Healthcare Policy Update: April 2016

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Senate HELP Committee to hold final innovation markup next week. When the Senate returns from its spring recess next week, the Senate Health, Education, Labor and Pensions Committee on April 6 will hold its third and final markup of medical innovation bills as the companion effort to the House-passed 21st Century Cures Act (H.R. 6). The panel will consider five bills: The FDA and NIH Workforce Authorities Modernization Act (S. 2700); the Promise for Antibiotics and Therapeutics for Health Act (S. 185); the Advancing Precision Medicine Act of 2016 (S. 2713); the NIH Strategic Plan and Inclusion in Clinical Research; and the Promoting Biomedical Research and Public Health for Patients Act. The HELP Committee so far has approved 14 Cures bills, including a bill addressing interoperability, but members still haven’t agreed on how to pay for the proposals. Democrats have said they won’t support the package unless it includes mandatory funding for the NIH and FDA.

ONC chief asks House panel to help prevent data blocking. Before Congress adjourned for the spring recess, the House Oversight and Government Reform Subcommittees on Information Technology and Health Care, Benefits, and Administrative Rules held a hearing on health information technology. National Coordinator for Health IT, Dr. Karen DeSalvo, testified on the government’s efforts to promote interoperability and urged members to consider policies to prevent health information blocking. In some cases, she said, a lack of understanding about HIPAA may discourage record sharing. Lawmakers recognized the progress made on EHR adoption but agreed that there are still barriers to electronic health data exchange. Other members, such as Information Technology Subcommittee Chairman Will Hurd (R-TX), raised concerns that too many regulations governing health data may hurt innovation.

OMB reviewing MACRA proposed rule. The White House Office of Management and Budget is now reviewing a proposed rule that will outline implementation of the MeritBased Incentive Payment System (MIPS) and bonus payments for certain eligible Alternative Payment Models (APMs) under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). The Centers for Medicare & Medicaid Services (CMS) issued a Request for Information late last year seeking stakeholder comment to inform the proposed rule. The highly anticipated proposal was received by the OMB March 25 and is expected to be released at some point in April. CMS will need to finalize MACRA payment policies by November 1 if it intends, as is expected, to use 2017 performance to 2 © 2016 217 Commercial St, Ste 500, Portland, ME 04101 | 207.747.5104 | nrhi.org administer MIPS payment adjustments and APM bonuses. CMS says MIPS will include flexible reporting. Rob Anthony, deputy director of CMS’ Quality Measurement and ValueBased Incentives Group, said March 21 that MIPS will include “flexible” quality measure reporting. Speaking at the State Healthcare IT Connect Summit in Baltimore, Anthony said MIPS will allow providers to choose from a number of quality measures that will be sued to determine their Part B reimbursement. CMS is expected to publish a proposed rule on MIPS requirements within the next few months.

Mandatory bundled payment program. April 1 marks the first day of Medicare’s Comprehensive Care for Joint Replacement program for hospitals, which the government hopes will shave off about 1.2 percent of the $12.3 billion the Medicare program is expected to spend on knee and hip replacements over the next five years. All hospitals in 67 randomly selected metropolitan areas are required to participate. The rules will hold hospitals accountable for all the costs of hip and knee replacements for 90 days. If patients recover and go home quickly, hospitals could reap savings. If they have complications or need lengthy stays in a rehab facility, hospitals could owe Medicare instead, starting next year. Earlier this week, Avalere Health released an analysis finding that 60 percent of hospitals could face penalties if they are not able to rein in total episodic costs. The CCJR is the first mandatory demonstration program under the Obama administration’s plan to shift at least 50% of Medicare spending to alternative-payment models by 2018. CMS is also developing a mandatory demo targeting Part B drug spending.

CMS announces second round of applications for Next Generation ACO Model. CMS on March 21 announced the second round of applications for the Next Generation Accountable Care Organization (ACO) model. The first performance period for round two will start on Jan. 1, 2017. There are currently 21 ACOs participating in the Next Generation ACO Model, which allows ACOs that are experienced in coordinating care to assume higher levels of financial risk and reward than are available under the Pioneer ACO program. Organizations interested in applying to the Next Generation Model have until May 2, 2016 to submit a Letter of Intent.

HHS launches Phase 2 HIPAA audits. On March 21, the HHS Office for Civil Rights (OCR) launched the long-awaited Phase 2 of its audit program to assess compliance with the HIPAA Privacy, Security, and Breach Notification Rules. Phase 1 was conducted as a pilot program in 2011 and 2012 and examined only covered entities. Phase 2 audits will target both covered entities and business associates. Entities selected for audits will be notified by email and will be required to submit requested documents through a portal on the OCR website.

CMS says diabetes prevention model will save Medicare money. HHS announced March 23 that the CMS Independent Office of the Actuary certified that expansion of the Diabetes 3 © 2016 217 Commercial St, Ste 500, Portland, ME 04101 | 207.747.5104 | nrhi.org Prevention Program, a model funded by the Affordable Care Act, would reduce net Medicare spending. The agency found that a three-year pilot program run by the YMCA helped prevent high-risk enrollees from fully developing type 2 diabetes and saved Medicare $2,650 per enrollee over a 15-month period. This marks the first time that a preventive service model from the CMS Innovation Center has been deemed eligible for expansion into the Medicare program. More information on a potential expansion of the Diabetes Prevention Program will be included in the CY 2017 Medicare Physician Fee Schedule proposed rule, set to be released this summer.

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