MHA Federalist

HRSA issues proposed rule for 340B orphan drug exclusion

The Health Resources and Services Administration on May 20 published a proposed rule clarifying how it will implement the exclusion of orphan drugs under the 340B drug discount program for hospitals and rural referral centers newly eligible for the program under the Patient Protection and Affordable Care Act. With the exception of inpatient drugs and outpatient orphan drugs, the ACA expands eligible participants in the 340B program to include critical access hospitals and certain non-prospective payment system children’s hospitals, free-standing non-PPS cancer hospitals, and sole community hospitals and rural referral centers that have disproportionate share adjustment percentages equal to or greater than 8%.

Under the proposed rule, these newly covered entities could purchase outpatient orphan drugs at 340B prices to treat common conditions for which the drugs are approved, but not to treat the rare conditions or diseases for which the drugs were given their orphan drug designation. HRSA will accept comments on the proposed rule through July 19.

[ via AHA News Now ]

AHA issues model comment letters for ACO antitrust, fraud/abuse proposals

The American Hospital Association has drafted a model comment letter members can use as they develop their own responses to the Centers for Medicare & Medicaid Services/Office of Inspector General notice on proposed fraud and abuse waivers for accountable care organizations under the Medicare Shared Savings Program, and the Department of Justice/Federal Trade Commission proposed statement of antitrust enforcement policy for the ACOs. The notice and statement were issued along with the CMS proposed rule for the program.

Comments on the CMS/OIG notice are due June 6, while comments on the antitrust agencies’ statement are due May 31. The model letters released are part of the AHA’s multipronged response to the ACO proposed rule and associated proposals. The AHA recently issued an analysis of the start-up and ongoing costs associated with an ACO.

The AHA plans to submit detailed comments on the proposed rule and associated proposals in the near future.

Comparative effectiveness institute names executive director

The Patient-Centered Outcomes Research Institute, established by the Patient Protection and Affordable Care Act to conduct comparative clinical effectiveness research, on May 16 named as its executive director Joe Selby, M.D. Selby joins PCORI from Kaiser Permanente, Northern California, where he directed the organization’s research division.

He was elected to membership in the Institute of Medicine in 2009 and was a member of the Agency for Healthcare Research and Quality study section for Health Care Quality and Effectiveness from 1999-2003. As executive director, Selby will implement programs authorized by the PCORI Board of Governors.

Study: Cost of establishing an ACO significant

The estimated start-up and first-year costs to establish and sustain the core competencies necessary to manage the care of a defined population through an accountable care organization are considerably higher – $11.6 to $26.1 million – than the $1.8 million estimate made by the Centers for Medicare & Medicaid Services in its proposed rule, according to a new study prepared for the American Hospital Association by McManis Consulting. Based on four case studies of organizations that have taken steps to manage the care of a defined population in a manner similar to an ACO, the study creates two hypothetical examples to estimate the start-up and ongoing costs of establishing an ACO.

The study was completed prior to the release of the ACO proposed rule and therefore does not include estimates of the costs of meeting the rule’s specific requirements. However, it identifies 23 different capabilities that must be developed across four categories to achieve the desired transformation in care delivery: network development and management; care coordination, quality improvement and utilization management; clinical information systems; and data analytics.

“CMS’ estimate falls short of the mark,” said AHA President and CEO Rich Umbdenstock. “The shared savings rate with ACOs should be adjusted to reflect these costs in order to encourage and enable participation in this important program.”

House panel votes to repeal ACA maintenance-of-effort requirements

The House Energy and Commerce Health Subcommittee on May 12 voted 14-9 to approve H.R. 1683, legislation that would repeal federal requirements that states maintain their eligibility levels for Medicaid and the Children’s Health Insurance Program until 2014, when Medicaid coverage is expanded under the Patient Protection and Affordable Care Act to all legal residents earning up to 133% of the federal poverty level. Currently, the ACA allows states that have already expanded coverage to 133% of the FPL or more to seek a waiver from these maintenance-of-effort requirements if they can demonstrate hardship. The bill next goes to the full committee for consideration, likely after next week’s House recess.

[ via AHA News Now ]

Fourth Circuit Court of Appeals hears oral arguments in ACA lawsuits

The Fourth Circuit Court of Appeals on May 10 heard oral arguments in two cases challenging the constitutionality of the Patient Protection and Affordable Care Act. Almost all of the substantive discussion of the constitutional issues came during the hearing involving Liberty University, a case in which the lower court upheld the ACA's constitutionality.

The arguments in the other case, filed by Virginia Attorney General Ken Cuccinelli, revolved almost entirely around the question of whether the state has standing to sue. The American Hospital Association, Association of American Medical Colleges, Catholic Health Association, Federation of American Hospitals, National Association of Children's Hospitals, and National Association of Public Hospitals and Health Systems have filed joint amici briefs urging the court to uphold the constitutionality of the law in both cases.

Study: 44 million could lose Medicaid coverage under GOP plan

House Republican plans to repeal the new health care law and to convert the Medicaid insurance program into a block grant to states could force as many 44 million poor and disabled Americans out of the program over the next decade, according to a new analysis by the nonprofit Kaiser Family Foundation. Hardest hit would be states, many in the South and West, that have not built up their healthcare safety nets in recent years.

Read more from the Los Angeles Times here.

Health Reform: The Legal Fight Moves To The Next Level

On May 10, the Fourth Circuit federal court of appeals heard oral arguments in two Affordable Care Act cases (ACA), Liberty University v. Geithner and Virginia v. Sebelius. In the Liberty University case, Judge Norman Moon of the Western District of Virginia had upheld the constitutionality of the Affordable Care Act against a challenge brought by Liberty University, a conservative university founded by Jerry Falwell, and several individuals.  In the Commonwealth of Virginia case, Judge Henry Hudson of the Eastern District of Virginia had held that the minimum coverage requirement of the ACA (often referred to as the “individual mandate”) was unconstitutional.

The Fourth Circuit heard arguments in the Liberty University case first, then the Virginia case.  In both cases, the government was represented by Solicitor General Neal Kumar Katyal.  The Solicitor General is the chief litigator of the Justice Department and rarely argues cases except before the Supreme Court.  It is an indicator of the seriousness with which the government is taking this challenge that the Solicitor General chose to argue it himself.  Liberty University was represented by Matthew Staver and the Commonwealth of Virginia by its Solicitor General, Duncan Getchell.

Indeed, the importance of this case, the first case on the constitutionality of the ACA to be heard by an appellate court, cannot be overestimated.  That the court is hearing two cases in which the lower courts reached opposite conclusions, and that one is brought by a state, enhances the significance of the occasion.  The Virginia case drew twenty-five amicus briefs and the Liberty University case ten, including briefs from state officials, members of Congress, organizations representing providers and persons with chronic diseases, law professors, and advocacy groups — conservative and progressive.

Read more from the Health Affairs blog here.

CMS announces regional forums on ACO proposed rule

The Centers for Medicare & Medicaid Services this month will hold a series of regional public forums on its proposed rule for accountable care organizations under the Medicare Shared Savings Program. For details on the forums, which will review the proposed rule and how to participate in the formal comment process, see the CMS notice.

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