By Melanie Zanona, CQ Roll Call

August 26, 205 -- Backers of a plan to ease Medicaid restrictions on treating children with complex medical needs across state lines are trying to make it a bipartisan rallying point after the proposal was dropped from the House-passed "21st Century Cures" bill.

Republican sponsor Joe L. Barton of Texas is pressing for a fall hearing on a measure (HR 546) addressing the effects of the program's state-specific coverage requirements and said it could pass as stand-alone legislation. The Senate companion bill (S 298) is backed by Charles E. Grassley, R-Iowa.

"We wouldn't have the bill if the current system was working hunky dory, it's not," Barton told CQ Roll Call. 

"If you have a child that has multiple complex conditions, there is not a current system that coordinates and brings us under one health care provider."

The measure is a response to reports of Medicaid families running afoul of coverage rules when they travel to neighboring states to obtain specialized care. A child in the New Jersey suburbs of Philadelphia living five miles from the Children's Hospital of Philadelphia may not be covered for care there, advocates say. The health program for the poor is managed by states, which set their own eligibility requirements.

Barton's bill would allow states to set up nationally designated children's hospital networks that would operate across state lines and offer a full array of care, though children's hospitals would serve as anchors. The networks also would gather data on rare medical conditions to determine best practices and care standards.

The measure was introduced comparatively late in the last Congress, in June 2014, and didn't receive a hearing or markup. Advocates say they are nonetheless encouraged by the growing number of cosponsors: The latest House version has 144 cosponsors, with 81 Democrats and 63 Republicans.

"In this post-Affordable Care Act environment, to have a Medicaid bill that's almost evenly split between the two parties is important," said Jim Kaufman, vice president of public policy for the Children's Hospital Association.

The effort was part of early drafts of a biomedical innovation package (HR 6), which was introduced earlier this year and passed the House in July. It was dropped, in part, over concerns about the way it would modify the Medicaid title of the Social Security Act when the Cures bill is primarily aimed at the National Institutes of Health and Food and Drug Administration.

Barton said the plan's inclusion in the draft raised its profile, which could improve prospects for passage. The Texas lawmaker said House Energy and Commerce Chairman Fred Upton, R-Mich., Health Subcommittee Chairman Joe Pitts, R-Pa., and some members of House leadership have been receptive.

"It got a lot of attention that it wouldn't otherwise have, and it showed it was a serious legislative issue," Barton said. "A lot of good things happened by it being in the draft."

The bill appears to have better short-term prospects in the House. A Senate committee aide said the Medicaid children's provision won't be included in the Health, Education, Labor and Pensions Committee's version of a medical innovation bill due this fall, because the health program comes under the jurisdiction of the Finance Committee. The language could still resurface as a floor amendment to a Cures bill.

Advocates estimate that the legislation would save billions of dollars over a decade, by providing more efficient care to the approximately 2 million Medicaid children with complex cases, who rely on access to multiple specialists, therapists and hospitals and account for 40 percent of program spending on children's services.

But some Medicaid administrators remain concerned that the changes would be mandatory and could interfere with some states' ongoing efforts to overhaul their delivery and payment systems. They also maintain that the legislation is not necessary because states already have the power to establish such networks.

"The bill runs contrary to widespread state Medicaid initiatives that are moving beneficiaries away from hospital-based networks and into the least costly, most appropriate setting that provides quality care," the National Association of Medicaid Directors wrote in a letter to congressional staff earlier this year. "While this legislative proposal would seek to serve medically complex children in lower cost settings within a given network, states are concerned that the model ultimately still places hospitals at the center of an individual's care."

By Kerry Young, CQ Roll Call

August 26, 2015 -- The Centers for Medicare and Medicaid Services (CMS) on Tuesday said its accountable care organization programs generated more than $411 million in savings last year, a result that will aid its attempts to move away from the fee-for-service model of payment.

CMS released results from the 20 organizations in its so-called Pioneer Accountable Care Organization (ACO) programs and the 333 in the shared savings program. The organizations with more experience in the ACO program tended to perform better over time, CMS said in a statement.

ACOs include groups of hospitals and medical practices that seek to better coordinate the delivery of care, with the aim of reducing duplication of services and medical errors. CMS expects the groups to generate savings for Medicare.

By Kerry Young, CQ Roll Call

August 28, 2015 -- The Centers for Medicare and Medicaid Services (CMS) is seeking an emergency review of its request to collect more information from health insurance companies in connection with the medical loss ratio data and risk corridor regulations, which both are part of the agency's effort to fully implement the Affordable Care Act (ACA).

That law compels insurers to submit data on the proportion of premium revenues spent on medical services and quality improvement program, referring to this spending as the medical loss ratio (MLR), according to a general explanation on the CMS' web site. Companies that exceed certain limits then have to issue rebates. The risk corridor program is part of the incentives and support provided to the insurance industry through the 2010 law, which seeks to broaden the number of Americans who have medical coverage.

CMS found a "number of significant discrepancies in the 2014 benefit year submissions that issuers made for MLR and risk corridors on July 31, 2015," the agency said in a document filed with the Federal Register Thursday afternoon. CMS officials said in the filing that they are concerned that the agency "will be unable to verify the accuracy of the submission and validate the data needed to operate the MLR or risk corridors programs" if it doesn't get additional information.

"Based on CMS's identification of more significant data discrepancies than previously anticipated, we are requesting an emergency revision to the risk corridors data validation information collection requirement," CMS said in the filing.

CMS is seeking to modify information collection procedures currently approved by the Office of Management and Budget. The Thursday filing makes a request for public comment on this request for emergency clearance, giving interested parties until Sept. 3 deadline to make submissions.

CMS on Aug. 7 had said it found "a significant number of discrepancies" while reviewing the submitted risk corridor data. "CMS previously indicated its intention to publish preliminary estimates of program-wide payments and charges for the risk corridors program on August 14, 2015," CMS said on Aug. 7. "In order to allow for a full validation of these data discrepancies, we are postponing the publication of the preliminary risk corridors program results at this time."

By Kerry Young, CQ Roll Call

August 28, 2015 -- A broad and much anticipated draft guidance document for the 340B federal drug discount program was unveiled Thursday.

The Health Resources and Services Administration (HRSA) is seeking to address some of the bitter disputes between hospitals and drugmakers over the effort. Created in the 1990s, the 340B program was designed to give hospitals that serve the poor extra funds to support needed services. The proposed guidance is considered the first major attempt to overhaul the program.

The American Hospital Association said in a Thursday statement that it's reviewing the proposed guidance notice, which runs to roughly 90 pages.

"We want to make certain that the new requirements do not overburden hospitals and strike a balance between hospitals and pharmaceutical companies for ensuring program integrity," said Ashley Thompson, acting senior executive for policy, at the AHA in a statement.

Lori Reilly, executive vice president of policy and research for the Pharmaceutical Research and Manufacturers of America (PhRMA), said that her group also is reviewing the proposal.

"PhRMA has long maintained the 340B drug discount program should be targeted to true safety net hospitals and the recipients of federal grants, which rely on the program to serve vulnerable patients," she said.

Debate about the 340B program may continue even after HRSA finalizes this guidance. The expansion of the program has drawn more congressional scrutiny of it in recent years, with longtime health spending watchdog Sen. Charles E. Grassley, R-Iowa, taking a particular interest in it. 

Hospitals and medical organizations that treat large numbers of people living in poverty spent more than $7 billion on 340B drugs in 2013, three times what they spent in 2005, according to the Medicare Payment Advisory Commission. MedPAC in May delivered to Congress a special report that had been requested about the discount program. In its separate June report, GAO said about 40 percent of hospitals in the United States participate in the program.

By CQ HealthBeat Staff, CQ Roll Call

August 25, 2015 -- One of four employers offering health benefits could be subject to the Affordable Care Act's tax on high-cost plans, with the share of those potentially affected growing to 42 percent by 2028, unless the companies revise their benefits, according to new projections from the Kaiser Family Foundation.

The so-called Cadillac Tax is set to take effect in 2018 and funds coverage expansions under the law. It taxes plans at 40 percent of each worker's health benefits exceeding certain coverage thresholds—$10,200 for self-only coverage and $27,500 for family coverage in the first year.

Using data from an employer health benefits survey, Kaiser projected 26 percent of companies offering benefits could be hit by the tax in 2018 unless the increase deductibles, eliminate some covered services, narrow provider networks or make other adjustments. For the most part, such changes would result in workers paying a greater share of their health care costs out of pocket.

"The amount and structure of the [tax] provide a strong incentive for employers to avoid hitting the thresholds," Kaiser stated, noting the health law doesn't allow employers to deduct the tax as a cost of doing business. And because the tax is directly levied on health insurers and providers, not employers, the pass-through to firms and their workers may not be straightforward, with retroactive billings and other ripple effects, a memo accompanying the projections stated.

Kaiser projects the percentage of employers with at least one health plan that would exceed the tax threshold will rise to 30 percent in 2023 and 42 percent in 2028, absent any changes in plan design.

The Cadillac Tax was designed to discourage employers from offering overly generous health coverage and driving up medical spending. However, while it's portrayed as a tax on generous plans, it's calculated with respect to each covered employee based on a combination of benefits received and can vary by worker at the same company, Kaiser noted.

By Niels Lesniewski, CQ Roll Call

August 24, 2015 -- The No. 3 Senate Republican hinted there may be no effort to use fast-track budget procedures to get a health law repeal to the president's desk this year.

During a broader interview about GOP messaging, Senate Republican Conference Chairman John Thune noted that when Democrats passed the sidecar to the law with a simple majority in the Senate through budget reconciliation, it was the calendar year after the relevant budget resolution was adopted.

"I think if we use reconciliation for Obamacare, I don't know if there's any particular rush to doing it. You know that's an issue that's going to be around for a while. It's not going away. And reconciliation has been used in the past, not only in the year in which the budget passed, but in the subsequent year," the South Dakota Republican said. "I mean, that's actually how the Democrats did Obamacare in 2010, because the budget was '09 and then they used the vehicle whenever that was, late spring of '10."

Thune emphasized that no decisions had been made, but he did say whenever that vote might happen (which would set up certain veto bait with President Barack Obama in the Oval Office) there was a good case for using the reconciliation bill for the repeal measure, to the extent allowable under the arcane budget rules, since bills that Obama might sign would likely need an abundance of Democrats anyway.

"The question of timing is one thing. The question of substance and content is another, and I think that that has yet to be decided, but you are right. We have a lot of people who want to see it used to repeal Obamacare," Thune said in the interview. "And I would say that's a very likely, you know, outcome, because if you use it for anything else—anything right now probably to get a presidential signature is going to have to have Democrats on board—and so the value of using reconciliation is being able to do something with 51 votes."

He said there was "a lot of pent up demand" among Republicans on both sides of the Capitol for such an effort, and no shortage of conservative activists and presidential candidates have made similar calls, with some already outlining their own repeal plans.

With the executive and legislative branches split between Democrats and Republicans, the only real exception might be some kind of big deal that the left and right flanks are reluctant to accept, leading it to have short of 60 votes to overcome a filibuster threat.

"The only thing would be if you had a tax reform bill that drew 51 from the middle," Thune said. "There are exceptions to what I'm saying, but by and large, I think reconciliation is going to be used at a time you have a president of your own party and you're trying to push through some major legislative initiative."

But any sort of big fiscal deal or tax code overhaul like that would be the kind of measure that would assuredly inflame the conservative base and more than likely need Democratic votes to carry the day in the House of Representatives—all factors that make using the reconciliation bullet for a veto-bail bill cutting off as much of the 2010 law the most attractive option.

Given the reality that the repeal effort is mainly about setting the stage for the 2016 elections, delaying the effort into next year has a certain logic too, putting it before voters closer to election day.