Trump Administration releases broad plan to address drug prices

On May 11, 2018, the President released the American Patients First Trump Administration Blueprint to lower drug prices and reduce out of pocket costs. The Blueprint includes a number of policy proposals focused on the way drugs are priced both in the US and globally, some of which may be achieved through regulatory changes, while others may require legislation or international trade negotiations.

Many of the ideas covered in the Blueprint echo previous policies described both in the Council of Economic Advisors (CEA) report entitled, “Reforming Biopharmaceutical Pricing at Home and Abroad,” as well as items found in the President’s Fiscal Year 2019 budget.

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CMS issues request for information on Direct Primary Care

On April 23, 2018, the Centers for Medicare and Medicaid Services (CMS) released a Request for Information (RFI) seeking input on opportunities to create Direct Primary Care (DPC) arrangements between traditional fee-for-service Medicare, Medicaid, and Medicare Advantage (MA) plans and primary care or multi-specialty group practices. In addition to potential roles for DPC in CMS programs, CMS also requested comment on how DPC can be a part of current Accountable Care Organization (ACO) initiatives like the Medicare Shared Savings Program.

The RFI also refers to Direct Primary Care as “Direct Provider Contracting.”

Comments are due on May 25, 2018.

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CMS makes changes to electronic health records, price transparency in Inpatient Prospective Payment proposed rule

On April 24, 2018, the Centers for Medicare and Medicaid Services (CMS) released the proposed rule for the Hospital Inpatient Prospective Payment Systems (IPPS) for Acute Care Hospitals and Long Term Care Hospital Prospective Payment System (LTCH PPS) and Proposed Policy Changes and Fiscal Year 2019 Rates. The proposed rule would make updates to the payment rates for Medicare Part A services under the Inpatient Prospective Payment System, as well as rates for LTCHs paid under Medicare.

Under the proposed rule, the net increase of IPPS payments will be 3.4 percent, due in part to a 21.93 percent upward adjustment to disproportionate share hospital (DSH) payments for uncompensated care. CMS projects that LTCH PPS payments would decrease by approximately 0.1 percent in FY 2019, reflecting the continued phase-in of a dual payment rate system, which was recently extended through FY 2019 by the Bipartisan Budget Act of 2018.

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CMS releases ACA plans’ final Notice of Benefit and Payment Parameters for 2019

On April 9, 2018, the Centers for Medicare and Medicaid Services (CMS) released the final version of the annual Notice of Benefit and Payment Parameters (NBPP) for 2019. The NBPP provides the ground rules for the individual and small group health insurance markets for 2019, and is the main body of federal regulation for Exchange plans established by the Affordable Care Act.

Of particular note are provisions granting states additional flexibility to the definition of Essential Health Benefits (EHBs), and other new authorities for states regarding the certification of Qualified Health Plans (QHPs) for network adequacy. CMS stated that, “issuer exits and increasing premiums have threatened the stability of the individual and small group Exchanges” may best be addressed through greater state control over their insurance markets and to support innovative insurance models.

The NBPP is scheduled to be published in the Federal Register on April 17, 2018.

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CMS provides greater payment rate increase for Medicare Advantage, Part D plans for 2019

The Centers for Medicare and Medicaid Services (CMS) on April 2, 2018, released the final version of the 2019 Medicare Advantage (MA) Capitation Rates, combined with the MA and Part D Payment Policies and the Part D Call Letter. CMS followed up with the release of the final rule, Contract Year 2019 Policy and Technical Changes to the Medicare Advantage, Medicare Cost Plan, Medicare Fee-for-Service, the Medicare Prescription Drug Benefit Programs, and the Program for All-inclusive Care for the Elderly (PACE) on Friday, April 6, 2018.

The final rule is scheduled for publication in the Federal Register on April 16, 2018.

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CMS leaders report to Congress on MACRA implementation

On Wednesday, March 21, the House Ways and Means Committee held a hearing on the implementation of the Medicare Access and CHIP Reauthorization Act’s physician payment policies. The committee heard testimony from Demetrios Kouzoukas, Principal Deputy Administrator, and Dr. Kate Goodrich, the Chief Medical Officer for the Centers for Medicare and Medicaid Services (CMS).

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HHS Office of Inspector General flags MACRA vulnerabilities related to clinician awareness, program integrity

The Health & Human Services (HHS) Office of the Inspector General (OIG) in December 2017 released a report indicating that with regard to the implementation of the Medicare Access and CHIP Reauthorization Act (MACRA), the Centers for Medicare and Medicaid Services (CMS) continues to face vulnerabilities related to clinician awareness of MACRA’s Quality Payment Program (QPP) and program integrity to avoid fraud and improper Medicare Part B payment adjustments.

In a similar report from 2016, HHS OIG highlighted vulnerabilities related to providing guidance and technical assistance to clinicians and to developing information technology (IT) systems to support data reporting, scoring and Part B payment adjustments. HHS OIG found that CMS has made “significant efforts” to address these vulnerabilities.

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CMS releases part II of the 2019 Medicare Advantage and Part D Advance Notice and Draft Call Letter

The Centers for Medicare and Medicaid Services (CMS) on February 1, 2018, released the second part of the 2019 Medicare Advantage (MA) and Part D Advance Notice, and the Part D draft Call Letter, proposing average increases to MA payment rates for 2019 of 1.84% plus a potential further increase of 3.1% as a result of expected changes to risk scores for MA Plans.

The first part of the Call Letter was released on December 27, 2017, in compliance with provisions of the 21st Century Cures Act that require CMS to fully implement changes to the Medicare risk adjustment model by 2022.

Comments for both parts of the proposed Advance Notice and the Part D Call Letter are due to CMS by March 5, 2018. CMS expects to publish the final 2019 Rate Announcement and final Call Letter by April 2, 2018.

Highlights of key provisions of the advance notice and draft call letter are provided below.

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CMS issues guidance for states to seek Medicaid waivers including work requirements

On January 11, 2018, the Centers for Medicare and Medicaid Services (CMS) released a State Medicaid Director Letter that provides detailed guidance for states interested in establishing work or other community engagement requirements for certain adult beneficiaries to enroll in or continue coverage under their state’s Medicaid program under a waiver of Section 1115 of the Social Security Act.

CMS on Friday, January 12, 2018, approved Kentucky’s 1115 waiver including work requirements, making it the first of the 10 states seeking such waivers to win approval. At least one other state has expressed interest in such a waiver since CMS released the letter.

The Obama Administration rejected work requirements as part of state 1115 waiver applications, asserting that such requirements were not permitted under federal law. A number of advocacy organizations have said they will consider court challenges to block waivers including work requirements from taking effect.

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CMS announces new voluntary bundled payment model

On January 10, 2017, the Centers for Medicare and Medicaid Services (CMS) through the Center for Medicare and Medicaid Innovation (CMMI) announced a new Medicare bundled payment model, Bundled Payments for Care Improvement Advanced (BPCI-Advanced), which will be an advanced alternative payment model (AAPM) under the Medicare Access and CHIP Reauthorization Act’s (MACRA) Quality Payment Program (QPP). The model establishes alternative payment structures for 32 distinct clinical episodes, where providers can participate on a voluntary basis and receive performance-based payments for delivering care at less than a target amount and meeting quality standards.

Following on the 2013 CMMI BPCI initiative, BPCI-Advanced demonstrates CMS’ continued support of bundled payments on a voluntary basis to encourage both providers and suppliers to coordinate care across multiple settings and meet cost and quality benchmarks. This program is intended as an opportunity for providers to gain experience in care coordination and shared payment structures on their own terms. Details on BPCI-Advanced are described below.

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