House Ways and Means Committee expresses concern over payment changes for 2017 and the CDC issues guidelines for providers prescribing opioid


At the agencies

On March 15, the Centers for Disease Control issued new voluntary guidelines for providers regarding opioid medication prescribing. Key components of the new guidelines include limiting most initial opioid prescriptions for acute pain to three days and lowering doses of opioids for chronic pain patients. The guidelines do not apply to palliative, cancer, or end-of-life treatments. Despite being voluntary, many hospital systems are expected to adopt the new recommendations, and any Department of Veteran’s Affairs providers will be required to implement the new guidelines.

On March 15, the Centers for Medicare and Medicaid (CMS) Innovation Center proposed a new payment model for Part B drugs. The first phase of the new payment model is set to begin in the fall of 2016. Under the current model, providers are paid the average sale price for these drugs plus 6 percent to cover their cost of buying, storing, and administering medications. Under the new program, providers will be paid only 2.5 percent over the average sale price and a flat fee of $16.80 a day. In 2017 the agency is planning to introduce additional value-based pricing models that are intended to reduce co-pays for patients, benchmark rates for groups of equally effective drugs, and indications based pricing. 

The Government Accountability Office (GAO) recently released a report regarding current supplemental Medicaid payments to hospitals. The GAO used data from hospitals in four states to develop their report and determine how supplemental Medicaid funding was actually spent.  GAO concluded:

  1. CMS needs to clarify and widely distribute its guidance governing Medicaid supplemental payments, specifically in reference to ensuring a direct link between payments and Medicaid services, and
  2. Payments should not be made based on local financing in the locations in which the hospitals operate. 


On the Hill

On March 4,  bipartisan members of the powerful House Ways and Means Committee sent a letter to CMS expressing concern over a few of the Medicare Advantage and Part D proposed payment changes for 2017. The letter expressed specific concern over the funding formula changes to employer-based Medicare Advantage plans that would reduce payments and the proposed changes to the risk adjustment formula. The final payment policies are expected to be released on April 4.


In the courts

The 7th Circuit Court of Appeals ruled that the Advocate Health Care Network in Illinois is not exempt from ERISA, the “Employee Retirement Income Security Act.”  The case was brought to determine whether the Advocate Health Care Network could be exempted from ERISA as a religious affiliated hospital. The 7th Circuit determined that the hospital could not be treated to the same exemptions as a “church” health insurance plan.


In the states

New Jersey

On March 18, New Jersey Governor Chris Christie proposed a two-year moratorium on property tax rates for previously exempt not-for-profit hospitals and will be pushing legislative vehicles to support his proposal. He is also seeking to create a nine-member Property Tax Exemption Study Commission to review the state’s property tax law and to develop additional proposals for the governor and legislature that are fair to hospitals, municipalities, and residents. The issue began in June, when the New Jersey Tax Court denied Morristown Memorial Hospital three years of exemptions because of the hospital’s large number of private practice doctors and for-profit affiliates. Since then, many municipalities have sued other hospitals within their borders.


The Department of Human Services (DHS) announced that the CMS has granted states an additional six months to process the volume of revalidation applications received. Healthcare providers can now continue to bill PA Medical Assistance, as well as submit revalidation applications, past the original March 24 deadline, however, DHS must have all revalidations completed and processed by September 25, 2016. Providers who have a revalidation date before September 25 and have not had their applications processed by that date will be closed per the CMS regulation.

When a completed and processed application has been processed by DHS, a new revalidation date will be issued. At that time, providers are notified that a change was made to their enrollment file.

Subsequently, when a provider submits incomplete applications to DHS, they are returned to the provider. Examples of incomplete submissions are neglecting to fill out key pages in the application, forgetting to attach supplemental documents to their application such as copies of licenses, or documents verifying tax identification numbers.

DHS encourages providers not to wait to submit their revalidation applications. To verify revalidation dates, providers should log in to PROMISe™  in order to guarantee participation. Providers who need to enroll should visit the provider enrollment webpage to submit an application online or download a paper application.

For more information on this topic, or to learn how Baker Tilly healthcare specialists can help, contact our team.