Health Policy Report

February 19, 2019

The Week in Review

The House (300-128) and Senate (83-16) overwhelmingly passed a compromise spending measure (textsummary) to avert a second partial government shutdown last week. The bill was signed by President Trump, who simultaneously issued a national emergency declaration in order to tap into Congressionally appropriated funds for additional border security spending, including: (1) $600 million from a Treasury forfeiture fund; (2) $2.5 billion from a Defense Department drug interdiction program; and (3) $3.5 billion from the military construction budget. The president’s move will likely face a challenge in Congress, as well as a tough battle in the courts, as Democrats prepare legislative and legal options to prevent the circumvention.

In addition to $1.375 billion in border security funding, the spending agreement will fund six outstanding appropriations bills through the end of this fiscal year, including: Agriculture; Commerce, Justice and Science; Financial Services and General Government; Interior and Environment; State and Foreign operations; and Transportation, Housing and Urban Development. It includes a boost of roughly $270 million to the Food and Drug Administration (FDA), as well as a $43.3 billion increase for the Federal Highway Administration. However, the deal reduces funding for several Department of Transportation projects and agencies, including cuts to infrastructure grants for state and local governments. Additionally, the deal does not include a provision that would provide backpay for federal contractors who were not paid during the last shutdown – nor does it include reauthorization for the Violence Against Women Act (VAWA) — despite bipartisan support for the measures.

Elsewhere on the floor, Senators cleared a comprehensive federal lands package (S.47) that would permanently reauthorize the Land and Water Conservation Fund (LWCF). The Natural Resources Management Act — which includes a host of provisions that would increase recreational access to federal lands and add to national parks and other land holdings — is likely to be taken up in the House where it enjoys bipartisan support. The upper chamber also cleared the nomination of William Barr to be Attorney General of the United States.

The Week Ahead

Both chambers of Congress have left Washington for a President’s Day district work week. Lawmakers will resume legislative business on Monday, Feb. 25.

Government Funding Deal Includes Increase for FDA

The government spending package signed by President Trump on Friday included one of the largest funding increases for the Food & Drug Administration (FDA) in years. The $269 million increase will give the FDA just under a nine percent raise in funding, according to the Alliance for a Stronger FDA. Per an explanatory document released by the office of House Appropriations Chair Nita Lowey (D-NY), $13.8 million of the FDA funding hike will go to food safety activities, while $257.6 million will go to medical product safety. Although these numbers add up to $271.4 million, lawmakers anticipate $2.8 million in proposed savings, leaving FDA with a net increase of $268.6 million, the document says. The funding bill devoted approximately $3 billion in discretionary funding for the health agency. 

The Alliance for a Stronger FDA explained that the funding increase demonstrates a strong commitment from Congress to the FDA, and was $35 million above the “mid-line” of negotiations between the House and Senate spending bills. They noted that the bill will provide the agency with needed stability to invest in long-term planning, new programs and hiring efforts.

ONC Releases Proposal to Facilitate Patient Access to Electronic Health Information

The Office of the National Coordinator for Health Information Technology (ONC) released a long-awaited proposed rule last Monday which would, among other actions, implement the interoperability and information blocking provisions of the 21st Century Cures Act. The proposed rule takes steps to ensure patients have secure electronic access to their health information and that this be made available at no cost. ONC stated that giving patients and providers secure access to health information will increase innovation and competition, and allow for more choice in care and treatment. The rule also calls on the healthcare industry to adopt standardized application programming interfaces (APIs), which will allow individuals to securely and easily access structured EHI using smartphone applications. The rule was issued alongside additional proposals from the Centers for Medicare and Medicaid Services (CMS), which aims to hold Medicare, Medicaid, and CHIP providers accountable for limiting access to health information.

The proposed rule is part of a larger push by the Department of Health & Human Services (HHS) to support seamless and secure access, exchange, and use of EHI. In recent months, ONC has faced significant pressure from Congress and stakeholders to release the proposal so that policymakers can determine if new legislative efforts are needed. Last month the Government Accountability Office (GAO) issued a Cures Act-mandated report on the topic of information blocking, but offered little in the way of recommendations to federal policymakers. The Department of Health and Human Services (HHS) explained that the two proposed rules address technical and health industry factors that cause barriers to interoperability and limit the ability of patients to access essential health information.

ONC, along with numerous other HHS officials, presented at the annual Health Information and Management Systems Society (HIMSS) conference last week, and spent much of their time explaining the rule and fielding initial questions from the broad range of policymakers and stakeholders attending the conference. Once published in the Federal Register, the public will have 60 days to comment on the proposals and additional requests for information. 

CMS Proposes Blue Button 2.0-like API for Private Plans

Last Monday, the Centers for Medicare and Medicaid Services (CMS) proposed major new requirements for health insurers to provide patients with electronic access to their health data. CMS will require Medicare Advantage (MA) plan issuers, Medicaid and CHIP programs, Medicaid and CHIP managed care organizations, and qualified health plan (QHP) issuers to develop and maintain an application programming interface (API) to make patient data available via third-party products. By making patient data accessible across payers, CMS hoped to improve care coordination, reduce unnecessary procedures and testing, and give medical professionals a fuller view of the patients they serve.

While Last Monday’s proposals would establish a new framework for interoperability of different payers’ systems and data, CMS acted with more caution than it had previously hinted at. CMS is proposing to revise the conditions of participation (CoPs) for Medicare and Medicaid by requiring hospitals — including critical access hospitals (CAH) — to provide electronic patient event notifications to other providers, such as post-acute care (PAC) providers. The agency said that commenters on the 2019 Inpatient Prospective Payment System (IPPS) Request for Information (RFI) expressed apprehension at changing hospital CoPs to promote interoperability, citing added burdens on hospitals. CMS proposed a change to the CoPs but did not require hospitals to share information beyond basic patient event data, and hospitals that do not have EHR systems that are capable of sharing patient event data were exempted.

CMS also requested information on how to move forward on a number of issues in last Monday’s proposal. The agency asked for input on how best to proceed in promoting interoperability across different care settings, particularly PAC, and how to improve patient matching, the process by which a comprehensive patient record is built from disparate records from multiple providers. Additionally, CMS is seeking comment on the possibility of providers directly requesting information from payers on their shared patients via the proposed open API rather than using a HIPAA-compliant third-party application.  

As this rule has not yet been published in the Federal Register, CMS has declined to give an exact comment period end date, though stakeholders will have until early April to review the rule and submit comments. Stakeholders should watch for future rulemaking that would require facilities to be able to receive hospitals’ patient event notifications, perhaps by aligning requirements for their systems with the Trusted Exchange Framework and Common Agreement (TEFCA). CMS stated in the rule that it anticipates issuing rulemaking on this topic in the future.

CMS Announces Payment Model to Expand Options for Ambulances

Last Wednesday, the Centers for Medicare and Medicaid Services (CMS) released a payment model through the Center for Medicare and Medicaid Innovation (CMMI) that would overhaul emergency medical transportation. The five-year model, called ET3, would expand the categories of care settings to which ambulances can transport patients and be eligible for Medicare reimbursement. CMS developed the model in response to concerns that care settings other than hospital emergency departments may be more appropriate for individuals who require emergency transport and to free up valuable emergency transport resources to higher-acuity patients. The new model is indicative of the thinking HHS hopes to encourage when it comes to how and where patients receive health care. It also signalled a commitment to addressing misaligned incentives, which are expected to be a significant focus as CMMI rolls out more models this year.

Under current regulation, Medicare typically only pays for unscheduled ambulance services to take patients to hospital emergency departments. However, under some circumstances, other treatments may be more appropriate. Transportation providers avoid taking patients to alternative locations as they would not receive reimbursement for services from Medicare. This model would provide for two alternative ambulance payments: (1) payment for on-the-scene treatment or qualified telehealth services where the patient is, and (2) payment for unscheduled transportation to alternative destinations such as primary care providers or urgent care clinics, as appropriate. Providers may triage Medicare beneficiaries to an alternative care setting upon ambulance dispatch. These new payments would be accompanied by a value incentive strategy, in which participating providers would earn up to a five percent payment adjustment based on quality measures. The model will apply to Medicare fee-for-service beneficiaries.

CMS plans to start accepting applications in Summer 2019, and it will accept applications in multiple rounds. The agency hopes to attract applicants from throughout the country and will offer staggered performance start dates. Once provider participants have been announced, CMS will offer funding to up to 40 entities that run 911 dispatches in communities where providers have been selected to participate.

CMS Reorganization Centralizes Medicaid and CHIP Policy and Operations

Last Wednesday, the Centers for Medicare and Medicaid Services (CMS) announced the merger of two of its groups that administer the Medicaid and CHIP programs. The Consortium for Medicaid and Children’s Health Operations (CMCHO) and the Center for Medicaid and CHIP Services (CMCS) will be consolidated, bringing CMCHO’s functions under the umbrella of CMCS. In its notice, CMS says that the reorganization will spur consistent policy implementation and improve communication between the states and the federal government. Although the CMCHO’s regional office staff will continue to be located in its ten offices, they will report to CMCS and be combined into four regional Medicaid Field Operations Divisions. CMS also created the Regional Management Office (RMO) under CMCS to take up the work with states that was undertaken by CMCHO, and CMS also created a new Division of Health Information Technology for Economic and Clinical Health and Medicaid Management Information System.

CMCHO served as the representative of CMS in the field, interacting with state and local governments and facilitating the administration of state Medicaid programs. CMS noted that the functions of CMCHO and CMCS, which is the federal division responsible for Medicaid and CHIP, were closely related. CMCHO’s key activities included supporting program transparency, fiscal oversight, and technical assistance, and CMCS will now take up those responsibilities. CMCHO also reviewed draft State Plan Amendments (SPAs). The goals of the reorganization appear to be aimed at addressing concerns from some states regarding their interactions with regional offices, including inefficient processes as well as inconsistent application of federal policy across the states.

CMS stated that Medicaid programs will not see a change in how they interact with federal Medicaid officials and will continue to work with Associate Regional Administrators and their teams, however, those administrators will report directly to CMCS. The agency called the shift a step towards internal alignment and integration of closely related functions that were previously housed separately, and it emphasized “consistency and accountability” in how CMS will work with states going forward. Bringing regional operations under the umbrella of CMCS is intended to increase oversight on the regional offices and improve the federal government’s ability to consistently apply laws and regulations across the states.