CMS releases its new Medicare drug spending dashboard and the “Cadillac” tax is delayed

CMS releases its new Medicare drug spending dashboard and the “Cadillac” tax is delayed

At the agencies

On December 21, the Centers for Medicare and Medicaid Services (CMS) released its new Medicare Drug Spending Dashboard. Using 2014 data, CMS published generic and brand-name pricing information for the highest cost drugs. Eighty drugs under Part B and Part D that represent $55 billion in Medicare spending are on the Dashboard. The Dashboard does not have the ability to conduct price comparisons which would be useful to prescribers. It also does not include information on the discounts negotiated by drug makers and the private plans that administer Part D. CMS plans to publish similar drug pricing information for Medicaid sometime this year.

On December 21, CMS released its justification for their methodology in calculating Medicare reimbursement rates for disproportionate share hospitals (DSH). The justification, a 46-page document, was released by CMS after the DC Circuit Court found that the agency had not been transparent when it cut DSH payments in 2004. The justification document was sent to the legal counsel for hospitals that are disputing the DSH cuts. CMS did not sway from its position that Medicare Part A beneficiaries are still entitled to benefits when they decide to also enroll in Medicare Advantage plans, the main dispute between the parties on either side of the issue.

The Federal Trade Commission (FTC) is attempting to prevent the planned merger between leading Chicago hospitals, Advocate Health Care Network, and NorthShore University HealthSystem. This is the third such hospital merger the FTC has recently opposed. If the merger were to move forward, the resulting entity would account for more than 50 percent of acute hospital care in the North Shore part of Chicago. The FTC is questioning the extent to which the merger would improve the quality of care and lower costs. The agency fears that the merged hospital’s increased bargaining power would harm consumers by hiking prices and lowering quality.

On the Hill

On December 18, Congress was able to pass a $1.1 trillion spending and tax extenders bill which delays the medical device tax and the so-called “Cadillac” tax, which was created by the Affordable Care Act (ACA) and would put a tax on high cost health plans offered by employers, for a two year period of time. Other healthcare related provisions included a $2 billion increase in funding for the National Institutes of Health (NIH) and funding for the health program for 9/11 first responders. The bill also included a provision that would continue to limit the funding for the risk corridor program which will lead to likely shortfalls of the funds owed to insurers operating on the ACA exchanges. Although advocates for the issue had hoped that the Omnibus would include a provision that would have exempted outpatient departments that are currently under construction from lower Medicare rates created by the budget deal reached earlier this year, the bill ultimately included no such language.

The Senate Finance Committee’s Chronic Care Working Group released a 30-page report detailing proposals to help reduce costs and improve care for Medicare recipients with long-term conditions. The report emphasizes that the proposals, based on comments by interested parties, are not yet being endorsed by the committee and must save money or be budget neutral. Proposals include consideration of a nationwide expansion of the ACA’s Independence at Home demonstration project and requiring Medicare Advantage plans to provide hospice care.

In the courts

On December 30, the Pennsylvania Commonwealth Court ruled that a provision of state law prohibiting individuals who have been convicted of certain crimes from working in healthcare facilities providing care to the elderly is unconstitutional. Among the crimes covered by the now unenforceable provision were murder, rape, and certain types of drug offenses. In the court’s opinion, the judges clarified that facilities are not obligated to employ people with criminal records but that a lifetime ban of employment for individuals with criminal records at these types of facilities violates due process.

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

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Proposed regulations for country-by-country reporting