On April 21, 2019, the Center for Medicare and Medicaid Innovation (“CMMI”) announced the CMS Primary Cares Initiative – a voluntary, risk-based initiative to transform the Medicare program’s reimbursement of primary care services from a fee-for-service payment system to a value-based system that rewards physicians who keep patients healthy and out of the hospital. The CMS Primary Cares Initiative creates five payment models under two paths: the Primary Care First Model (“PCF Model”) and the Direct Contracting Model (“DC Model”).   All five models focus on care for chronically and seriously ill patients.
Continue Reading Global and Professional Options Direct Contracting Model RFA and LOI Now Active

In a rare act of bipartisanship, Senate Finance Committee Chairman Chuck Grassley, R-Iowa, and Ranking Member Ron Wyden, D-Ore., introduced on July 23rd a chairman’s mark, the Prescription Drug Pricing Reduction Act (PDPRA) of 2019 (the “PDPRA” or “Mark”), to lower the price of prescription drugs for Americans. According to the Committee, the Congressional Budget Office (“CBO”) projects that the PDPRA would save taxpayers more than $100 billion in Medicare and Medicaid spending over 10 years, lower Medicare beneficiaries’ out-of-pocket costs by $27 billion and lower beneficiaries’ premiums by $5 billion. The bill passed out of committee by a 19-9 vote on July 25th.

Reaction to the Mark has been mixed. For example, the Pharmaceutical Research and Manufacturers of America criticized the PDPRA as the “wrong approach to lowering drug prices” and predicts it will “siphon” billions of dollars away from research and development without benefitting seniors at the pharmacy counter. America’s Health Insurance Plans was “encouraged” by the Committee’s work and expressed its readiness to work with Congress and the Administration.
Continue Reading Is Prescription Drug Pricing The Cure For Partisanship?

On April 10, 2019, the Department of Justice filed notices[1] appealing two District Court rulings that struck down Medicaid work requirements in both Kentucky[2] and Arkansas[3] to the U.S. Court of Appeals for the District of Columbia Circuit. The rulings, issued on March 27, 2019, by Judge James E. Boasberg of the Federal District Court for the District of Columbia, held that the U.S. Department of Health and Human Services (“HHS”) acted arbitrarily and capriciously in violation of the Administrative Procedure Act (“APA”) when it approved the Arkansas Works Amendments and Kentucky HEALTH programs. Arkansas and Kentucky halted the programs, pending resolution of the appeals.
Continue Reading Arkansas and Kentucky Halt Medicaid Work Requirements

On December 27, 2018, the U.S. District Court for the District of Columbia issued an opinion that ruled against the Trump Administration in its plan to cut funding from the 340B Drug Pricing Program (“340B Program”).[1]

Background

As discussed in a November 17, 2018 posting on this blog, the reimbursement rates for the 340B Program were significantly reduced when the Centers for Medicare & Medicaid Services (“CMS”) promulgated the “Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs” (the “Final Rule”). The Final Rule decreased the reimbursement rates for participating hospitals purchasing medicine through the 340B Program from 6% above the average sales price to 22.5% below the average sales price.[2]

After the Final Rule was published on November 13, 2017, the American Hospital Association, America’s Essential Hospitals and the Association of American Medical Colleges (the “Plaintiffs”) sued the Department of Health and Human Services (“HHS”) and sought a preliminary injunction to stop the enforcement of the Final Rule.[3] The motion for the preliminary injunction was denied, so the Final Rule’s reimbursement cuts went into effect on January 1, 2018.
Continue Reading 340B Drug Pricing Program Litigation Update: Court Rejects CMS Drug Pricing Cuts

In Advisory Opinion No. 18-11, the Department of Health and Human Services Office of the Inspector General (the “OIG”) addressed a Medicaid managed care organization’s (“MCO”) proposal to pay its contracted providers and clinics (“Network Providers”) to increase the amount of Early and Periodic Screening, Diagnostic, and Treatment (“EPSDT”) services they provide to the MCO’s Medicaid members. Under the State’s MCO program, MCOs are required to provide EPSDT services and face liquidated damages for failing to do so. Under the proposed arrangement, the MCO would provide per member incentive payments (“Incentive Payments”) to Network Providers that meet certain benchmarks for increasing the amount of EPSDT services they provide to MCO members. The amount of the Incentive Payments would be determined based on the percentage increase of EPSDT services provided to the MCO’s existing members from one year to the next.
Continue Reading How Broad is the Managed Care Safe Harbor?

On October 2, 2018, the CEOs of more than 700 hospitals and health systems representing healthcare providers in all fifty states sent a letter to Congress (the “Letter”) in a collective effort to protect the 340B Drug Pricing Program (the “340B Program”).[1] The CEOs expressed their view that recent governmental actions have reduced the reach of this vitally important program and that recently proposed legislation will undermine decades of bipartisan work to preserve access to prescription medication for the nation’s most vulnerable citizens.
Continue Reading More Than 700 CEOs of Hospitals and Health Systems Write to Congress to Stop Cuts to the 340B Drug Pricing Program

On July 17, 2018, the Court of Appeals for the D.C. Circuit upheld the D.C. District Court’s decision to dismiss the lawsuit led by the American Hospital Association, the Association of American Medical Colleges, and America’s Essential Hospitals challenging $1.6 billion in cuts to the 340B Drug Pricing Program. American Hospital Association, et al., v. Azar.
Continue Reading 340B Drug Pricing Program Litigation Update: American Hospital Association, Et Al. v. Azar

San Francisco (Monday, January 8, 2018): Outside it was raining heavily today in San Francisco, but inside the 2018 JP Morgan Healthcare Conference the weather was distinctly sunny. Nary a hint of gloom or pessimism was heard today from the hospitals and health plans presenting at the conference, even after the joys of last year’s “repeal and replace,” tax “relief” and the multiple redirections from CMS. Instead, we saw optimism, continuing implementation of prior strategic plans and, generally, continuing consensus of the need for greater scale; more analytics, digital engagement, big data and artificial intelligence; more population health management; and value-based/risk-based arrangements. Here’s some highlights from today’s proceedings:
Continue Reading Day 1 Notes from the 2018 JP Morgan Healthcare Conference in San Francisco

In November of last year, we wrote about a preliminary injunction being sought by hospital advocacy groups attempting to stop implementation of the Trump administration’s cuts to the 340B Drug Pricing Program (“340B Program”). Last week, the Motion for a Preliminary Injunction was denied and the case was dismissed in a final, appealable order. As a result, the final rule effecting such cuts – “Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs” (“Final Rule”), promulgated by the Centers for Medicare & Medicaid Services (CMS) on November 13, 2017 – went into effect on January 1, 2018.
Continue Reading 340B Drug Pricing Program Litigation Update

Today, President Trump signed into law a sweeping tax reform bill passed by the House and the Senate on Wednesday that will materially affect virtually every sector in the economy, including, perhaps to a greater degree than others, the healthcare sector. Between the bill’s repeal of the Affordable Care Act’s individual mandate penalty tax and other pertinent provisions, we might reasonably expect to see:
Continue Reading President Trump Signs Tax Reform Bill Into Law