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Federal Regulatory, Legislative and Reimbursement Report – May-June 2015


  • CMS Announces New Initiative To Promote Value-Based Home Health Care
    • The Centers for Medicare and Medicaid Services (CMS) released the Home Health (HH) Prospective Payment System Rate Update, HH Value-Based Purchasing Model, and HH Quality Reporting Requirement proposed rule. Information on the proposed rule is available here through CMS.
    • For more, click here.
  • CMS Cutting-Edge Technology Identifies & Prevents $820 Million In Improper Medicare Payments In First Three Years
    • After three years of operations, the Centers for Medicare & Medicaid Services (CMS) reported that the agency’s advanced analytics system, called the Fraud Prevention System, identified or prevented $820 million in inappropriate payments in the program’s first three years. The Fraud Prevention System uses predictive analytics to identify troublesome billing patterns and outlier claims for action, similar to systems used by credit card companies. The Fraud Prevention System identified or prevented $454 million in Calendar Year 2014 alone, a 10 to 1 return on investment.
    • For more, click here.
  • CMS Proposes Rule To Strengthen Managed Care For Medicaid And CHIP Enrollees
    • The Centers for Medicare & Medicaid Services (CMS) proposed to modernize Medicaid and Children’s Health Insurance Program (CHIP) managed care regulations to update the programs’ rules and strengthen the delivery of quality care for beneficiaries. This proposed rule is the first major update to Medicaid and CHIP managed care regulations in more than a decade. It would improve beneficiary communications and access, provide new program integrity tools, support state efforts to deliver higher quality care in a cost-effective way, and better align Medicaid and CHIP managed care rules and practices with other sources of health insurance coverage.  Overall, this proposed rule supports the agency’s mission of better care, smarter spending, and healthier people.
    • For more, click here.
  • CMS Releases First Round of Home Health Compare Quality of Patient Care Star Ratings
    • The Centers for Medicare & Medicaid Services (CMS) for the first time published star ratings on Home Health Compare, CMS’s public information website for Home Health Agencies. Star ratings can help consumers more quickly identify differences in quality and make use of the information when selecting a health care provider. In addition to summarizing certain data about Home Health Agency performance for consumers, star ratings can also help the agencies identify areas for improvement.
    • For more, click here.
  • CMS publishes redraft of SNF Regulations
    • CMS published a major re-draft of the nursing home conditions of participation intended to bring the standards up to date, noting that the last major update to the regulations occurred in 1991.
    • The new proposal anticipates a more active role for pharmacy in improving quality and efficiency. CMS will add additional requirements for pharmacist oversight of drug regimens and infection control, adding a new emphasis on antibiotic stewardship. See proposed rule here and more in the Regulatory Section under CMS.
  • CMS Issues Interim Final Rule on Pharmacist Prescriber Issue
    • Several states have laws allowing pharmacists to prescribe certain drugs under certain circumstances, but not all Medicare Part D plans have recognized the validity of a pharmacist prescription and have denied payment for these claims.
    • CMS published an interim final rule with comment period on May 6th in the Federal Register that would require drug plans to honor pharmacist prescriptions. The rule goes on to require plans to provide provisional coverage for drugs when the prescriber is discovered to not be enrolled as a Medicare Part D provider.
    • The provisions of this rule are effective on June 1, and the comment period extends to July 6.
  • CMS Issues Guidance on Medicare Managed Care To States
    • CMS published a guidance document for states on how the agency will evaluate contracts with Medicaid Managed Care plans. This comes in advance of expected rulemaking on Medicaid Managed Care, where a substantial overhaul of the standards is expected.
  • Reading the Stars: Nursing Home Quality Star Ratings, Nationally and by State
    • About 1.3 million people receive care each day in over 15,500 nursing homes in the United States that are certified by either Medicaid or Medicare or both. The federal government requires nursing homes to meet minimum standards as a condition of Medicare and Medicaid payment. Over the years, serious concerns have been raised about the quality of nursing home care and the adequacy of oversight and enforcement. Nursing home provisions in the Omnibus Budget Reconciliation Act of 1987 (OBRA 87) were enacted to help address these concerns. Nonetheless, reports of quality problems in nursing homes persist, such as low staffing levels, new pressure ulcers (bedsores), and documented fire hazards. These are serious issues given the frailty and vulnerability of nursing home residents.
    • For more, click here.
  • CMS Proposes Medicaid Managed Care Rule
    • CMS published a long-awaited proposed rule for Medicaid Managed Care on June 1st in the Federal Register. The proposal represents the first major update of managed care regulations in Medicaid in more than a decade.
    • CMS has a special focus on long term supports and services (LTSS), as well as managed LTSS. Comments on the proposed rule are due by July 27.
  • Affordable Care Act payment model saves more than $25 million in first performance year
    • The Centers for Medicare & Medicaid Services (CMS) announced positive and promising results from the first performance year of the Independence at Home Demonstration, including both higher quality care and lower Medicare expenditures.

Legislative Update

  • House Passes 21st Century Cures
    • The House of Representatives passed the 21st Century Cures Act by a vote of 344-77, sending the legislation to the Senate for consideration, where it will be reviewed by the Senate Committee on Health, Education, Labor and Pensions (HELP).
    • The version passed by the House features a toned-down pharmacy lock-in provision for controlled substances for beneficiaries at risk for narcotic abuse. This version exempts residents of long term care facilities and other groups as determined by the HHS Secretary.
    • The Senate is not expected to act on the bill until later this year, following the August recess.
  • Senate Finance Committee Approves Several Healthcare Bills
    • On June 24, the Senate Finance Committee approved a dozen healthcare bills, among them:
      • S 704: The Community-based Independence for Seniors Act
      • 1349: Notice of Observation Treatment and Implication for Care Eligibility Act or the NOTICE Act
      • S 1362: To amend title XI of the Social Security Act to clarify waiver authority regarding programs of all-inclusive care for the elderly
      • S 861: Preventing and Reducing Improper Medicare and Medicaid Expenditures Act of 2015 or the PRIME Act of 2015
    • These bills are now eligible for further action by the Senate.


  • Serious Risks And Few New Benefits From FDA-Approved Drugs
    • A recent “Health Affairs” article calls attention to the potential risks of prescribing medication to patients. The article points out that many drugs currently on the market have serious, and sometimes fatal side effects that are often overlooked by prescribers. While the author calls upon the Food and Drug Administration’s (FDA) process of approving drugs for better oversight, pointing out that approximately 90% of drugs approved by the FDA have no significant advantages over similar drugs already on the market in terms of safety, the author overlooks the significant role a pharmacist can plan in coordinating care. The author calls for the FDA to issue clearer warnings to the public, as well as to prescribers about these potential risks associated with each drug, but neglects to address these risks in the context of a coordinated care model.
    • Click here for the full article.
  • Docs Fight For Right To Compound Drugs
    • Following the 2012 scandal involving 64 patients who died and another 750 who became ill with fungal meningitis traced to unsterile conditions in a New England compounding pharmacy, the US Food and Drug Administration has been given new powers to enforce safety issues related to that practice. But at the American Medical Association’s annual House of Delegates (HOD) meeting in Chicago June 7, physicians from several medical specialties urged the AMA to lobby for regulations safe-guarding their own right to compound drugs in their offices. Those who spoke included dermatologists, ophthalmologists, infectious disease doctors, and oncologists.
    • For more, click here.
  • FDA Again Delays Drug ‘Track And Trace’ Enforcement
    • The Food and Drug Administration is giving pharmacies another four months before they’re penalized if they can’t document the chain of custody for the drugs they dispense. The requirement was adopted under a 2013 law passed in response to a meningitis outbreak traced to a compounding pharmacy.
    • The agency previously intended to begin enforcing the policy July 1 for all businesses involved in the prescription drug supply chain. The policy is intended to speed the ability to find harmful products and remove them from the supply chain.
    • It is important to note that the rules related to capturing and maintain transaction data, still went into effect on July 1. In a joint letter submitted to FDA on June 22nd, APhA, NASPA (the National Alliance of State Pharmacy Associations) and NCPA requested a delay of enforcement of a July 1 product tracing deadline for dispensers to help avoid any potential disruptions in the pharmaceutical supply. Click here to read the joint letter.
    • For more, click here.
  • FDA Issues Final Rule On Drug Shortage Notification Requirements
    • The Food and Drug Administration today issued a final rule requiring all manufacturers of certain medically important prescription drugs to notify the agency of permanent discontinuances or temporary interruptions in manufacturing that are likely to disrupt the supply of the product in the United States. Required by the Food and Drug Administration Safety and Innovation Act of 2012, the rule also would extend the early notification requirement to medically important biologic products. In comments on the proposed rule, AHA said the requirement would allow FDA to communicate more and better information to patients, hospitals and physicians.
  • LTC Companies and Organizations Submit Comments to FDA on Repackaging
    • Ten long term care companies and organizations filed comments to FDA’s proposed guidance document on repackaging. The draft guidance was published on February 19, 2015 and comments were due by May 20.
    • The focus of the comments was FDA’s lack of accommodation for the special needs of institutional pharmacies (long term care and correctional facilities).

Office of Inspector General

  • Automated Compounding Enhances Safety And Regulatory Compliance
    • Several recent events point to glaring problems in ensuring the safety of compounded sterile preparations (CSPs)—problems that technology might be able to solve.
    • In January, the Department of Health and Human Services’ Office of Inspector General (OIG) issued a report about hospitals’ use of stand-alone compounding pharmacies for CSPs. The study was spurred by concerns about the quality of CSPs after the 2012 meningitis outbreak and deaths caused by contaminated injections from the New England Compounding Center (NECC), an independent compounding pharmacy.
    • For more, click here.

Health Insurance

  • Survey Finds Americans Underinsured
    • One-quarter of people with healthcare coverage are paying so much for deductibles and out-of-pocket expenses that they are considered underinsured, according to a new study.
    • An estimated 31 million insured people are not adequately protected against high medical costs, a figure that has doubled since 2003, according to the 2014 national health insurance survey by the Commonwealth Fund.
    • For more, click here.


  • Survey Finds Americans Underinsured
    • One-quarter of people with healthcare coverage are paying so much for deductibles and out-of-pocket expenses that they are considered underinsured, according to a new study.
    • An estimated 31 million insured people are not adequately protected against high medical costs, a figure that has doubled since 2003, according to the 2014 national health insurance survey by the Commonwealth Fund.
    • For more, click here.

Drug Supply Chain

  • NCPA Releases Fact Sheet for DSCSA Compliance Prior to July 1 Deadline
    • NCPA has released a fact sheet outlining the implications of the Drug Supply Chain Security Act that was signed into law in 2013. The fact sheet comes as the July 1 deadline approaches that “requires dispensers to pass, capture and maintain certain types of information with respect to each transaction (or change in ownership).” That information includes:
      • Transaction Information (TI): name of product, strength and dosage form, NDC, container size, shipment date and name and address of sender and recipient
      • Transaction History (TH): a list of all prior transactions
      • Transaction Statement (TS): an attestation by the prior business that is transferring ownership that they have complied with the Act.
    • If pharmacies are planning on having their wholesaler store this information, they will need to have written agreements in place by the July 1 deadline. View the full fact sheet here.

Health Information Technology

  • Senate Committee, Stakeholders Look to Address Health IT Issues
    • During a Senate Health, Education, Labor and Pensions Committee hearing, senators and stakeholders discussed issues regarding Stage 3 of the meaningful use program, barriers to interoperability and patients’ access to data.
  • Health IT Could Curb Prescription Drug Abuse, but Adoption Lags
    • If health technology is ever going to achieve the goal of lowering the rates of prescription drug abuse, developers and policy makers will have to do more to encourage adoption of electronic prescribing systems among healthcare providers.
    • Click here for more.
  • North Carolina Moves To Allow Prescriptions By Telemedicine
    • In a move to allow telemedicine, the North Carolina Board of Pharmacy is proposing to amend 21 NCAC 46.1801, which prevents a pharmacist, except in certain incidents, from dispensing prescriptions if the pharmacist has no knowledge that the prescribing physician has conducted a physical examination of the patient. There have been several cases where a pharmacist refused to fill a prescription that had been filled by a physician following a telehealth visit.
    • The proposed revision, published in the April 15 edition of the North Carolina Register, would allow pharmacists “to use their professional judgment” to fill a prescription, and also states that a prescription is valid “if it is a lawful order, made for a legitimate medical purpose, and in the course of legitimate professional practice ‘as recognized by the occupational licensing board governing the healthcare provider.'”
    • For more, click here.

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