On April 17th, Crowell & Moring’s Government Affairs and Health Care Groups hosted speakers from Capitol Hill, federal agencies, and national trade groups during a thought-provoking half-day Long Term Care Policy Update forum (“LTC Forum”). The LTC Forum was spearheaded by James Flood and Scott Douglas, who recently joined the firm from the Government Affairs division at Omnicare, a leader in the long-term pharmacy industry.
The LTC Forum focused on overall policy affecting the long-term care industry, which the Centers for Medicare & Medicaid Services (CMS), the Department of Health and Human Services (HHS) Office of the Inspector General (OIG), Congress, and other government agencies have consistently scrutinized. Throughout the day, LTC Forum participants discussed the challenges and opportunities present in the long-term care industry that will only increase as payment reforms become the norm in Medicare.
Of note, Sarah Johnson, the Legislative Assistant for U.S. Senator Rob Portman (R-OH) gave a timely overview of the negotiations that led up to the ultimate passage and signing of the Medicare Access and CHIP Reauthorization Act (MACRA). MACRA repealed the Sustainable Growth Rate (SGR) formula for Medicare payments to physicians and phases in a new Merit-Based Incentive Payment System and other alternative payment models over the next ten years. But MACRA partially funds these payment reforms with reductions to market basket updates for post-acute care providers, which creates increased concern from the industry about sustainability of long-term care providers under health reform initiatives. According to one audience comment, there is concern that “in the long-term care industry, [stakeholders] are going to lose sight of overall health care industry shifts.”
Participants in the LTC Forum shared many insights and asked probing questions during each of the four substantive discussion sessions, including the following:
Session I: CMS, Medicare Part D, and Medicaid Issues Facing the Long-Term Care Industry
- Panelist Paul Baldwin, a former government relations executive in both the pharmaceutical and long term care pharmacy industries, noted that CMS is clearly very interested in provider network adequacy.
- In the same vein, Christine Clements, who previously served as in-house counsel to Aetna Inc, and Kathleen McGuan of Genoa Healthcare discussed what payors and providers can do to mitigate the risks regarding network adequacy and to make sure patients’ needs are met. Overall, the panelists agreed that CMS should issue clearer standards regarding its expectations on network adequacy.
- As high-deductible health insurance plans become more prevalent, physicians are increasingly dealing with patients as the financially responsible parties for their care rather than insurance companies. Thus, especially in the long-term care pharmacy industry, achieving cost-efficiency and patient satisfaction will define success.
- “Lock-in” provisions designed to prevent abuse of frequently abused drugs are an area of ripe legislative debate in the long-term pharmacy industry, particularly because such provisions may disadvantage independent pharmacies. In addition, a delicate balance between prioritizing patient choice and ensuring drug plan sponsors’ need to protect their businesses against fraud allegations is necessary.
Session II: Current Operational Issues Facing the Long-Term Care Industry
- Patient census numbers in long-term care facilities have been declining for the past 10 years – the Affordable Care Act (ACA) will accelerate that trend with its focus on preventive care and home and community-based services.
- After the ACA, post-acute care providers are actually encouraged to collaborate with hospitals and other community providers to address care transitions and management of chronic diseases, but the fraud and abuse laws still present barriers to these arrangements.
There is an emerging “crisis” related to billing compliance for specialty drugs because of the differing rules applicable to patients and health care institutions.
- Pharmacy and long-term care facility access to patients’ health information in electronic medical records and health records from acute care and physician offices is largely an afterthought.
Session III: Reimbursement Issues Facing the Long-Term Care Industry
- Andrea Maresca, Director of Federal Policy & Strategy at National Association of Medicaid Directors (NAMD) noted that over one third of directors named a long-term care issue as one of their top priorities for 2015. Her comments highlighted the emphasis on moving people into the community as a strategy to achieve health care cost savings.
- Barbara Ryland, Senior Counsel at Crowell & Moring, pointed out that just twenty years ago managed care involvement in the long-term care industry was considered unthinkable; she also engaged in a lively discussion with LTC Forum participants about the strategies facilities and payors are turning to in order to obtain market advantage in the Medicare arena.
- Caroline Harmann, the Senior Director of Medicaid Reimbursement & Research at American Health Care Association noted that payment adequacy is an ongoing issue for the organization’s clients.
- There are continuing challenges around long-term care financing, particularly because of the perceived program inefficiencies caused by policy and operational challenges in that sector. NAMD is attempting to update how states interact with CMS regarding rate-setting development and oversight of actuarial soundness and therefore improve this intergovernmental relationship.
Session IV: Legislation in Congress Affecting Long-Term Care
- MACRA’s passage signals that Congress is willing to come up with bipartisan solutions to address rising health care costs and concerns about quality, but industry players in the long-term care sector need to work together more to advocate for their interests.
- Based on their respective experiences working with Senate Majority Leader Sen. Mitch McConnell (R-KY) and predicted future Minority Leader Sen. Chuck Schumer (D-NY), Scott Douglas and James Flood anticipate that the Senate is turning the corner on gridlock and steering a new course on bipartisanship, particularly in health care reform.
Given HHS’s recent announcement that 85% of physician payments for Medicare services will be from quality- or value-based payment mechanisms by 2016’s end, the long-term care industry will continue to feel the pressure to provide cost-effective and high-quality care for years to come. As many participants agreed, the next five years will be “brutal” for the long-term care industry. During his opening remarks, Health Care Group Co-Chair John Brennan encouraged a continuing dialogue on the issues that will affect the industry. The LTC Forum is the first of many conversations in which the firm seeks to work with the long-term care industry on meeting the anticipated challenges head-on.