Administration releases final rule to expand short-term limited duration insurance

On August 1, 2018, the Department of the Treasury, the Department of Labor, and the Department of Health and Human Services (“the Departments”) released a final rule amending the definition of short-term, limited duration (STLD) insurance. Notably, the final rule lengthens the maximum period of STLD coverage, allowing policy durations of up to 12 months, and options to renew policies for up to 36 months. This change is a departure from the current 2016 rule that strictly limits STLD coverage to less than three months.

The final rule is set be published in the Federal Register on August 3, 2018, with the rule taking effect on October 4, 2018.

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MEDICAID NEWS: CMS approves first state Medicaid plan aimed at value-based purchasing of prescription drugs, rejects application for formulary restrictions; court blocks approval of Kentucky Medicaid waiver for work requirements

On June 27, 2018, the Centers for Medicare and Medicaid Services (CMS) approved a Medicaid State Plan Amendment (SPA) allowing Oklahoma to negotiate with drug manufacturers for supplemental rebates under value-based purchasing agreements. Other states have won approval for Supplemental Rebate Agreements (SRAs), but Oklahoma’s SPA is the first specifically to provide for additional rebates to be made to the state if a prescription drug falls short of negotiated clinical benchmarks.

Products covered under an SRA with Oklahoma will have preferred status on the state’s Medicaid formulary and may be placed on lower tiers of the state’s drug listings, granting exemptions to utilization management policies such as prior authorization. The updated agreement applies to drugs dispensed effective January 1, 2019.

Drugs developed and marketed by manufacturers who do not participate in the supplemental rebate program will still be available to Medicaid recipients.
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The administration’s blueprint to lower drug prices and reduce consumer costs is likely to be a complicated game of Risk

This article originally ran in the Deloitte Center for Health Solution’s Health Care Current. Click here to subscribe.

Remember the game of Risk? My older brother and his friends used to play it for days—much to my annoyance because I didn’t understand it and wasn’t allowed to play with them. Multiple players sit around a board game making strategic moves that are part diplomacy and part conquest. The game is based on some fairly simple rules, but it incorporates a lot of complex interactions. Setting and negotiating drug prices has always reminded me of a complicated board game where multiple players make strategic moves to reach the end of the game—and patients, much like me as a little sister, do not understand and can’t play the game.

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In response to proposals for new payment models, HHS declines to advance any for future testing

On June 13, 2018, the Department of Health and Human Services (HHS) released responses by Department of Health and Human Services Secretary Alex Azar to the comments and recommendations of the Physician-Focused Payment Model Technical Advisory Committee (PTAC) on a dozen proposals for physician-focused payment models (PFPMs) reviewed by the committee, and sent to HHS between October 2017 and May 2018. HHS did not accept any of the proposals for broader implementation.

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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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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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Proposed rule sets stage to expand availability of association health plans; HHS seeks comment on choice, competition in health care markets

On January 4, 2018, the Department of Labor issued a proposed rule outlining changes to the definition of “employer” under the Employee Retirement Income Security Act (ERISA) in an effort to make association health plans (AHPs) more broadly available to small employers and their employees. In doing so, the proposed rule would lay the groundwork for more small employers and their employees to join AHPs, which generally are considered large group health plans and are not subject to insurance market requirements for small group and non-group health insurance products that were enacted as part of the Affordable Care Act (ACA). Examples of such insurance market reforms include the essential health benefits (EHB) package.

ERISA is the 1974 federal law that generally regulates health coverage offered by large employers and pre-empts state insurance requirements for self-funded coverage.

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Health care looms over final months of 2017 legislative, regulatory agenda; Latest executive order could kick off period of heavy regulatory activity

Repeal and replace of the Affordable Care Act (ACA) has dominated the headlines for much of 2017, but the expiration of the fiscal year 2017 budget resolution on September 30, 2017, has functionally moved that effort off the top-tier of near-term legislative priorities. That said, health care legislation remains on the congressional agenda this year, and a host of regulations are due to be released before December 31, 2017.

These legislative and regulatory developments will have a significant impact on the health care industry and should be taken into account by health care providers, health plans, health information technology firms, investors and other industry stakeholders as they evaluate their strategies and plan for 2018 and the years ahead.

Below are select highlights of the health care legislative and regulatory agenda for the remainder of 2017.

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CMS proposes to scale back scope of bundled payment model for joint replacement, cancel other mandatory bundled payment models

The Centers for Medicare and Medicaid Services (CMS) on Thursday, August 17, 2017, published a proposed rule that would reduce the number of geographic areas where hospitals and clinicians would be required to participate in the Comprehensive Care for Joint Replacement (CJR) bundled payment model focused on knee and hip replacements, and cancel cardiac and other orthopedic bundled payment models that are scheduled to begin on January 1, 2018.

As a member of Congress and in his confirmation hearings as Secretary of the Department of Health and Human Services (HHS), Secretary Tom Price raised concerns about regulations issued by the Obama Administration to test the orthopedic and cardiac bundles payment models in so many geographic areas on a mandatory basis.

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