On March 27, 2019, the Centers for Medicare & Medicaid Services (CMS) announced a $1.65 million competition to accelerate development of AI solutions in health care. The Artificial Intelligence (AI) Health Outcomes challenge seeks innovative, AI-driven solutions that can predict unplanned hospital and skilled nursing facility (SNF) admissions and adverse events.

The challenge is a

Nearly 20,000 comments have been submitted in response to the Department of Health and Human Services January 31, 2019 notice of proposed rulemaking eliminating discount safe harbor protection for reductions in price to prescription pharmaceutical products (or rebates) provided by manufacturers to plan sponsors under Medicare Part D and Medicaid managed care organizations (MCOs), whether negotiated by the plan or by pharmacy benefit managers (PBM) or paid through a PBM to the plan or Medicaid MCO. Most of the comments appear to be relatively short, text box comments submitted by individuals through patient or business advocacy groups.  The following is a very high level summary of the several hundred comments posted (so far) from health plans, manufacturers, pharmacies, their respective associations, and policy oriented groups:
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Last week the Centers for Medicare & Medicaid Services (CMS) announced significant policy changes for Medicare Advantage (MA) and Part D programs. On April 1, 2019, CMS released the calendar year 2020 Rate Announcement and Call Letter, and on April 5, 2019, CMS release the unpublished version of a final rule revising the MA and Part D program regulations for 2020 and 2021 (scheduled to be published April 16, 2019). These documents include many important policy changes for MA plans—including opportunities to offer broadened supplemental benefits packages and expanded telehealth services.

Supplemental Benefits for the Chronically Ill

Traditionally, CMS has interpreted section 1853(a) of the Social Security Act to allow MA plans to offer supplemental benefits (items or services not covered by original Medicare) when they are “primarily health related,” offered uniformly to all enrollees, and result in the MA plan incurring a non-zero direct medical cost. “Primarily health related” means an item or service that is “used to diagnose, compensate for physical impairments, acts to ameliorate the functional/psychological impact of injuries or health conditions, or reduces avoidable emergency and healthcare utilization.” For 2019, CMS introduced new flexibility into the uniformity requirement by allowing MA plans to offer supplemental benefits to some—but not all—vulnerable enrollees.
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On Nov. 29, 2018, Deputy Attorney General Rod J. Rosenstein announced several amendments to policies on individual accountability set forth in the 2015 Yates Memo. As a result, companies facing FCA actions—especially defendants in health care cases—should consider following three strategy tips:  (1) Establish clear benchmarks for cooperation.  (2) Advocate for individual releases.  And (3)

In its recent notice of proposed rulemaking setting policy for Medicare Advantage (MA) and the Prescription Drug Program (PDP) for calendar year 2020, CMS announced that it would establish extrapolation as a method to be used in risk adjustment validation (RADV) audits, and further, that it would not make any adjustments to account for errors in Medicare fee for service data in determining recovery amounts.

CMS uses a risk adjustment process to modify MA plan payments to better reflect the relative risk of each plan’s enrollees. Payments to each MA plan are adjusted based on risk scores that reflect enrollees’ health status (categorized into Hierarchical Condition Categories (HCCs)) and demographic characteristics derived from member claims data. To counteract incentives that a plan might have to over-report enrollee diagnoses, CMS emphasizes that all diagnoses submitted to enhance risk must be documented in a medical record, and uses RADV audits to ensure that medical record documentation exists, and thus, that payments to MAOs accurately reflect the level of risk assumed.
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In the most recent technical changes made to Part C and Part D plans for 2019, CMS codified the star ratings methodology in regulations. Now, CMS is proposing changes to these regulations, such as new definitions to clarify the meaning of terminology used in describing the star ratings methodology. In addition, CMS is proposing several changes to improve program quality and accessibility of the Medicare Advantage (MA) and Part D Prescription Drug Program (PDP) Plan Quality Rating for measures other than Consumer Assessment of Healthcare Providers and Systems (CAHPS).

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On November 1, 2018, the Centers for Medicare & Medicaid Services (“CMS”) filed the pre-publication version of the CY 2019 Physician Fee Schedule Final Rule (“2019 PFS Final Rule”). Within this massive publication, CMS finalized two regulatory changes affecting the exceptions at 42 CFR § 411.357 to the Physician Self-Referral Law (also known as the “Stark Law”) for compensation arrangements. The 2019 PFS Final Rule reconciles the regulations with the statutory changes made to the Stark Law enacted by the Bipartisan Budget Act of 2018 (“2018 BBA”) with respect to (1) how arrangements may fulfill the “writing” requirement under the compensation exception and (2) how arrangements that initially proceed without a signed agreement may still meet the signature requirement of an applicable exception. Parties to financial arrangements in effect on or after February 9, 2018 that implicate the Stark Law may rely upon these new modifications.

The Stark Law generally prohibits a physician from making a referral of designated health services (“DHS”) to an entity with which he or she (or an immediate family member) has a financial relationship. Section 411.357 details several excepted compensation arrangements carved out from the “financial relationship” definition for the purposes of the Stark Law. These exceptions include arrangements for the rental of office space and equipment, bona fide employment relationships, group practice arrangements with hospitals, certain fair-market-value compensation arrangements, among others.
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CMS has finalized the adoption of multiple CPT codes in the CY 2019 PFS that create more opportunities for providers and digital health companies to collaborate on chronic care management business models in the fee-for-service market.

Virtual Check-Ins

CMS finalized the creation of a new code to reimburse providers for brief “check-in” services conducted using communications technology by creating HCPCS code G2012, defined as “[b]rief communication technology-based service, e.g. virtual check-in.”
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On October 15, 2018, the Centers for Medicare & Medicare Services (“CMS”) in the Department for Health and Human Services proposed a rule to require prescription drug manufacturers to post the Wholesale Acquisition Cost (“WAC”) for drugs and biological products covered by Medicare or Medicaid in direct-to-consumer television advertisements. The WAC reflects the manufacturer’s list price for a drug to direct purchasers, not inclusive of any discounts or rebates. CMS is proposing this rule in the context of broadcast advertisements, an area in which the Supreme Court has recognized that the government may take special steps to help ensure that viewers receive appropriate information.[1]

CMS stated that 47 percent of Americans have high-deductible health plans and that many patients may pay the list price of the drug until they meet their deductible. The proposed rule aims to provide greater transparency into the prices charged by prescription drug manufacturers. The theory is that markets operate more efficiently with greater transparency, and that increased exposure of the list price will also provide a moderating force to discourage price increases. While wholesale prices do not equate to the patient’s out-of-pocket obligation, CMS asserts that benefit designs are impacted by WACs, and patients in high-deductible plans may pay the full list price until meeting their deductible – thus, the WAC may still be relevant to many patient and impact their decisions and market dynamics. The price required to be posted would be for a typical course of treatment for an acute medication like an antibiotic, or a thirty day supply of medication for a chronic condition that is taken every month. The posting would take the form of a legible textual statement at the end of the ad and would not apply where the list price for a thirty day supply or typical course of treatment of a prescription drug was less than $35.
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On October 3rd, the United States Senate passed a bipartisan opioids package with a sweeping vote of 98 to 1, after the U.S. House of Representatives passed the final version of the bill with a vote of 393 to 8. One of its components, the “Fighting the Opioid Epidemic with Sunshine Act,” expands the scope