the latest challenge to the health care overhaul. Justices are split between the Obama administration's aim to provide contraceptive coverage to all women on one side and the objections of religious nonprofit groups on the other.

The case over the law's contraception mandate is closely watched by advocacy groups on both sides. Democratic lawmakers appeared at a women's rights rally outside the Supreme Court building before the oral arguments, while religious groups including many nuns protested next to them for religious rights.

Neither side would be completely satisfied by the apparent 4–4 split between the liberal and conservative wings of the shorthanded court, however, since the tie would leave the issue unresolved nationally. Such a decision would affirm the Obama administration's win on the issue in eight federal appeals courts, but also leave in place a conflicting decision from one federal appeals court.

The mandate in the Affordable Care Act requires most employers to offer birth control to their employees as part of health insurance coverage. Religious nonprofits can be exempted if they notify the government in writing—called an accommodation—and the government then arranges the coverage through the group's existing insurance plan at no cost to the group.

An attorney for the Little Sisters of the Poor, an organization of Roman Catholic nuns, and dozens of nonprofits argued that the accommodation makes them complicit in providing contraception. They contend the mandate violates the 1993 Religious Freedom Restoration Act (PL 103-141), or RFRA, which prohibits the government from substantially burdening the free exercise of religion. The justices must decide the case—the fourth to reach the high court concerning aspects of the 2010 law—before the end of the term in June.

Hijacking a Plan? 

Paul Clement, the attorney arguing for the Little Sisters, told the justices that the government already exempts churches and religious groups without the need for an accommodation. The government drew that line without including groups like the Little Sisters, Clement said, and it's only because the nuns take care of the poor that they must do the accommodation.

Chief Justice John G. Roberts Jr. seized onto the idea that the government doesn't just want the groups to do paperwork, but seeks to "hijack" a religious group's existing plan to provide the contraceptive coverage instead of using another plan.

Justice Anthony M. Kennedy, thought to be a swing vote who could give the Obama administration a victory in the case, also used the word hijack to refer to the government's actions.

Roberts, Kennedy, and Justice Samuel A. Alito Jr. all asked why the government couldn't set up a second insurance plan to provide birth control coverage. Roberts said the women could go on federal and state health care exchange websites and buy health insurance.

Solicitor General Donald Verrilli Jr. pointed out that contraception-only plans are not available on the exchanges and the law would have to change to allow for them. Roberts replied: "Well, the way constitutional objections work is you might have to change current law."

Verrilli called that solution a "one-off, jerry-rigged channel" and told the justices that Congress included the mandate to remove as many barriers as possible for women to obtain contraceptive coverage. The accommodation is a "sensible balance" between the competing interests of the law and religious values, Verrilli said.

Role of Congress

The four liberal justices expressed the view that the accommodation was a necessary evil for living in a society with competing religious beliefs and laws. Justice Ruth Bader Ginsburg contrasted the burden of filling out a form to the burden of a woman who would have to seek out another insurance plan in order to obtain birth control.

"So as in all things, it can't be all 'my way,'" Ginsburg said. "There has to be an accommodation, and that's what the government tried to do."

Justice Stephen G. Breyer pointed out that the insurance plan belongs to the insurer and not a religious nonprofit. He said there are times when government interest trumps religious beliefs, such as using taxpayer money to shovel snow in front of an abortion clinic, or Quakers having to pay taxes for a Vietnam War they didn't morally support.

"Sometimes when a religious person who's not a hermit or a monk is a member of society, he does have to accept all kinds of things that are just terrible for him," Breyer said. 

Justice Sonia Sotomayor said somebody has to tell the government who is eligible or not eligible for an exemption to the contraception mandate. She pointed out that unintended pregnancies and abortions go down when there is better access to contraceptive coverage.

And if there are too many exemptions allowed to government laws for religious objections, Sotomayor noted, "How will we ever have a government that functions?"

Justice Elena Kagan echoed that sentiment when it comes to Congress, and warned that the religious groups could be giving Congress reasons not to exempt churches in federal laws.

Congress often writes laws with exemptions for churches, Kagan said, but lawmakers might decide not to do so if it has to extend to all religious groups.

"These are terrible incentives to give a legislature, are they not?" Kagan asked Clement.

Government officials and legal groups also weighed in about the arguments.

Secretary of Health and Human Services Sylvia Mathews Burwell, speaking at a YMCA in Washington, D.C., to announce an expansion of diabetes prevention programs under Medicare, addressed the Supreme Court arguments being heard today. "We remain confident in our position," she said.

"We know what the issue is, which is an issue of balancing the important religious expression of people, at the same time as making sure we provide preventative healthcare to women that's needed. And we believe the accommodation we set out appropriately respects and takes into account those religious beliefs so that those can be protected, and at the same time provides coverage for those women for preventative care."

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Hospital Group Seeks to Beef Up Case for 340B Drug Discount

By Kerry Young, CQ Roll Call

March 25, 2016 -- A group representing hospitals that get the so-called 340B federal discount on drugs is asking its members to publicize how they use their pharmaceutical savings for efforts to aid people living in poverty. The move comes amid a battle over a federal plan to put the first significant rules in place for the decades-old program.

The group 340B Health has in recent weeks been working with hospitals to develop statements that they may eventually post on their websites, said Randy Barrett, a spokesman for the group. Using a template prepared by 340B Health, for example, the Bon Secours Baltimore Health System says the money it saves on prescription drugs allows it to operate mental health and substance abuse clinics and offer services such as teen parenting classes. The "340B in Action" posting for Bon Secours says the discount program also allows the urban hospital system to help patients who receive charity care get their medicines.

"Many of these patients would not get the medications needed to maintain health" without the 340B program, Bon Secours said.

Once fairly obscure, the 340B program is being fought over by two powerful industries. It started in the 1990s as a workaround to allow discount drug sales to hospitals to continue when new Medicaid rules took effect. Hospital groups are seeking to prevent Congress or the Obama administration from making changes that could reduce the savings that accrue from the 340B discount program. Changes to these rules could drive up costs for hospitals that now participate in the program. Hospitals and clinics and other organizations that participate in the 340B program purchased more than $7 billion in discount medicines in 2013, three times what was spent in 2005, according to the Medicare Payment Advisory Commission (MedPAC).

Federal officials are attempting to hash out a new framework for the 340B program. More than 1,200 comments have been posted on a federal web site about the draft guidance issued last year by the Health Resources and Services Administration (HRSA). A HRSA spokesman on Thursday said the agency is still reviewing these comments and there is not an estimated date for the release of the changes for the 340B program. Hospitals are seeking to thwart a bid through the HRSA guidance to limit the application of the discount to prescriptions that patients purchase at retail pharmacies.

Drugmakers have questioned the expansion of the 340B program in recent years, especially following the 2010 health overhaul. The overhaul provided more Americans with health insurance, but also expanded the eligibility criteria for the 340B program. About 2,140 hospital organizations participated in 2014, up from 583 in 2005, according to the Medicare Payment Advisory Commission. 

Hospital officials have dismissed the pharmaceutical companies' complaints largely as bids to end the 340B program, which requires them to offer substantial discounts to hospitals and clinics that serve many people living in poverty. Lawmakers, though, asked MedPAC to take a close look at the program, in which the aggregate discount is estimated at about 34 percent. Hospitals are not required to directly share savings with their customers, and insurers such as Medicare don't necessarily share in the savings.

MedPAC earlier this month recommended that Medicare reduce its payments for drugs purchased through the 340B program by 10 percent of the reported average sales price of these medicines. The Medicare savings would then be directed to a pool of money for covering uncompensated care. The MedPAC recommendation could bolster future attempts by Congress or HRSA to make changes in the program, although it's unlikely to trigger any near-term response.

The commissioners split 14-3 in a January vote on this 340B recommendation, which also included support for maintaining scheduled payment updates for hospital services. Some MedPAC commissioners earlier expressed reservations about changing the 340B program. The program is intended to help nonprofit hospitals that serve significant populations of poor communities, a point noted by Warner L. Thomas, chief executive officer at Ochsner Health System. He was among the MedPAC members who voted against the proposal.

"It's not like they just choose to be in this program," Thomas said at a January meeting. "They have to qualify to be in the program, and yet we're targeting those folks and reallocating their dollars."

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