Health Policy Report (9/9)

The Week Ahead

Congress is set to return to action today as lawmakers gear up for a high-profile legislative blitz to close out 2019. Government funding will be a top priority for legislators when both chambers gavel in as the Sept. 30 funding deadline looms. While the Senate Appropriations Committee plans to begin marking up measures next Thursday — tackling bills for Defense, Labor-HHS-Education, Energy-Water and State-Operations — it's likely that both chambers will need to pass a continuing resolution (CR) to extend funding beyond the Sept. 30 deadline, allowing negotiators to hammer out broader agreement that averts another potential government shutdown. House Majority Leader Steny Hoyer (D-MD) stated late last week that the House will vote on a stopgap funding bill during the week of Sept. 16.

Looking ahead to the broader agenda for this month, Congress will look to shepherd a host of must-pass priorities — including funding extensions for certain federally funded health programs and reauthorizations for the National Flood Insurance Program (NFIP), the Export-Import Bank, and National Defense Authorization Act (NDAA) — through both chambers prior to the end of this month. In the House, Democrats have indicated they will look to prioritize other hot-button issues on the floor this month such as gun control, lowering drug and health costs, reforming forced arbitration, and blocking offshore drilling. Meanwhile, Senate Republicans are expected to continue pushing for a vote on the United States-Mexico-Canada Agreement (USMCA) in hopes of clinching a legislative win for President Donald Trump ahead of the 2020 election. While the upper chamber could play ball on a bipartisan health care costs package, it’s expected that the Senate’s work will primarily focus on government funding and presidential nominations.

CMS Releases Anti-Fraud Rule for Medicare, Medicaid, and CHIP

Last Thursday, the Centers for Medicare and Medicaid Services (CMS) promulgated a final rule to add new program integrity requirements for health care providers and suppliers who participate in Medicare, Medicaid, or the Children’s Health Insurance Program (CHIP). The new requirements are intended to assist the agency with identifying health care providers who may pose a heightened risk of abuse. The sweeping program-integrity rule gives CMS the ability to block health care providers from participating in Medicare, Medicaid, or CHIP if they affiliate with entities that may bring fraud, waste, or abuse to these programs. CMS Administrator explained that the health agency has had to play “whack-a-mole” to try to track down criminals in the federal health care system and that the final rule would allow CMS to keep potential “fraudsters” from initially enrolling in the programs.

The anti-fraud rule will take effect on November 4 and will require providers and suppliers in federal health programs to report “any current or previous direct or indirect affiliation” with an organization that has uncollected debt, has previously been excluded from federal health care programs, or has been subject to similar sanctions. CMS may use the information to deny enrollment to the provider or supplier if the agency believes there is an undue risk of fraud, waste, or abuse. CMS will also base enrollment decisions on whether a provider or supplier: attempts to improperly re-enter the program under a new name or business identity; bills for services or items at a location it knew did not comply with Medicare enrollment requirements; has a pattern of unsafe or abusive ordering or certifying of services, items, or drugs; or, has outstanding debt to CMS from an overpayment that was referred to the Treasury Department. The rule gives CMS the authority to block fraudulent or problematic providers from re-entering Medicare for up to ten years — up from the current authority to ban up to three years.

CMS has estimated the rule will save the government $47 billion over ten years.

$70 Billion CVS-Aetna Merger Approved

U.S. District Judge Richard Leon formally approved CVS Health’s $70 Billion takeover of Aetna on Wednesday. Although the Justice Department approved the merger last year on the condition that the companies sell Aetna’s Medicare drug business in the interest of fair competition, the federal judge’s approval was the final hurdle for the deal between the health care companies. Every state also had previously signed off on the merger.

CVS noted in a statement that “CVS Health and Aetna have been one company since November 2018,” but the federal judge’s approval makes that “100 percent clear.” Federal Judge Leon initially ordered hearings after he said the Justice Department and the companies acted like his approval was a mere “rubber stamp,” and was upset that the companies had closed the deal just one month after reaching an agreement with federal regulators. The federal judge explained in his ruling that groups challenging the merger were unable to show that it would result in CVS gaining the ability to steer patients away from their current providers.

IRS Could Collect More Than $15.5 Billion in 2020 From Health Insurance Tax

The Internal Revenue Service released a guidance memo last Tuesday reporting that the federal government will collect more than $15.52 billion from most health insurers in 2020 if Congress fails to extend the existing suspension of the Affordable Care Act (ACA) health insurance tax. The predicted collection was calculated using a controversial revision to the premium growth methodology that the Centers for Medicare and Medicaid Services (CMS) finalized earlier this year and was the first year the amount was not defined by statute. The IRS’s revision to the premium growth methodology was opposed by most stakeholders, as well as — according to an internal memo — Administrator Seema Verma.

If congressional action on the tax does not occur, the IRS reported that insurers will be required to each pay a portion of the $15.52 billion fee based on market-share. The federal tax collection will be $200 million higher than it would have been if CMS had not altered the policy and bipartisan, bicameral legislation delaying the tax until 2022 has 124 House sponsors and 27 Senate sponsors. The Senate Finance Committee also has placed the insurance tax on a list of taxes that it hopes to tackle permanently by the end of the year. 

HHS Awards $1.8 Billion to States to Battle Opioid Epidemic

Last Wednesday, the federal government released $1.8 billion to states in support of efforts to fight the opioid epidemic. The latest round of funding to battle the opioid epidemic includes $932 million in state opioid response grants from the Substance Abuse and Mental Health Services Administration (SAMHSA), which were appropriated as part of last year’s opioid legislation package. Recipients of the SAMHSA grant money must ensure patients have access to medication-assisted treatment. Additionally, the Centers for Disease Control (CDC) will award $900 million over the next three states to 47 states, the District of Columbia, and two territories to implement and build out drug-use surveillance programs. The CDC will aim to shrink the lag time between the calculation of overprescribing, addiction and overdose rates, and finding an appropriate response through the programs. By the end of the year, the Department of Health and Human Services will have spent $9 billion in local and state grants to fight the opioid epidemic. HHS Secretary Alex Azar noted during the announcement that although the state grants focus on opioid addiction, they’re meant to assist states in building infrastructure they can use to manage the treatment of other addictions.