The Weekly Scan

November 16, 2018

Last Updated: 1:00 PM EST

Medicare & Medicaid

  • On Wednesday, CMS Administrator Seema Verma spoke on lowering prescription drug prices at the Biopharma Congress: “Drug pricing is a particularly acute issue for CMS. Combined, Medicare and Medicaid represent 40% of the U.S. drug market – we’re the largest purchaser of prescription drugs on the planet, and even if you just look at Medicare, it is clear that our spending is growing. In 2012, Medicare spent 17% of its total budget, or $109 billion, on prescription drugs. Four years later in 2016, this had increased to 23%, or $173 billion.  We’re talking about an increase of $64 billion in just four years.” Verma also introduced CMS' new IPI model. She explained: "The goal of the IPI model is to maintain financial stability for physicians – essentially to keep doctors whole, contrary to information being put out by some stakeholders. Instead of basing physician payment on the price of a drug, physicians would receive a fixed payment amount that could vary by physician specialty, physician practice, drug class, or some other variable." (CMS.gov)

 

  • CMS has achieved improper payment reductions in Medicare Fee-For-Service (FFS) Medicare Part C, Medicare Part D, Medicaid, and Children's Health Insurance Program, according to a fact sheet released by the agency yesterday. CMS has achieved these goals by implementing several initiatives to address improve payments. Of note, CMS called attention to the following statistics: "The 2018 Medicare FFS improper payment rate is 8.12%. This is the lowest Medicare FFS improper payment rate since 2010 and the second consecutive year that the Medicare FFS improper payment rate is below the 10% threshold for compliance established in the Improper Payments Elimination and Recovery Act of 2010. Due to the successes of CMS’ actions to address improper payments in home health and skilled nursing facility claims, CMS has achieved a decrease in the Medicare FFS improper payment rate from 9.51% in 2017 to 8.12% in FY 2018. This represents a $4.59 billion decrease in estimated improper payments from 2017 to 2018." (CMS.gov)

 

  • Another 3,815 people in Arkansas will be removed from Medicaid after failing to meet the state's work requirement, new state data shows, bringing the total to 12,000 people to fall off the program five months since the rule was put into place. Arkansas was the first state to require certain Medicaid enrollees work or train for work as a condition of staying enrolled in the program. People on Medicaid in Arkansas have to log their hours online, and if they fail to do so, they are taken out of the program and are not allowed to re-enroll until the following year. State officials said some people who didn't log their hours had moved to another state, obtained a job, or increased their salary and no longer qualified, while others had failed to either work, take classes, or volunteer or to log that they had done so. (WashingtonExaminer.com)

Litigation

  • Requiring a notice-and-comment period anytime the U.S. Department of Health and Human Services instructs its billing contractors on Medicare reimbursement policies would undermine the government’s ability to administer the program, HHS recently told the U.S. Supreme Court. The justices in September agreed to consider whether the Medicare Act requires notice-and-comment periods for so-called interpretive rules that instruct contractors on changes to Medicare reimbursement. These types of changes aren’t binding on HHS or the courts, meaning a formal rulemaking isn’t necessary, the agency said Tuesday in its opening brief. “It does not have the force and effect of law because neither the calculated Medicare fractions nor the contractors’ ultimate reimbursement determinations are binding on the agency or on the courts in subsequent review,” the brief states. (Law360.com)

 

  • The owner of two Detroit-area clinics was sentenced to 160 months in prison on Wednesday for her role in a scheme involving approximately $8.9 million in fraudulent Medicare claims for home health care and other physician services that were procured through the payment of kickbacks, were not medically necessary, were not actually provided, or were provided by an unlicensed physician. Jacklyn Price was sentenced by U.S. District Judge Robert Cleland of the Eastern District of Michigan. Judge Cleland also ordered Price to pay $6,350,332 in restitution, jointly and severally with her co-conspirators, and to forfeit the same amount. Price pleaded guilty in April 2017 to one count of conspiracy to commit health care fraud and one count of health care fraud. Price’s co-defendant, Millicent Traylor, M.D. was sentenced to serve 135 months in prison on Sept. 27; her co-defendant Muhammad Qazi was sentenced to serve 42 months in prison on Aug. 27; and her other co-defendant, Christina Kimbrough, M.D. was sentenced to serve 27 months in prison on Sept. 26. Qazi and Kimbrough each pleaded guilty to one count of conspiracy to commit health care fraud. Traylor was convicted in May 2018 of one count of conspiracy to commit health care fraud, one count of conspiracy to pay and receive health care kickbacks, and five counts of health care fraud following a four-day trial. (Justice.gov)

 

  • The Department of Justice announced yesterday that it has reached a settlement with Atrium Health, formerly known as Carolinas HealthCare System (“Atrium”). The settlement prohibits Atrium from using anticompetitive steering restrictions in contracts between commercial health insurers and its providers in the Charlotte, North Carolina metropolitan area. If approved by the Court, today’s settlement resolves over two years of civil antitrust litigation challenging Atrium’s use of steering restrictions that prevent health insurers from promoting innovative health benefit plans and more cost-effective healthcare services to consumers. In June 2016, the Department filed a civil antitrust lawsuit against Atrium challenging provisions that prohibit steering in the hospital system’s contracts with major health insurers. Steering is a method used by insurers to offer consumers options to reduce some of their healthcare expenses. As alleged in the complaint, insurers are increasingly designing health benefit plans that give patients financial incentives to choose more cost-effective hospitals and physicians. Increased consumer access to these health benefit plans invigorates competition between providers to offer lower premiums and better overall healthcare services. The Department alleged that Atrium, the dominant hospital system in the Charlotte area, used its market power to restrict health insurers from encouraging consumers to choose healthcare providers that offer better overall value. The restrictions also constrained insurers from providing consumers and employers with information regarding the cost and quality of alternative health benefit plans. (Justice.gov)

Legislation

  • On Tuesday, the Campaign for Sustainable Rx Pricing (CSRxP) launched its first ad in a six-figure, multi-phase campaign to "hold accountable the lawmakers who vowed to tackle out-of-control drug prices on the campaign trail." Lauren Aronson, CSRxP executive director, commented: “Out-of-control drug prices was a prominent issue on the campaign trail. With President Trump, Senate Majority Leader Mitch McConnell and the House Democratic Leader Nancy Pelosi all committed to addressing this issue in 2019, Members of Congress have a rare bipartisan opportunity to convert their campaign promises into substantive action. This campaign is a reminder to lawmakers that real people are counting on them to keep their commitments.” The campaign, entitled, “Commitment,” will run digital, television and print ads in the Beltway leading into the commencement of the new Congress. (CSRXP.org)

Affordable Care Act

  • In week two of the 2019 Open Enrollment, 804,556 people selected plans using the HealthCare.gov platform. Of that 804,556, 185,631 were new consumers, and 618,925 were renewing coverage. (CMS.gov)

Private Sector

  • athenahealth, Inc., a leading provider of network-enabled services for hospital and ambulatory customers nationwide, Veritas Capital and Evergreen Coast Capital, announced Monday that they have entered into a definitive agreement under which an affiliate of Veritas and Evergreen will acquire athenahealth for approximately $5.7 billion in cash. Under the terms of the agreement, athenahealth shareholders will receive $135 in cash per share. The transaction is expected to close in the first quarter of 2019. (athenahealth.com)

 

 

 

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