MedPAC Meets

Earlier this week the Medicare Payment Advisory Commission met in Washington, D.C. to discuss a number of Medicare payment issues.

Among the issues on MedPAC’s November agenda were:

  • expansion of telehealth in Medicare
  • report on Medicare beneficiaries’ access to care in rural areas
  • effects of pharmaceutical rebates on Part D’s risk adjustment
  • improving competition among Medicare Part D’s benchmark plans
  • separately payable drugs in the hospital outpatient prospective payment system
  • Medicare Advantage payment and access for enrollees with end-stage renal disease

MedPAC is an independent congressional agency that advises Congress on issues involving the Medicare program.  While its recommendations are not binding on either Congress or the administration, MedPAC is highly influential in governing circles and its recommendations often find their way into legislation, regulations, and new public policy.  Because so many patients of private safety-net hospitals are insured by Medicare, MedPAC’s deliberations are especially important to those hospitals.

Go here for links to the policy briefs and presentations that supported MedPAC’s discussion of these issues.

Number of Uninsured Children Rising

The number of uninsured children in the U.S. is rising.

Since 2016, the number of uninsured children has risen by approximately 726,000 as the uninsured rate among children rose from 4.7 percent to 5.7 percent in 2019.

An increase of 320,000 children between 2018 and 2019 was the largest such increase in more than a decade.  Texas accounts for one-third of the four-year increase, or about 243,000 newly uninsured children, with Florida second with 55,000 newly uninsured children.

Any increase in the number of uninsured children poses a special challenge for private safety-net hospitals because those hospitals are generally located in communities with larger numbers of low-income and uninsured residents than areas served by the typical community hospital.

Learn more about the increase in the number of uninsured children in recent years and why it occurred in the report “Children’s Uninsured Rate Rises by Largest Annual Jump in More Than a Decade” from the Georgetown University Health Policy Institute’s Center for Children and Families.

Coronavirus Update for Wednesday, October 14

The following is the latest COVID-19 information from the federal government as of 2:30 p.m. on Wednesday, October 14.

Reminder:  HHS Webinar on Phase 3 General Distributions

  • HHS will hold a webcast on Thursday, October 15 at 3:00 (eastern) to give providers more information about the Phase 3 general distribution.  Go here to register and submit questions. NASH strongly recommends that any provider considering applying for a Phase 3 distribution view the webinar.  The application deadline for Phase 3 distributions is November 6.

NASH Advocacy

  • NASH has written to members of Congress urging them to prevail on HHS Secretary Alex Azar to restore his department’s June 2020 instructions for how hospitals should calculate their COVID-19-related revenue losses for purposes of receiving CARES Act Provider Relief Fund payments. Revised instructions, issued last month, include a new way of calculating hospital revenue losses that would force many private safety-net hospitals, and others, to return much of their Provider Relief Fund money.  Go here to see NASH’s request of Congress.

Provider Relief Fund

  • The Provider Relief Fund FAQ has been updated with one new question on page 6 that is marked “Added 10/9/2020.” The new question isCan providers use Provider Relief Fund distributions to repay payments made under the CMS Accelerated and Advance Payment (AAP) Program?” and the answer is “No, this is not a permissible use of Provider Relief Fund payments.”

CMS COVID-19 Stakeholder Calls

CMS hosts recurring stakeholder engagement sessions to share information related to its response to COVID-19.  These sessions are open to members of the health care community and are intended to provide updates, share best practices among peers, and offer attendees an opportunity to ask questions of CMS and other subject matter experts.

Office Hours

Office Hour Calls provide an opportunity for hospitals, health systems, and providers to ask questions of agency officials regarding CMS’s temporary actions that empower local hospitals and health care systems to increase hospital capacity, expand the health care workforce, and promote telehealth in Medicare.

Tuesday, October 27 at 5:00  (eastern) – dial-in and other information to be announced later

Nursing Homes

Wednesday, October 28 at 4:30 (eastern) – dial-in and other information to be announced later.

Department of Health and Human Services

Food and Drug Administration

Centers for Disease Control and Prevention

Congressional Research Service

  • The Congressional Research Service has published “Medicaid Telehealth Policies in Response to COVID-19,” a brief paper that offers an “…overview of telehealth actions in response to the Coronavirus Disease 2019 (COVID-19) Public Health Emergency (PHE).  It discusses how states leveraged existing flexibilities and PHE-specific federal authorities to increase the number of services, provider types, and other telehealth coverage options under Medicaid.”

 

NASH Asks Congress to Help Preserve Federal COVID-19 Aid for Hospitals

Protect the COVID-19 aid the federal government has given to private safety-net hospitals, NASH has asked in a letter to Congress.

The letter refers to changes in how the Department of Health and Human Services wants hospitals to calculate the revenue they lost as a result of COVID-19 – the justification in part for the Provider Relief Fund payments hospitals have received through the CARES Act.  In June, HHS told hospitals how to make that calculation but late last month it changed those directions in ways that could force many private safety-net hospitals and others to return some or even much of the federal aid they received.

In the letter, NASH asks members of Congress to sign a bipartisan letter asking HHS Secretary Alex Azar to restore the June instructions for calculating COVID-19-related lost hospital revenue.

Go here to read NASH’s message to Congress.

 

MedPAC Meets

Last week the Medicare Payment Advisory Commission met in Washington, D.C. to discuss a number of Medicare payment issues.

Among the issues on MedPAC’s October agenda were:

  • Medicare Advantage benchmark policy
  • indirect medical education:  current Medicare policy, concerns, and principles for revising
  • the evolution of Medicare’s advanced alternative payment models
  • vertical integration and Medicare payment policy

MedPAC is an independent congressional agency that advises Congress on issues involving the Medicare program.  While its recommendations are not binding on either Congress or the administration, MedPAC is highly influential in governing circles and its recommendations often find their way into legislation, regulations, and new public policy.  Because so many patients of private safety-net hospitals are insured by Medicare, MedPAC’s deliberations are especially important to those hospitals.

Go here for links to the policy briefs and presentations that supported MedPAC’s discussion of these issues and here for a transcript of the proceedings.

Congress Gives Hospitals Medicaid DSH Relief

Medicaid DSH allocations to states will not be reduced right away thanks to a new continuing resolution to fund the federal government through December 11.

The Medicare disproportionate share allocation cuts to the states, mandated by the Affordable Care Act but delayed by Congress several times, were delayed again earlier this year but scheduled to take effect on November 11.  With the latest continuing resolution, the cuts will be delayed yet another month.

Learn more about the delay of Medicaid DSH cuts and other aspects of the continuing resolution that affect hospitals in the Healthcare Dive article “Providers win Medicare loan extension, DSH relief but lose other asks in stop-gap spending law.”

Medicaid and CHIP Enrollment Rising in Pandemic

Medicaid enrollment rose 6.2 percent and CHIP enrollment 0.5 percent during the first four months of the COVID-19 public health emergency, the Centers for Medicare & Medicaid Services reports.

The enrollment increase can be traced to rising unemployment, with many people losing their employer-sponsored health insurance.  The new figures cover five months, from February through June, the latter four of which marked the beginning of the COVID-19 pandemic.

Private safety-net hospitals already serve significant numbers of Medicaid and CHIP patients; an increase in their rolls will prove financially challenging to them.

The information comes from CMS’s first monthly “Medicaid and CHIP Enrollment Trends Snapshot.”  Go here for CMS’s news release explaining its new initiative and here to see the trends snapshot itself.

NASH Submits Comments on Proposed Medicare Outpatient Regulation

NASH has submitted formal comments to the Centers for Medicare & Medicaid Services in response to that agency’s proposed 2021 Medicare outpatient prospective payment system rule.

That rule describes how CMS proposes paying hospitals for Medicare-covered fee-for-service outpatient care in 2021.

Writing on behalf of private safety-net hospitals, NASH addressed the following aspects of the proposed rule:

  • Proposed rate increase.   NASH endorsed CMS’s proposal to raise Medicare fee-for-service rates for outpatient care.
  • The 340B program.  NASH expressed strong opposition to CMS’s proposal to reduce  reimbursement for prescription drugs to 340B-eligible hospitals.
  • Phase-out of the inpatient-only services list.  NASH asked CMS not to phase out the inpatient-only services list.
  • Changes in the level of supervision for selected outpatient therapeutic services.  NASH conveyed its support for proposed reductions in such supervision.
  • The physician-owned hospital exception.  NASH opposed CMS’s proposal to ease the current limit on the expansion of high-Medicaid physician-owned hospitals.

Learn more about NASH’s reasoning behind each of these positions in its letter to CMS on the proposed 2021 Medicare outpatient prospective payment system regulation.

Coronavirus Update for Thursday, October 1

The following is the latest COVID-19 information from the federal government as 2:30 p.m. on Thursday, October 1.

NASH Advocacy

  • NASH has written to Health and Human Services Secretary Alex Azar asking HHS to abandon its new methodology for calculating hospitals’ COVID-19-related lost revenue. The new methodology, introduced recently, would redefine lost revenue as change in net operating income from 2019 to 2020.  A previous methodology gave hospitals greater latitude for calculating lost revenue.  In its letter, NASH explains that such a change would be especially disadvantageous to private safety-net hospitals because many of those hospitals have relatively modest resources and were forced to take sometimes dramatic steps to reduce their costs during the pandemic.  Under the new definition, these hospitals would be required to return much of the Provider Relief Fund money to the federal government.

Provider Relief Fund

  • HHS announced the planned distribution of $20 billion in new funding for providers on the front lines of the COVID-19 pandemic.  Under this Phase 3 General Distribution allocation, providers that have already received Provider Relief Fund payments will be invited to apply for additional funding that considers financial losses and increased expenses experienced due to COVID-19.  Previously ineligible providers, such as those that began practicing in 2020, will also be invited to apply, and an expanded group of behavioral health providers confronting the emergence of increased mental health and substance use issues exacerbated by the pandemic will also be eligible for relief payments.
  • This new distribution should be especially helpful for providers that have received minimum or no targeted relief, such as safety-net, high-impact, or rural distributions.
  • Providers can begin applying for funds on Monday, October 5, 2020 and the application deadline is November 6.
  • According to HHS’s news release,
  1. All provider submissions will be reviewed to confirm they have received a Provider Relief Fund payment equal to approximately 2 percent of patient care revenue from prior general distributions. Applicants that have not yet received Relief Fund payments of 2 percent of patient revenue will receive a payment that, when combined with prior payments (if any), equals 2 percent of patient care revenue.
  2. With the remaining balance of the $20 billion budget, HRSA will then calculate an equitable add-on payment that considers the following:
    • A provider’s change in operating revenues from patient care.
    • A provider’s change in operating expenses from patient care, including expenses incurred related to coronavirus.
    • Payments already received through prior Provider Relief Fund distributions.

Go here to learn more about the distribution.

Department of Health and Human Services

Centers for Medicare & Medicaid Services

  • Congress has passed, and the president has now signed, a continuing resolution to fund the federal government through December 11.  The resolution includes a provision that would change the terms under which providers must repay federal CARES Act money they received through the Medicare Accelerated and Advance Payment program, which is administered by CMS.  Now, recoupment will begin only a year after providers received their loan and recoupment is reduced from 100 percent to 25 percent during the first 11 months of repayment and 50 percent for the six following months, with hospitals now having 29 months to repay their loans in full before they would need to begin paying interest.  That interest rate, too, is lowered under the continuing resolution from 9.6 percent to 4.0 percent.
  • CMS has updated its compendium of temporary waivers and flexibilities for teaching hospitals, teaching physicians, and medical residents during the COVID-19 pandemic.  A new flexibility, on page 2 of the document, explains that instead of requiring that new Medicare GME affiliation agreements be submitted to CMS and MACs by July 1, 2020 for the academic year starting July 1, 2020 and amendments to Medicare GME affiliation agreements be submitted to CMS and the MACs by June 30, 2020 for the academic year ending June 30, 2020, CMS is permitting hospitals to submit new and/or amended Medicare GME affiliation agreements as applicable to CMS and the MACs by January 1, 2021.
  • CMS has updated its COVID-19 testing methodology for nursing homes by revising the methodology it employs to determine the rate of COVID-19 positivity in counties across the country.
  • CMS has published guidance addressing the emergency preparedness testing exercise requirements for COVID-19.  CMS regulations for emergency preparedness require specific testing exercises to validate facilities’ emergency programs.

Food and Drug Administration

National Institutes of Health

Federal Communications Commission

Back Off 340B Cuts, HHS Tells Drug Company

Eli Lilly and Company is being presumptuous in assuming that the federal government will approve its plan to cease providing some federally mandated prescription drug discounts under the section 340B prescription drug discount program and does so at its own peril, the U.S. Department of Health and Human Services warned the company in a strongly worded letter.

Without addressing the merits of Eli Lilly’s request, HHS found the manner in which the company sought to force the federal government’s hand on the matter to be unacceptable.  HHS also questioned the timing of the company’s request in its recent letter, writing that

…we believe the timing of your pricing changes is, at the very least, insensitive to the recent state of the economy.  Although the economy is rebounding at a record rate, the unemployment and under-employment rates are still temporarily higher than at the beginning of the year due to COVID-19.  Many Americans and many small businesses have had difficulty making ends meet.  Lilly, on the other hand, seems to be enjoying an outstanding year.

The HHS letter also observes that

…during this same period, most health care providers, many of which are covered entities under section 340B, were struggling financially and requiring federal assistance from the Provider Relief Fund established by the CARES Act.  Many continue to struggle and depend on emergency taxpayer assistance.  It is against this backdrop that you are effectively increasing the price of 10 mg and 20 mg Cialis by more than 500,000 percent and have done the same for other drugs in your portfolio.

The 340B program, which enables hospitals that serve especially large numbers of low-income patients to purchase prescription drugs at a discount to dispense to such patients on an outpatient basis, has long been a vital tool in the ability of private safety-net hospitals to serve their community.  NASH has long supported the program, doing so most recently in a letter earlier this month to members of Congress.

The HHS letter to Eli Lilly and Company – one of five companies attempting to redefine 340B requirements – concludes with a warning that should the company proceed with its plan, doing so could result in legal action “…in the event that Lilly knowingly violates a material condition of the program that results in over-charges to grantees and contractors.”

Go here to see the HHS letter to Eli Lilly and Company.