Regulatory Developments of Note in Q1 2019

Regulatory changes – particularly when they concern reimbursement – have a profound impact on the healthcare market. Here, GHA lists some key regulatory news announced in Q1 2019.

Have a development you’d like to add to the list? Reach out to us at research@ghadvisors.net.

MedPAC Pushes 5% Home Health Payment Cut, Says Program Integrity Remains a Challenge

“The Medicare Payment Advisory Commission (MedPAC) submitted its Medicare payment policy report to Congress on Friday, again recommending a 5% home health payment rate reduction for the coming year and maintaining its view that program integrity remains problematic. MedPAC is required to report to Congress each March on the Medicare fee-for-service (FFS) payment systems, the Medicare Advantage (MA) program and the Medicare prescription drug program. Its recommendation to cut the home health payment rate by 5% in 2020 follows similar recommendations in 2018 and 2017.” Read more

Top Antitrust Lawmaker Takes Aim at Health-Care Consolidation

“An influential House lawmaker intends to start crafting legislation allowing the Federal Trade Commission to more easily punish anticompetitive behavior in the health-care industry. Rep. David Cicilline (D-R.I.), the chairman of the House Judiciary antitrust subcommittee, said in an interview that he is going to start working on legislation based on recommendations from economics professors and researchers at a recent hearing. Courts typically push back on what the FTC considers anticompetitive practices because the law is unclear, Fiona Scott Morton, an economics professor at the Yale School of Management, said at the March 7 hearing. With more guidance, the FTC could more easily go after those violations, she said.” Read more

MedPAC Opposes Episode-Based Payments for Post-Acute Care Facilities

“A panel of Medicare advisors decided that a future unified payment system for post-acute care facilities should be based on each individual patient stay and not for the entire episode of care. The Medicare Payment Advisory Commission on Friday discussed how to proceed on creating a unified prospective payment system to improve the accuracy of Medicare fee-for-service payments for post-acute care settings. While commission members were encouraged about an episode-based system, the idea was scuttled after concerns about whether post-acute care facilities would discharge patients too soon under the system.” Read More

OIG: Nonprofit Hospital Can Offer Free In-Home Services Despite Anti-Kickback Rules

“A hospital can provide free home care to reduce readmissions, despite a federal ban on giving patients freebies that could influence their care decisions. That’s according to a recent advisory opinion from the U.S. Department of Health and Human Services’ (HHS) Office of the Inspector General (OIG). OIG’s advisory opinion comes in response to a request for guidance from an unnamed nonprofit medical center, who offers free in-home care to patients with congestive heart failure through a program it hopes to expand to include chronic obstructive pulmonary disease (COPD). While offering patients free in-home care could violate anti-kickback rules prohibiting programs that drive business from patients, the OIG doesn’t see the program as a problem.” Read more

CMS Makes Changes to Nursing Home Star Ratings

“The CMS will update the star ratings on Nursing Home Compare in April with several changes including new ratings for health inspection performance and stricter criteria for staffing level ratings. The changes to the ratings, which will likely go live in mid-April, are part of an ongoing effort by the CMS “to improve the accuracy and value of the information found on the site,” the agency said Tuesday in a release. The CMS has made modified the ratings several times over the years, including most recently replacing the collection of staffing data from a self-reported process to the Payroll-Based Journal system, which is said to be more accurate because it requires nursing homes to submit their payroll information every quarter.” Read more

U.S. Seeks to Cut Dialysis Costs with More Home Care Versus Clinics

“The Trump administration is working on a new payment approach for treating kidney disease that favors lower cost care at home and transplants, a change that would upend a dialysis industry that provides care in thousands of clinics nationwide. The goal is to reduce the $114 billion paid by the U.S. government each year to treat chronic kidney disease and end-stage renal disease, a top area of spending. The changes pose a particular risk to DaVita Inc and Fresenius Medical Care AG, which operate more than 5,000 U.S. dialysis clinics and control around 70 percent of the market. They could also provide an opening for new rivals, including CVS Health Corp, which seeks to offer lower-cost home dialysis, and startups Cricket Health and Somatus, which focus on early intervention to slow progression to kidney failure.” Read more

Medicare’s Solution for Saving Primary Care: Blow up the Office Visit

“Medicare’s innovation chief, Adam Boehler, wants to ‘blow up’ America’s system of paying for primary care by revamping one of its most fundamental building blocks: the old-fashioned office visit. In coming weeks, Boehler’s office is expected to introduce a new model of paying primary care physicians that may strongly encourage them to use more modern methods, such as telehealth and online consultations, to care for patients in their homes and keep them out of hospitals.” Read more

FTC Announces Changes to Hart-Scott-Rodino Filing Thresholds

“On Feb. 15, the Federal Trade Commission announced revised thresholds for pre-merger filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act). These thresholds determine whether companies are required to notify federal antitrust authorities about a transaction. The new thresholds – which are expected to be published in the Federal Register the week of Feb. 18, 2019, to take effect 30 days after their publication – are as follows.” Read more

Medicare Proposes Coverage for New, Expensive Cancer Treatment

“Medicare would pay for new, expensive cancer therapies under a proposal released Friday by the Trump administration. The proposal would require that Medicare cover Food and Drug Administration’approved CAR T-cell therapies, which uses a patient’s own immune system to fight cancer. Medicare currently isn’t required to pay for it. Under the proposal, individuals who use Medicare to pay for CAR T-cell therapy would have to be monitored for two years post-treatment to inform future payment policies.” Read more

HHS Will Test Paying Ambulances for Trips to Alternative Sites, Telemedicine

“HHS will test allowing ambulance suppliers and providers to transport Medicare and Medicaid patients to areas besides the emergency room, such as a doctor’s office or urgent care facility, or use telemedicine, in a bid to reduce unnecessary trips to the hospital. The Center for Medicare and Medicaid Innovation will conduct an experiment on a new payment model for Medicare to create new incentives on emergency transport and care. The model would apply to Medicare fee-for-service beneficiaries. Currently Medicare pays for ambulance services to take patients to an emergency room, which Trump administration officials say hinders creation of a value-based system.” Read more

CMS, ONC Propose New Regulations to Transform the Future of Interoperability and Patient Access

“Through two immense proposed rules released Monday morning, the first day of the HIMSS19 conference in Orlando, federal health officials are pulling an array of levers that fall under the core aim to improve interoperability and patient access to data. The two proposed rules’one from CMS (the Centers for Medicare & Medicaid Services) and one from ONC (the Office of the National Coordinator for Health IT) are separate, but at the same aligned as the two agencies within HHS (the Department of Health & Human Services) look to further advance the nation’s healthcare interoperability progress. The two rules represent great significance for health IT stakeholders, who will now be more under the microscope than ever before as it relates to their efforts in making sure that health information is seamlessly moving – while not restricting such efforts.” Read more

CMS Lifts Moratoria on Home Health After 5 Years

“The long-standing moratoria on new Medicare home health agencies is no longer in effect anywhere in the U.S. The Centers for Medicare & Medicaid Services (CMS) allowed the temporary ban to expire on Jan. 30, a move that will likely improve patient access to home-based care in related markets, experts say. In the past, the moratorium has prompted some home health agencies interested in entering new markets under moratoria to do so through mergers or acquisitions, Barry Cargill, president of Michigan Home Care and Hospice Association, told Crain’s Detroit Business. But it’s unlikely the change will have much of an effect on 2019 M&A activity, which is expected to boom as the population ages and more health care players embrace the value that home health agencies offer, according to M&A experts.” Read more

HHS Proposal Could Kill PBM Rebates

“In a highly anticipated move to curb prescription drug prices, the Trump administration announced plans Thursday to effectively kill the rebates drug makers pay to pharmacy benefit managers. The idea is to pass savings along to patients by increasing transparency, encouraging discounts given directly to consumers rather than middlemen, and prohibiting a compensation system that incentivizes annual price hikes, according to Health and Human Services. “This proposal has the potential to be the most significant change in how Americans’ drugs are priced at the pharmacy counter, ever, and finally ease the burden of the sticker shock that millions of Americans experience every month for the drugs they need,” HHS Secretary Alex Azar said in a statement.” Read more

Medicare Advantage Plans See Smaller Rate Hikes for 2020

“The CMS on Thursday proposed increasing the baseline Medicare Advantage payment rates for 2020 by 1.59%, well below the 3.4% rate hike plans received in 2019. The agency also outlined changes to the program to address the opioid crisis, including encouraging Medicare Advantage plans to offer targeted benefits and cost-sharing reductions to patients with chronic pain or undergoing addiction treatment. The rate announcement is the second part of the 2020 Medicare Advantage Advance Notice. In the first part, released in December, the CMS proposed moving ahead with a plan to adjust payments to reflect the total number of conditions each patient has, in addition to viewing each condition individually in the risk adjustment model.” Read more

CMS Outlines Further Expansion of Medicare Advantage Benefits for In-Home Services, the Chronically Ill

“The Centers for Medicare & Medicaid Services (CMS) is proposing to further expand Medicare Advantage (MA) flexibilities for certain in-home services and supports for chronically ill Americans starting in 2020, the agency announced Wednesday. The move is in line with CMS’ larger goals of broadening the scope of the MA program, which has quickly grown in popularity over the past several years. Specifically, the newly proposed changes will help older adults and chronically ill individuals pick plans that are more closely catered to their health needs, according to CMS. Federal policymakers previously announced they were providing new supplemental benefits and flexibilities for the 2019 plan year last April.” Read more

CDRH Revamps 510(k) Clearances with ‘Safety and Performance Based Pathway’

“A US Food and Drug Administration (FDA) final guidance sets the stage for how the agency intends to make the voluntary option for 510(k) clearance the main pathway for medical device regulatory reviews. The push for the alternative approach to demonstrating substantial equivalence stemmed from a Congressional ask for FDA to apply least burdensome provisions for medical devices. It also coincides with the agency’s push for modernization of CDRH’s premarket notification pathways. The final guidance ‘expands the concept of the Abbreviated 510(k) program by explaining how substantial equivalence for certain device types may be demonstrated in a way that is less burdensome, but at least as robust,’ FDA said. ‘Use of this expanded program may also make the review of 510(k) submissions more efficient, thereby reducing burdens on the agency and possibly review times for individual submissions.’ Yet industry experts have expressed doubts as to whether the framework described in the guidance document will achieve the intended benefits of a program expansion.” Read more

CMS to Test Hospice Carve-In Under Medicare Advantage

“The Medicare Advantage (MA) carve-in that many industry insiders pegged as ‘inevitable’ has finally arrived. The Centers for Medicare & Medicaid Innovation (CMMI) on Friday morning announced it is expanding the MA Value-Based Insurance Design (VBID) model, using VBID to test out several wide-ranging updates to MA offerings, including a hospice carve-in set to take effect in 2021. Hospice care is currently not allowed as a benefit covered in MA plans. Specifically, beginning in the 2021 plan year, the VBID model will test allowing Medicare Advantage plans to offer Medicare’s hospice benefit. The change is designed to increase access to hospice services and facilitate better coordinate between patients’ hospice providers and their other clinicians, according to CMS officials.” Read more

FDA Releases Regulatory Framework for Digital Health: 4 Things to Know

“The FDA has drafted a new regulatory framework outlining how it wants to review digital health products, based on a pilot program the agency rolled out in 2017. Here are 4 things to know.” Read more

CMS Finalizes Overhaul of Medicare ACO Program, Accelerating the Move to Two-Sided Risk

“The Centers for Medicare & Medicaid Services (CMS) on December 21 published a final rule that makes sweeping changes to the Medicare Shared Savings (MSSP) Accountable Care Organization (ACO) program, with the goal to push Medicare ACOs more quickly into two-sided risk models. Referred to as ‘Pathways to Success,’ the Trump Administration’s overhaul of Medicare’s ACO program will redesign the program’s participation options by removing the traditional three tracks in the MSSP model and replacing them with two tracks that eligible ACOs would enter into for an agreement period of no less than five years: the BASIC track, which would allow eligible ACOs to begin under a one-sided model and incrementally phase in higher levels of risk; and the ENHANCED track, which is based on the program’s existing Track 3, providing additional tools and flexibility for ACOs that take on the highest level of risk and potential rewards. At the highest level, BASIC ACOs would qualify as an Advanced Alternative Payment Model (APM) under the Quality Payment Program.” Read more

CMS Proposes Fee Increase for Labs

“CMS issued a notice to raise fees 20 percent for laboratories certified under the Clinical Laboratory Improvement Amendments, the agency said Dec. 28. The increase marks the first fee change in 20 years. CMS said the current fee schedule was based on assumptions made in 1992 about the program’s operations and workload. To maintain the CLIA program through fiscal year 2021, CMS is proposing a 20 percent fee increase.” Read more