MHA Today | February 1, 2019   

February 1, 2019
MHA Today: News for Healthcare Leaders

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MHA Today is provided as a service to members of the Missouri Hospital Association. Additional information is available online at MHAnet.


Herb Kuhn, MHA President & CEO It’s been a pretty bad week for pharmaceutical companies. Early this week, congressional committees held hearings on the high price of prescription drugs, and castigated pharmaceutical companies — and their leaders, who failed to show — for pricing policies that literally put lives in jeopardy. At the same time, the Trump administration was delivering a regulatory right-hook.

From orphan drugs to EpiPens — and as this week’s testimony spotlighted, insulin — pharmaceutical industry profiteering is drawing more than just scrutiny and negative attention. The administration and Congress are taking action with regulatory and legislative solutions. Although pressure has been building to address pharmaceutical pricing for some time, drug company price-setting for 2019 is occurring at the same time as a new Congress is setting its agenda and the administration has clarified its thinking on an approach to the price problem.

Big-pharma’s tin ear on pricing, as well as historical policy resulting in low transparency, a convoluted supply chain, the inability of Medicare and Medicaid to leverage their power in the system to negotiate price, and the resulting public outcry have generated significant energy for action. Kaiser Family Foundation polling revealed that 78 percent of survey participants believe a major reason that people’s health care costs have been rising is that “drug companies make too much money.”

The industry’s lack of self-awareness isn’t the biggest problem — it is just a symptom. The problem is the lack of a pressure from the marketplace or regulatory constraints that could clarify price targets and curtail bad behavior.

As with the EpiPen before it, insulin price raising — or some would say gouging — only increases public skepticism and generates energy for legislative fixes. However, this isn’t just bad news for pharmaceutical manufacturers, but their entire supply chain. Three of Health and Human Services Secretary Alex Azar’s four priorities — increase drug market competition, move to value-based payment models, and increase price and quality transparency — could shape the future of the pharmaceutical industry. Earlier this week, Azar released draft rules to allow drug manufacturers to offer discounted prices directly to consumers at the pharmacy counter and prohibit rebates to pharmacy benefit managers. This follows his earlier suggestions that HHS link Medicare payments to drug prices in other countries.

Congress isn’t sitting on its hands. Chuck Grassley, (R-Iowa), Chairman of the Senate Finance Committee indicated that the committee will likely investigate large price increases for long-used drugs such as insulin. Grassley favors requiring drugmakers to disclose list prices in television advertising and has co-sponsored the CREATES Act, which would make it harder to block generic competition. House Oversight and Reform Committee Chairman Elijah Cummings, (D-Md.), held a similar hearing on pharmaceutical pricing this week.

While this was going on, a draft of separate legislation to address drug pricing and value was released. According to reports, the Patient Affordability, Value and Efficiency Act would link prescription drug and medical device pricing to the clinical effectiveness of products. It also would create carve-outs for new payment models similar to those in place for other value-based care systems.

Although presently on hold, price setting and importation of pharmaceuticals from other countries remain a strong lever in negotiations, if not a strategy if the industry blocks other action. However, those alternatives could stifle innovation and expose patients to less regulated drug production systems. Better alternatives certainly will materialize.

At this point, it is hard to guess what Congress will do. And, it’s hard to rule out the power of the pharmaceutical industry to block meaningful change, despite the public outcry.

Advances in pharmacy have transformed care and extended lives. Nonetheless, the industry’s generations of goodwill could evaporate if drugs as basic as insulin can’t be delivered at a price diabetics can afford.

There isn’t a breakthrough drug available for tin ear. If it doesn’t heal itself, Congress and the administration are likely to offer a treatment plan.

Send me a note to let me know what you’re thinking.

Herb Kuhn, MHA President & CEO

Herb B. Kuhn
MHA President and CEO

In This Issue
HHS Updates Federal Poverty Guidelines
CMS Proposes To Lower Drug Costs By Eliminating Anti-Kickback Drug Rebate Safe Harbor
CMS Releases Medicare Advantage And Part D Advance Notice
MLN Connects Provider eNews Available
Missouri Escalates Flu Query Surveillance, National ILI Activity Increases
CMS Announces IQR Education Session

Regulatory News
the latest actions of agencies monitoring health care

HHS Updates Federal Poverty Guidelines

Staff Contact: Daniel Landon

The U.S. Department of Health and Human Services has updated for 2019 the income levels that define federal poverty. The standard varies by family size. Referenced as the federal poverty guidelines, the data is a benchmark to determine eligibility for a wide variety of federal public assistance programs, including Medicaid.

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CMS Proposes To Lower Drug Costs By Eliminating Anti-Kickback Drug Rebate Safe Harbor

Staff Contact: Andrew Wheeler

The Centers for Medicare & Medicaid Services released a proposed rule that amends the safe harbor regulation concerning drug discounts. Drug rebates are currently exempted from the anti-kickback statute, allowing drug rebates to be paid by drug manufacturers to middlemen or insurance plans providing coverage through Medicare’s Part D or Medicaid drug programs. Under the new proposal, the safe harbor exemption would be eliminated. The proposal also would create a new safe harbor to protect direct discounts to patients. MHA has published an issue brief with additional details.

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CMS Releases Medicare Advantage And Part D Advance Notice

Staff Contact: Andrew Wheeler

The Centers for Medicare & Medicaid Services released the second part of the 2020 Advance Notice of Methodological Changes for Medicare Advantage capitation rates and Part D payment policies, and draft call letter. The net payment impact for the proposed updates is projected to be 1.59 percent. CMS states that the proposed changes continue “the agency’s efforts to maximize competition among Medicare Advantage and part D plans.” CMS Administrator Seema Verma stated “CMS is committed to modernizing Medicare and our top priority is to ensure that seniors have more choices and affordable options in receiving their Medicare benefits.” MHA has published an issue brief with additional details.

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MLN Connects Provider eNews Available

Staff Contact: Andrew Wheeler

Updates to MLN Connects Provider eNews were issued by the Centers for Medicare & Medicaid Services. eNews includes information about national provider calls, meetings, events, announcements and other MLN educational product updates. The latest issue provides updates and summaries of the following.

  • Physicians and nonphysician practitioners: new Medicare enrollment application
  • New app displays what Original Medicare covers
  • Cochlear devices replaced without cost: bill correctly – reminder
  • New Medicare card open door forum – Wednesday, Feb. 6
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Quality and Population Health

Missouri Escalates Flu Query Surveillance, National ILI Activity Increases

Staff Contact: Jaclyn Gatz or Carissa Van Hunnik

Missouri Flu Activity 2015-2019According to the Missouri Department of Health and Senior Services Weekly Influenza Surveillance Report, Missouri’s flu activity increased to widespread for the week ending Jan. 26. Influenza-like illness activity was above baseline for the Missouri Outpatient ILI Surveillance Network and for the hospital emergency room visit chief complaint data reported through ESSENCE.

Per MHA's Flu Monitoring Guidance, the latest DHSS report indicating an increase to widespread flu activity in Missouri will trigger the activation of our Enhanced Flu Query. These enhanced queries request additional information related to flu surge indicators used to identify potential impacts to hospital resources, bed availability and staffing levels. As ILI activity continues to rise nationally, hospital staff are strongly encouraged to respond to these weekly queries with accurate and timely information. The next scheduled query will be activated, Thursday, Feb. 7, from 10 a.m. to 2 p.m. Additional details related to these queries, including weekly data summaries, are available in the EMResource library.

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CMS Announces IQR Education Session

Staff Contact: Sherry Buschjost

An outreach and education session for hospitals participating in the Inpatient Quality Reporting Program is scheduled at 1 p.m. Thursday, Feb. 7. The presentation will share information regarding the Centers for Medicare & Medicaid Services Hospital IQR Program chart-abstracted data validation process for fiscal year 2021. Registration is required.

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Did You Miss An Issue Of MHA Today?

January 28, 2019
Emergency Physicians Make Out-of-Network Billing Recommendations
HIDI HealthStats – Predicting Opioid Risk in Hospital Patients
HIDI Releases Fourth Quarter FFY 2018 Inpatient, Outpatient, Databases
CMS Seeks Comments On Follow-Up After Psychiatric Hospitalization Measure
CDC Reschedules Influenza COCA Call

January 29, 2019
Medicare App Displays Covered Medical Items And Services
Medicare Part D Enrollees Face High Out-Of-Pocket Drug Costs
CMS Updates EHR Known Issues Document

January 30, 2019
Legislative Committee Reviews Short-Term Insurance Expansion
State Legislators Review PDMP Legislation
Legislators Push Back On Governor’s Workforce Proposal
State Legislation Tweaks Surprise Billing Law
CMS Updates eCQI Resource Center

January 31, 2019
MHD Publishes Final Pharmacy Reimbursement Rule
Trump Administration Mulls Changes To Stark/Anti-Kickback Regulations
CVS Caremark Delays 340B Payment Cuts
VA Alters Standards For Coverage Of Treatment By Community Providers
Telehealth Conference Reviews Challenges And Opportunities
MHA Staff Attend CMS Quality Conference

Consider This ...

The price of insulin tripled between 2002 and 2013, and nearly doubled between 2012 and 2016. The three big insulin companies also control 99 percent of the world's supply.

Source: The Hill