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The Medliminal Washington Report 5.1.18

May 1, 2018

Washington, D.C. cityscape with Washington Monument and Jefferson Memorial.

The House and Senate spent their final week in Washington before recessing until May 7 working on competing versions of legislation to address the opioid epidemic. A Senate committee unanimously passed a wide-ranging bill, while a House committee passed 57. Both chambers are hoping to have a bill passed and to the president’s desk sometime this summer, but the process could get bogged down. CMS made a lot of news this week, issuing proposed rules to increase hospital price transparency and announcing plans to make more data available to the public. Meanwhile, the IRS reversed course on annual limits for health savings account contributions. We’ve got it all covered in this week’s health care review.


The Administration

CMS Proposes Medicare Rules to Increase Hospital Price Transparency

On April 24, the Centers for Medicare & Medicaid Services (CMS) released its massive 1,900 page hospital inpatient payment system proposed rule, that, in part, would require hospitals to publish online a list of their standard charges at least once a year. While hospitals are presently required by CMS guidelines to either publicly make available a list of their standard charges, or their policies for allowing the public to view a list of charges, CMS is specifically requiring that hospitals post this information annually starting  January 1, 2019.

According to a CMS statement, the policy changes in the proposed rule would “further advance the agency’s priority of creating a patient-centered healthcare system by achieving greater price transparency, interoperability, and significant burden reduction so that hospitals can operate with better flexibility and patients have what they need to become active healthcare consumers.”

CMS also requested public comments on what type of charge information hospitals should publish, and how the agency should enforce the requirement, such as making it a condition of Medicare participation. The agency will accept public comments on the proposed rule by June 25.

CMS Announces Release of Medicare Advantage Data to Researchers

On April 26, CMS Administrator Seema Verma announced the agency’s new Data Driven Patient Care Strategy as part of the MyHealthEData initiative. In March, the Administration announced the creation of the program, a government-wide initiative spearheaded by the White House Office of American Innovation, designed to help patients access and share their medical data while protecting their privacy.

As part of this effort, CMS is expanding data available to researchers starting with 2015 Medicare Advantage (MA) encounter data, which provides detailed information about services to beneficiaries enrolled in a Medicare Advantage managed care plan in calendar year 2015. Researchers already have access to Medicare claims data for the fee-for-service program, and this release of MA data will provide a fuller picture of care provided to Medicare beneficiaries. CMS also plans to release Medicaid and CHIP data next year, realizing such data has the potential to facilitate research that will help drive innovation and competition in the healthcare system and, ultimately, help doctors and patients make the best decisions about care.

“Over the years, CMS has released a considerable amount of data in a variety of formats—data that is important to the work of researchers, innovators and thought leaders,” Administrator Verma said. “Data has the potential to help produce better, more targeted treatments for patients, improving their quality of life while at the same time reducing costs.”

IRS Reverses Course on HSA Limit for Family Coverage

On April 26th, the IRS released Revenue Procedure 2018-27, effectively reinstating the $6,900 limit on 2018 health savings account (HSA) contributions for family coverage. The $3,450 limit for an individual with self-only coverage remains unchanged.

On May 4, 2017, the Department of the Treasury and the IRS released Revenue Procedure 2017-37, which established the $6,900 limit for family coverage. However, a change in the inflation adjustment calculations for 2018 under the tax reform law enacted in December led Treasury and the IRS to release Revenue Procedure 2018-18 on March 2, 2018, which reduced the annual limit by $50 to $6,850 for 2018. At the time, the Treasury Department IRS failed to provide transition relief for individuals who had already contributed up to the limit, or employers suddenly facing numerous unanticipated administrative burdens. Since then, employers, trade groups, and other stakeholders have asked the IRS to reconsider the retroactive limit adjustment and allow the $6,900 limit announced in 2017 to remain applicable. The IRS relented, stating that it “would be in the best interest of sound and efficient tax administration” to apply the originally announced contribution limit.

The new guidance also clarifies how taxpayers who contributed the full $6,900 and then received a distribution of excess contributions and earnings based on the previous rule – they can treat the distribution as a mistake and repay the HSA without any tax or reporting consequences.


House Subcommittee Approves 57 Bills Addressing Opioid Epidemic, Senate Committee Unanimously Approves its Version

The House Energy and Commerce Health Subcommittee on April 25 approved a wide-ranging set of proposals intended to address the nation’s opioid crisis. In total, the Subcommittee advanced 57 bills to the full committee, which is expected to take up the bills in a committee mark-up sometime in May.

“Many of these bills are a product of bipartisan effort and compromise. Taken together, the bills before will improve access to care for individuals suffering from substance use disorder, provide our health care system with tools and resources it needs to care for patients, and help prevent future misuse of opioids,” Subcommittee Chair Michael Burgess (R-TX) said in a press statement. “Some of these bills remain in discussion draft form intentionally, signaling our commitment to working with members and stakeholders to get technical details right so our agencies can implement these promising solutions in a timely manner.”

On April 24, the Senate Health, Education, Labor and Pensions (HELP) Committee unanimously approved its own opioids package – the Opioid Crisis Response Act of 2018 (S.2680) – with the intent of getting it on the floor for a vote this summer. House Energy and Commerce Chairman Greg Walden (R-OR) has indicated his intentions to have legislation passed through committee and on to the House floor by Memorial Day.

House Member Introduces Bills to Allow Auto-Enrollment and Change ACA Open Enrollment

U.S. Rep. Ami Bera (D-CA) has introduced two bills that would allow states to set up programs that automatically enroll people in exchange plans or in Medicaid (depending on which programs they qualify for), and align the exchanges’ open enrollment period with tax season. The two bills – the Pathway to Universal Coverage Act and the Easy Enrollment Act – will certainly not receive a floor vote this year, but Bera is optimistic that moderate Republicans could support his proposals if Democrats win control of the House following November’s mid-term elections.

Automatic enrollment in some basic level of insurance coverage has been floated by both liberal groups and Republican senators. Senators Susan Collins (R-ME) and Bill Cassidy (R-LA) proposed it for their “Patient Freedom Act” in 2017 as the coverage incentive in place of the ACA’s individual mandate. Like Bera’s plan, people would have been allowed to opt out of the coverage with no penalty.

As for aligning tax season with health care open enrollment, Bera suggests that there is evidence “that the current timing of enrollment, during the holiday season, is when people are most over-burdened and financially strained. This could be limiting the number of healthy people signing up for coverage. Shifting the enrollment period to tax season when people have up-to-date financial information means families can make more informed decisions when they aren’t under stress trying to make ends meet”

Health Policy

Judge Grants Class-Action Status for Insurers in CSR Litigation

Judge Margaret Sweeney of the U.S. Court of Federal Claims has granted class-action status to health insurers that failed to receive payments as part of the ACA’s cost-sharing reduction (CSR) program, which President Trump ended last October. Judge Sweeney granted a motion for class certification in a lawsuit filed by Common Ground Healthcare Cooperative, a Wisconsin ACA co-op. The ruling allows those insurers that did not receive full CSR payments and that meet class requirements to join the litigation and pursue the claims alleged by Common Ground. The federal government argued that CSR relief should be mitigated by the fact that insurers were allowed to increase premiums for 2018 on silver plans sold on the ACA exchanges to offset the loss of the CSR payments (a.k.a “silver loading”).

There are potentially 280 members, the judge said. Judge Sweeney will allow plaintiffs to pursue claims for the last few months of 2017, worth about $2 billion, and for all of 2018. If the ruling stands up on appeal, the federal government could be liable for up to $100 billion over a decade.

New Hacking Group Targets Health Care Providers, Manufacturers

According to a new report by the cyber security firm Symantec, a newly discovered group of computer hackers is targeting systems tied to the healthcare industry in the U.S. and around the world. The group, which Symantec has dubbed Orangeworm, has reportedly deployed custom malware on networks of healthcare providers and related organizations. The malware has been found on computers used to control medical imaging devices like X-ray and MRI machines, as well as some devices used to help patients fill out consent forms for medical procedures. The group has targeted between 24 and 36 organizations this year alone, including companies in healthcare, IT, manufacturing and logistics.

As recent HHS data makes clear, cybersecurity problems continue to plague the healthcare industry, though the number of reported breaches is slightly down for the first three months of 2018, with 77 breaches compared to 83 during the same period last year. Information on more than 1 million people was breached during the first quarter of 2018, compared to 1.7 million in the first quarter of 2017.

In The States

States Considering Legislation to Tax the Sale of Prescription Opioids

Lawmakers in several states are proposing bills to tax the sales of prescription opioid painkillers, generally at the wholesale level. Some call for the wholesaler to pay the state, while other versions call for taxes based on the potency of the opioid, potentially ranging from 10 cents to 15 cents per pill. An approach proposed in Pennsylvania would charge 10 percent of the purchase price of the first sale of a drug in the state. Under the only opioid tax to be adopted so far, New York opted to charge distributors and manufacturers a total of $100 million annually based on their market share of opioids.

In all, bills seeking to tax opioids have been introduced in 15 states – Alaska, California, Delaware, Idaho, Iowa, Kentucky, Maine, Massachusetts, Minnesota, Montana, New Jersey, New York, Pennsylvania, Tennessee and West Virginia – nearly all of which have been introduced since 2017.

California Bill Establishing Healthcare Price Controls Passes out of Committee

The California Assembly Health Committee advanced legislation (AB 3087) that would give the state government power to set price controls on hospital stays, doctor visits and other medical services. The bill would authorize an independent commission to set prices on private health plans – based on what Medicare pays for the same services – including those offered by employers and purchased individually. The nine-member price-setting commission would be comprised of political appointees with no requirement for experience in healthcare delivery. In fact, the measure prohibits healthcare professionals from participating on the commission.

The bill still faces an uphill fight. It is backed by labor unions and consumer groups, but opposed by physicians and hospitals, setting the stage for a brawl between two of the most powerful lobbies in the state. The bill also faces skepticism from single payer advocates, who mounted a vigorous effort to push universal state-financed healthcare last year. That bill passed the Senate, but ultimately died in the Assembly.

Maine Governor Sued for Blocking Medicaid Expansion Despite State Ballot Measure

On April 30, advocates filed suit against Maine Governor Paul LePage and his administration for failing to expand the state Medicaid program, and ignoring a ballot initiative passed in 2017 that ordered the state to expand the program. The lawsuit is being led by Maine Equal Justice Partners , an anti-poverty organization, Maine Primary Care Association, Maine Consumers for Affordable Health Care and other advocates.

The governor, who vetoed five bills to expand Medicaid pursuant to the ACA, has said that he will not sign any expansion bills until the state legislature finds a way to pay for the program. Under the 2017 ballot measure, which passed with 59 percent of the vote, an expansion plan must be submitted to the federal government by April 3, with expanded eligibility to begin by July 2. An estimated 70,000 people would be covered.

The Week Ahead

The U.S. House of Representatives and Senate are in recess until May 7.