HealthCare Roundtable e-News – May 19, 2017

Senate Panel Advances Chronic Care Bill

A Senate panel advanced legislation that is intended to enhance chronic care management in Medicare.

The Senate Finance Committee voted 26-0 at a May 18 hearing to send the “Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act” (S. 870) to a vote by the full Senate. The legislation was crafted by the Senate Finance Committee Chronic Care Working Group, which includes committee Chairman Orrin Hatch, R-Utah, Ranking Member Ron Wyden, D-Ore., Sen. Johnny Isakson, R-Ga., and Sen. Mark Warner, D-Va.

“The CHRONIC Care Act is the culmination of a committee-wide, bipartisan effort to improve outcomes for patients with chronic conditions,” Hatch said. “As the first major bipartisan health care bill introduced in the 115th Congress, the CHRONIC Care Act will improve disease management, lower Medicare costs and streamline care coordination services – all with bipartisan solutions and without adding to the deficit.”

A Congressional Budget Office report concluded that, over 10 years, the legislation would have no net impact on the federal budget.

The Public Sector HealthCare Roundtable wrote to members of the working group to express support for the bill and note several areas in which the legislation’s provisions “align with the Roundtables policy priorities.”

The bill has not been scheduled for a Senate vote, but Hatch said, “We intend to get this bill through.”

The proposal would, among other things, expand certain telehealth and home care options; enhance options for the chronically ill within Medicare Advantage; increase payment accuracy for patients with chronic conditions; provide more flexibility to the beneficiary selection process in accountable care organizations, and allow more care coordination in ACOs. (Summary)

The senators in the working group unsuccessfully introduced the same bill during the last session of Congress.

The proposal is based in part on the 327 comments the working group received regarding a December 2015 policy options paper. The Roundtable submitted comments in January 2016 stating that the options paper “reflects work and analysis that will further the goal of improving care for the millions of vulnerable Medicare beneficiaries managing multiple chronic conditions.”

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Roundtable Seeks Changes to FDA’s Biosimilar Interchangeability Guidance

The Public Sector HealthCare Roundtable has signed on to a letter urging the Food and Drug Administration (FDA) to make it easier for biosimilars to be designated as “interchangeable.”

Biologic drugs are highly advanced medicines derived from biological, rather than chemical, processes. They are among the most innovative of drug treatments and, as such, are also among the most expensive, potentially costing tens, even hundreds, of thousands of dollars each year for a single patient. Generic biopharmaceuticals, known as biosimilars, offer lower-cost alternatives, as with generic versions of traditional drugs. The FDA has approved five biosimilars so far.

The FDA in January released guidance on demonstrating biosimlar interchangeability with a brand-name reference product. If a drug is designated as “interchangeable” with its reference product, pharmacists may substitute it when a doctor prescribes the reference product. The interchangeability issue is more complicated with biologics than it is with traditional, chemical drugs because biologics involve living material, so a biosimilar can never be an exact copy of the original biologic.

On May 18, the Roundtable and nine other groups submitted comments on the guidance in which they wrote that they were “generally supportive” of the document, but would like to see a few revisions made.

“Most importantly, FDA should permit a designation of biosimilarity parallel to granting an interchangeability designation if the applicant seeks both at the time of initial approval,” the groups wrote. “Any applications which demonstrate that the product can be expected to produce the same clinical results as the reference product in any given patient,’ as required by statute should be deemed interchangeable.”

In addition, the groups expressed opposition to a provision of the guidance that directs that switching studies referenced in an interchangeability application should involve only U.S.-licensed reference products.

“There is no scientifically justifiable distinction between reference products acquired in the U.S. and those licensed in other comparable markets,” they wrote. “This requirement will create significant burden on biosimilar manufacturers pursuing switching studies, who can often acquire equivalent samples of reference products from other highly regulated markets at much lower costs.”

Other groups signing on to the letter include the Blue Cross Blue Shield Association, Express Scripts and the National Association of Chain Drug Stores.

The public comment period for the guidance closed on May 19.

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Trump Administration Sends More Mixed Signals on Insurance Subsidies

The Trump administration has asked a federal court to keep a ruling against cost-sharing subsidies in the insurance exchanges on hold.

The Patient Protection and Affordable Care Act (ACA) provides for about $7 billion in federal payments to insurers each year to bring down deductibles and out-of-pocket costs for lower-income beneficiaries. Last year, a federal judge ruled, in a case filed by House Republicans, that the Obama administration’s payment of the subsidies was unconstitutional because, although they were included in the ACA, the Republican-controlled Congress had not appropriated the funds for the payments. The judge who issued the ruling, though, put it in abeyance, pending an appeal.

While President Donald Trump has hinted that the government may stop paying the subsidies in an attempt to force congressional Democrats to negotiate changes to the ACA, it has made the monthly subsidy payments as usual through May, and the White House has not abandoned the appeal. Now administration officials have, in a joint filing with congressional Republicans, asked the U.S. Court of Appeals for the District of Columbia Circuit to delay the implementation of last year’s ruling for at least 90 more days.

“The parties continue to discuss measures that would obviate the need for judicial determination of this appeal, including potential legislative action,” Republicans stated in a court filing.

With the Trump administration potentially willing to drop the appeal, 16 Democratic state attorneys general are seeking to join the case in defense of the subsidies, but it is unclear if the court will allow it. The filing by Republicans noted that the court previously rejected a similar attempt by individuals to join the suit. They added that they would “respond separately to the States’ request.”

All of this is occurring in the context of Republicans trying to pass health care legislation that would make major changes to the ACA, and insurance companies submitting premium bids to state regulators for 2018. Insurers and health care providers have expressed concern about the uncertainty surrounding the subsidies and have urged the administration to commit to making the payments. In April, America’s Health Insurance Plans, the American Medical Association, the U.S. Chamber of Commerce and five other groups wrote in a letter to Trump that the payment of the subsidies is the “most critical action to help stabilize the individual market for 2017 and 2018.”

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DOJ Files Another Complaint Against UnitedHealth Group for Medicare Fraud

The Department of Justice (DOJ), for the second time this month, has accused UnitedHealth Group in a court filing of committing massive fraud in the Medicare Advantage program.

Medicare Advantage offers managed care plans through private companies, which receive a fixed amount of money from the federal government per beneficiary each month. About 18 million people – roughly one-third of all Medicare beneficiaries – are in Medicare Advantage. Payments for a given beneficiary are based on an individualized “risk score” and are higher for patients who are identified as being sicker and, thus, more demanding of health care services. Audits have found that, in some cases, insurers appear to have exaggerated the ailments of their beneficiaries, overbilling the Centers for Medicare & Medicaid Services (CMS) for potentially billions of dollars.

In February, the Justice Department joined a whistleblower lawsuit filed in 2011 that accuses UnitedHealth, the largest Medicare Advantage insurer in the country, of reporting to CMS inflated risk scores that indicated that patients were sicker than they really were. DOJ filed its formal complaint against the company on May 16.

“For many years, United has conducted programs and engaged in other activities to increase the amount of risk adjustment payments from Medicare,” the complaint stated. “This includes programs and other efforts to directly influence both the number of diagnoses and the severity of the medical conditions reported by providers. This also includes programs and efforts which do not involve the providers.”

The complaint noted, in particular, the company’s practice of reviewing patients’ medical records “in order to mine for diagnoses that the providers themselves did not report to United.”

“United’s national Chart Review Program was strictly a one-sided revenue-generating program,” the complaint stated. “United did not review the beneficiaries’ medical records in good faith in order to obtain a true and accurate picture of the health status of the beneficiaries in its [Medicare Advantage] Plans or to submit truthful and accurate risk adjustment data to the Government. United used the results of the chart reviews to only increase government payments (i.e., submit additional codes not reported by the providers) while in bad faith systematically ignoring other information from the chart reviews which would have led to decreased payments.”

Overpayments stemming from chart reviews totaled $3 billion just between 2010 and 2015, according to the complaint.

The lawsuit also names 14 other companies, but the Justice Department is only participating in the case against UnitedHealth and its subsidiary, WellMed Medical Management.

On May 1, the DOJ filed a complaint in a separate but similar whistleblower lawsuit against UnitedHealth.

UnitedHealth has denied any wrongdoing.

The Center for Public Integrity has estimated that Medicare Advantage overpayments to all insurers, whether the result of fraud or errors, may have totaled as much as $70 billion between 2008 and 2013, while the Government Accountability Office (GAO) concluded in an April 2016 report that CMS is not doing enough to recover improper payments in Medicare Advantage.

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