HIDA Health Reform Update

By Linda Rouse O’Neill, VP Government Affairs, HIDA

Spring started fast for the government, which took significant steps on key healthcare topics including Medicare’s physician sustainable growth rate (SGR) formula, CMS’s competitive bidding program, and the FDA’s pedigree traceability implementation. Subsequently, HIDA’s Government Affairs team provided the following input and analysis to help distributors and government officials navigate these developments.

SGR reform not a Reality, but “patch” passes, yet again
The President signed into law the 17th short-term Congressional SGR “patch” bill, further delaying efforts to repeal and replace the formula that determines physician payment rates.

The bill includes provisions that:

• Avoid a 24 percent cut in Medicare reimbursement for physicians, increasing payments by 0.5 percent throughout 2014 and freezing payment updates at 0 percent from Jan. 1 to April 1, 2015;
• Delay the transition from ICD-9 to ICD-10 for a year until Oct. 1, 2015; and
• Postpone hospital compliance with the “two-midnight” rule until March 1, 2015.

The bill also requires $20 billion in offsets, which Congress intends to pay for partly by:

• Cutting reimbursement payments through market-based reforms to the Medicare lab fee schedule;
• Creating a skilled nursing facility (SNF) value-based purchasing program that would be based in part on a SNF’s performance measuring readmission rates before Oct. 1, 2015, based on industry proposals;
• Using previously set-aside transitional funds for SGR reform;
• Ensuring accurate values for the Physician Fee Schedule Services; and
• Rebasing and delaying payment reductions to Disproportionate Share Hospitals by one year.

It appears to be “wait and see” once again for a more permanent, long-term SGR solution. Expect future repeal actions likely to be tabled until after the election.

HIDA provides CMS input on competitive bidding national roll out
CMS recently announced an advance notice of proposed rulemaking, soliciting comments from stakeholders on how to apply Medicare’s competitive bidding program for DMEPOS and/or competitive bidding pricing in non-competitive bid areas. The ACA requires CMS to roll out the competitive bidding program nationwide in 2016.
HIDA encouraged the agency to implement an across-the-board fee schedule cut in areas not currently competitively bid due to the completely different business models and cost to serve rural providers and patients. Specifically, HIDA recommended that CMS:

• Recognize that applying a bundled payment pricing methodology to items and services subject to Medicare’s DMEPOS competitive bidding program is premature;
• Use its own authority to adjust Medicare’s Durable Medical Equipment/Parenteral and Enteral Nutrition (DME/PEN) fee schedule in non-competitive bidding areas;
• Ensure a thorough examination of the current competitive bidding program is conducted prior to expanding nationwide; and
• Modify several aspects of the current bidding process to ensure reimbursement rates are indicative of fair market value.

FDA receives comments on pedigree
If you thought getting a uniform federal prescription drug-tracing standard signed into law was a tough task, you may want to hold your breath as the FDA weighs implementation strategies for the Drug Supply Chain Security Act. The administration recently solicited comments from stakeholders on how to best exchange pharmaceutical pedigree data throughout the supply chain.

Under the pedigree law, a uniform standard for exchanging the newly required information is required Jan. 1, 2015. Given the aggressive timeline and various capabilities among trading partners, HIDA strongly recommends that the FDA provide flexibility to include multiple paper and electronic options currently in practice for exchanging transaction history, transaction information, and transaction statement information.

While all of these options will require modifications to meet the new requirements it is less burdensome than starting from scratch. Specifically, HIDA recommends the paper packing slip, web portal/database and advanced shipment notices be recognized by FDA as meeting the standard.

The FDA will consider these comments along with others as it drafts its final guidance for the information exchange standard. For more information on this topic, as well as competitive bidding and SGR, visit us at www.HIDA.org or contact us at HIDAGovAffairs@hida.org.