21st Century Cures Bill Passes Senate

Dive Brief:

  • The Senate voted 94-5 on Wednesday to pass the 21st Century Cures Act.
  • The legislative package will now head to President Obama’s desk, who is expected to sign the bill into law.
  • Over the course of 10 years, the Cures bill authorizes the National Institutes of Health to spend $4.8 billion toward funding the Cancer Moonshot ($1.8 billion) and the precision medicine and the BRAIN Initiative efforts ($3 billion).

Dive Insight:

The sweeping bill has a lot going on within its 996 pages and is not without controversy. About three years of work and efforts from 1,400 lobbyists for 400 companies went into the making of this $6.3 billion package. It seeks to deliberately speed medical research and treatments.

Sen. Elizabeth Warren (D-MA) and Sen. Bernie Sanders (I-VT), had previously stated they think the bill is too favorable to pharmaceutical companies and while Cures authorizes the $4.8 billion spending for NIH, the actual money must be appropriated by Congress. This means the NIH funds must get fresh approval every year. In addition, Cures authorizes the FDA to receive $500 million to help speed up product approval processes, which some critics say weakens safety and efficacy standards. For example, when drug makers seek to expand approvals for their marketed products, they will be allowed to include “real world evidence” rather than additional placebo-controlled trials in their applications.

The legislation also clarifies low-risk medical devices will not be regulated as a medical device under the FDA. This includes your FitBits, your smart shirts that can track your physical activity or your EHRs for that matter. This is important from a health IT developer perspective, Stephanie Zaremba, director of government and regulatory affairs at athenahealth, told Healthcare Dive, as investors won’t face the uncertainty that the health app could be blocked by the FDA before gaining a return on investment.

“Giving certainty is really important for investing purposes,” Zaremba says, noting she believes such a law will help get more innovative, low-risk technology in patients’ hands.

An interesting analysis from Stat’s Sheila Kaplan notes the package lacks a fair number of deadlines for some of its implementations when it comes to changes at the FDA.

Source: http://news.medprocomp.com/wp-admin/post-new.php

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Iowa Dental Chain Settles Federal Whistleblower Lawsuit

An Iowa dental office chain has settled a whistleblower lawsuit alleging Medicaid fraud.

The Des Moines Register reports  that Lifepoint Dental Partners, which has five clinics in Iowa, agreed to pay $300,000 to settle the lawsuit filed in April by federal prosecutors and the company’s former chief financial officer, Todd Willson, and a former financial coordinator, Peggy Lemley. Willson and Lemley will receive $45,000.

Willson says he was fired after reporting unnecessary procedures or those that hadn’t been performed being billed to Medicaid. Lemley said she, too, was fired after reporting fraudulent claims.

Lifepoint’s attorney, Sarah Franklin, issued a written statement Wednesday saying the federal investigation involved the actions of other employees who were fired last year. Lifepoint did not admit wrongdoing as part of the settlement.

Source: http://www.dailyprogress.com/iowa-dental-chain-settles-federal-whistleblower-lawsuit/article_46d4b8d7-ae2c-5a57-b387-6acf894dbe3e.html

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FLSA Overtime Rule Hearing Decision Expected Next Week

18866181_lUPDATE: A ruling is expected to be issued on November 22, National Law Review reported. Another hearing trial could be set on November 28 if the motion is denied, NLR reported. This doesn’t leave much time to wait out whether the rule will stay in place or not. Thus, it’d be best to prep a plan now for adhering to the rule, slated to go into effect December 1.

Dive Brief:

  • The scheduled hearing over the motion for preliminary injunction for the FLSA overtime rule will take place Nov. 16, Politico reported. It is scheduled just over two weeks before the Dec. 1 deadline.
  • U.S. District Court Judge Amos L. Mazzant III was appointed by President Barack Obama, who originally called for the rule change, causing court experts to claim that it is unlikely the injunction will pass, Maynard Cooper Gale notes in its report.
  • President-elect Donald Trump has not said specifically what he will do about the overtime rule changes, Politico reported. In the past, he has called for a potential small business exemption or a delay for certain types of businesses of the rule’s implementation.

 Dive Insight:

The Department of Labor’s (DOL) final overtime rule raises the salary threshold to qualify for overtime from $23,660 to $47,476, affecting 4.2 million Americans. An estimated 200,000 hospital workers and 300,000 non-hospital healthcare workers will be directly affected, according to the DOL.

Judge Mazzant consolidated the separate lawsuits from 21 states and several employer groups into one case, which will be heard Wednesday.

The call for preliminary injunction is likely the last stand for opponents of the rule. Bills exist in Congress to delay the regulations, but it is unlikely they will be passed before the deadline. Even if they did, President Obama would veto any such legislation that made it to his desk.

As usual, most experts are advising employers to prepare for the rule regardless of the outcome. That advice has not yet changed, even with an incoming Trump administration.

Armin Moeller, a partner with Balch & Bingham, recently told Healthcare Dive DOL gives employers four options to comply:

  1. Raise salaries above the $47,476 threshold so that workers remain exempt from overtime;
  2. Keep wages at the current level and pay workers time and a half when they work more than 40 hours in a given week;
  3. Restructure workloads and shifts to avoid overtime; or
  4. Adjust salaries downward to offset overtime costs.

Source: http://www.healthcaredive.com/news/flsa-overtime-rule-to-face-hearing-nov-16-1/430455/

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Obama Administration Disperses Last of Grants to Fund Health Information Exchanges

10872771_lWith its economic stimulus funds dwindling, the out-going Obama administration is still backing health information exchanges meant to spur better patient care.

Using leftover money from a $2 billion appropriation, the Office of the National Coordinator for Health Information Technology at HHS awarded grants totaling nearly $2.4 million to four state HIEs.

The Delaware Health Information Network and the Oregon Health Authority each received $625,000, the Rhode Island Quality Institute received $489,544, and the Utah Health Information Network got $624,604.

The Delaware HIN serves 60 hospitals in Delaware and Maryland, and will use its grant—it’s third from the ONC—to connect with counterpart HIEs in New Jersey and southeastern Pennsylvania, said Randy Farmer, its COO.

That will enable Delaware hospitals to send and receive patient admission, discharge and transfer (ADT) notifications with other healthcare providers.

Salt Lake City-based UHIN will use its money to create a more robust provider directory, enhance its patient portal capabilities and expand its ability to send hospital ADT notices to healthcare organizations in Idaho, Nevada and Wyoming.

Linking state and local HIEs to create a nationwide “network of networks” has been a federal goal since the George W. Bush administration founded the ONC in 2004.

But the feds’ HIE program has seen both winners and losers, according to an independent report released earlier this year by the research agency NORC at the University of Chicago.

The number of acute care hospitals able to “push” an electronic message to another provider’s EHR increased nearly tenfold from just over 100 hospitals in 2011—when the ONC exchange grants were first awarded—to just under 1,000 in 2013, according to the NORC report.

Acute-care hospitals capable of more advanced “query-based” information exchanges increased from fewer than 400 in 2011 to 2,000 by 2013, the research group said.

But HIE leaders also expressed concerns about their organizations’ long-term financial viability, NORC researchers found, while seven of the 56 original participants in the ONC’s HIE grant program have already gone belly up, according to the report.

Source: http://www.modernhealthcare.com/article/20161114/NEWS/161119973?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue%3A+2016-11-15+Healthcare+Dive+%5Bissue%3A8023%5D&utm_term=Healthcare+Dive

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Is Paul Ryan Already Eyeing Medicare Cuts?

13159715_lHouse Speaker Paul D. Ryan said Thursday that Medicare has “serious problems” that would need to be addressed when Congress moves to repeal and replace President Obama’s health-care reform law — a signal that he is willing to immediately enter the treacherous politics of entitlement reform and perhaps break with President-elect Donald Trump.

“When Obamacare became Obamacare, Obamacare rewrote Medicare, rewrote Medicaid, so if you’re going to repeal and replace Obamacare, you have to address those issues as well,” he said in a Fox News Channel interview. “What people don’t realize is that Medicare is going broke, that Medicare is going to have price controls. Because of Obamacare, Medicaid is in fiscal straits. So you have to deal with those issues if you’re going to repeal and replace Obamacare. Medicare has got some serious problems because of Obamacare. Those things are part of our plan to replace Obamacare.”

Ryan spokeswoman AshLee Strong declined to comment further on Ryan’s plans for Medicare and Medicaid, but he has long advocated major changes to both programs that could reduce their costs — and their benefits for poor and elderly Americans.

Ryan (R-Wis.) specifically cited the Independent Payment Advisory Board, a body created under the Affordable Care Act that has the power to recommend cuts in the level of government’s payments to providers who participate in Medicare. It is set to start wielding its powers next year, and while Obamacare’s backers say the board is an important tool for reining in health-care costs, conservatives see it as an infringement on the free market that could lead to the rationing of care.

The “Better Way” policy package that Ryan drafted earlier this year with the aid of his fellow House Republicans proposed a broad package of proposed Medicare reforms, ranging from the repeal of the IPAB to expanding the privately managed Medicare Advantage program to a full-blown overhaul of the Medicare system into a “premium support” model.

That would involve transforming Medicare from a largely single-payer federal program to a private model where seniors would be federal subsidies to buy private insurance —similar to the subsidies available to younger Americans who can now buy insurance on the ACA-mandated state marketplaces.

“This reform ensures affordability by fixing the currently broken subsidy system and letting market competition work as a real check on widespread waste and skyrocketing health-care costs,” the GOP plan says. Ryan has included a premium support model as part of the budget proposals he put forth as chairman of the House Budget Committee, calling them necessary to stabilize the nation’s long-term fiscal outlook.

But any radical changes to Medicare have historically been deeply unpopular. Trump, by and large, stayed far away from proposing Medicare cuts during the campaign. His health policy platform, for instance, does not make any mention of Medicare amid its promises to repeal Obamacare. It does, however, support “block-granting” Medicaid — that is, changing the federal health program for the poor from an open-ended, formula-based system with strict rules on benefits to a lump-sum model in which states would have great leeway to reduce or supplement benefits.

Last year, Trump briefly said he would consider a plan supported by GOP rival Ben Carson that would have seniors rely on health savings accounts to finance their care before reversing course and saying he was wary of Medicare changes.

“Abolishing Medicare, I don’t think you’ll get away with that one,” he said. “It’s actually a program that’s worked. It’s a program that some people love, actually.”

In a 2013 speech to the Conservative Political Action Conference, Trump said, “As Republicans, if you think you are going to change very substantially for the worse Medicare, Medicaid and Social Security in any substantial way, and at the same time you think you are going to win elections, it just really is not going to happen.”

But his new transition website includes a revised health policy agenda that could encompass the sorts of changes that Ryan has proposed. “Modernize Medicare, so that it will be ready for the challenges with the coming retirement of the Baby Boom generation — and beyond,” the document reads. “Maximize flexibility for States in administering Medicaid, to enable States to experiment with innovative methods to deliver healthcare to our low-income citizens.”

As for whether Medicare is “going broke,” the program’s trustees say that the “Part A” trust fund — the costliest component of Medicare, covering hospital visits — is set to become insolvent in 2028. In 2009, before the passage of the Affordable Care Act, however, the trustees projected that fund would be insolvent in 2017.

The latest projections from the nonpartisan Congressional Budget Office show that Medicare spending is set to rise from the current level of about 3 percent of gross domestic product to more than 5 percent of GDP in 2040. But that is considerably less growth than the CBO projected before the passage of the Affordable Care Act, which showed Medicare spending in the realm of 7 percent around 2040. In the next 10 years alone, the difference between those projections could amount to $2 trillion, according to an analysis by the liberal Center for American Progress.

“Both in the aggregate and on a per capita basis, Medicare spending growth has slowed in recent years,” the nonpartisan Kaiser Family Foundation said in a July report. “While spending is expected to continue to grow more slowly in the future compared to historical trends, there are signs that spending growth could increase at a faster rate than in recent years, in part due to rising prescription drug spending, growing enrollment in Medicare, increases in provider payments, and higher growth in input prices for medical care.”

Fox anchor Bret Baier asked Ryan about “entitlement reform” generally Thursday, and while he readily proposed reforms to Medicare and Medicaid, he appeared much less eager to propose changes to Social Security. “Fiscal pressures are mounting faster on health care than they are on Social Security,” he said.

Source:  https://www.washingtonpost.com/news/powerpost/wp/2016/11/11/is-paul-ryan-already-eyeing-medicare-cuts/

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Mother, Son Face Prison Time for Pharmacy Fraud

25678567_lA mother and son based in Miami were sentenced today to 120 months and 30 months in prison, respectively, for their roles in spearheading a $9.5 million health care fraud conspiracy that targeted Medicare Part D.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services-Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.

Niurka Fernandez, 54, and Roberto Alvarez, 26, each pleaded guilty on Aug. 31 to one count of conspiracy to commit health care fraud.  In addition to imposing today’s prison sentences, U.S. District Judge Federico A. Moreno of the Southern District of Florida ordered Fernandez to pay $9.5 million in restitution and to forfeit the same amount.  Judge Moreno also ordered Alvarez t to pay $1.5 million in restitution and to forfeit the same amount.

As part of her guilty plea, Fernandez admitted that she co-owned and operated several pharmacies in the Miami area, including Calan Pharmacy & Discount Service LLC (Calan Pharmacy) and Bertyann Corp., doing business as Best Pharmacy, for the purpose of submitting false and fraudulent claims through Medicare Part D.  Fernandez was an organizer and leader of the Medicare fraud scheme that paid Medicare beneficiaries and patient recruiters for prescriptions that were medically unnecessary, according to the plea agreement.  Fernandez further acknowledged that she directed her co-conspirators at Calan Pharmacy and Best Pharmacy to make kickback payments and write and cash checks for the purpose of facilitating kickback payments and concealing fraud proceeds.  Fernandez is also linked to several other Medicare fraud schemes.

As part of his guilty plea, Alvarez admitted that he participated in the Medicare fraud conspiracy at Best Pharmacy.  Among other things, Alvarez admitted he wrote checks from Best Pharmacy to money launderers in order to obtain cash to pay the kickbacks to the Medicare beneficiaries.

In her plea documents, Fernandez admitted that she caused at least $9.5 million in losses to Medicare, while Alvarez conceded he caused a loss of at least $1.5 million.  In total, Medicare paid at least $9.5 million in overpayments as a result of the health care fraud scheme.

Source: https://www.justice.gov/opa/pr/mother-sentenced-120-months-prison-son-sentenced-30-months-prison-involvement-95-million

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Senators Demand Mylan Repay $50M to the Pentagon for EpiPen

13159715_lA group of senators wants to know if Mylan Pharmaceuticals will refund $50 million for charging the Department of Defense “exorbitant rates” at retail pharmacies for the EpiPen emergency allergy device.

Their demand followed a Reuters report last week that Pentagon spending on EpiPen rose to $57 million over the past year from $9 million in 2008. The increased spending was due to price hikes and increased sales volume, but also due to lower rebates Mylan paid the Defense Department. And Mylan paid lower rebates because the company misclassified the device as a generic instead of a brand-name product.

Although the medicine in EpiPen, epinephrine, is a generic, the device that delivers the treatment is a brand-name, patented product. Mylan, however, had been reporting EpiPen as a generic product to government agencies for nearly a decade. This distinction is important, because these classifications are used to determine the size of rebates that companies pay.

The EipPen misclassification first emerged in connection with rebates paid to Medicaid, and Mylan recently agreed to a $465 million settlement. From 2011 to 2015, Medicaid paid $797 million on EpiPen, after rebates and dispensing fees, but the Centers for Medicare & Medicaid Services said the federal and state health care program for the poor should have spent much less.

“We are alarmed that Mylan may have overcharged our military for this life-saving drug,” Senators Chuck Grassley (R-Iowa), Amy Klobuchar (D-Minn.) and Richard Blumenthal (D-Conn.) wrote in their letter to Mylan chief executive officer Heather Bresch.

“In light of Mylan’s misclassification, the US Department of Veterans Affairs previously determined the EpiPen to not be eligible for the DoD retail refund program. As a result, DoD appears to have paid in excess of $50 million for the product over nearly a decade.”

Noting that Mylan previously indicated plans to “‘move forward and bring resolution to all EpiPen Auto-Injector related matters,’ it is imperative that you quickly resolve this additional discrepancy and take steps to refund our military for past overpayments,” they continued. “… We urge you to right this wrong quickly and completely.”

We asked Mylan for comment and will pass along any reply.

We should note that these are the same senators who recently asked the Justice Department to investigate whether Mylan violated the False Claims Act by “knowingly” misclassifying EpiPen as a generic instead of a brand-name product.

Separately, West Virginia Attorney General Patrick Morrisey last week called the $465 million “woefully deficient” compared with the “fraud” perpetrated by the drug maker and urged the Department of Justice not to follow through with the deal. And last month, Senator Elizabeth Warren (D-Mass.) called the deal “shamefully weak,” because it failed to hold Mylan accountable and allowed the company to deny any wrongdoing.

Source: https://www.statnews.com/pharmalot/2016/11/07/mylan-epipen-pentagon-medicaid/

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Feds Probing Express Scripts’ Relationships with Drugmakers, Specialty Pharmacies

8532826_lFederal investigators are looking into Express Scripts’ dealings with pharma companies, charitable foundations and specialty pharmacies.

The nation’s largest pharmacy benefit manager on Tuesday revealed it received a civil investigative demand in August from the U.S. Attorney’s Office for the Southern District of New York asking for information about the firm’s relationships with drug makers and prescription drug plan clients and how payments to and from both work.

Express Scripts also received a subpoena in September from the U.S. Attorney’s Office for the District of Massachusetts office requesting information about its relationship with drug makers, independent 501(c)(3) charitable foundations providing cost-sharing assistance to federal health care program beneficiaries and specialty pharmacies.

“Given the ongoing focus on drug pricing, it is no surprise that the pharmaceutical industry, and by extension our industry, will receive inquiries like these,” an Express Scripts spokesman said in a statement. He said Express Scripts intends to fully cooperate with the requests.

A spokesman for the U.S. Attorney’s Office for the Southern District of New York said the office cannot comment on subpoenas or whether they are sent.

St. Louis-based Express Scripts is the largest pharmacy benefit manager in the country with more than $102 billion in annual revenue. PBMs are the behind-the-scenes middlemen in the drug industry who negotiate drug benefits and pharmacy services with pharmaceutical manufacturers to secure discounts and rebates, often by choosing one drug maker to include in the network over another. But it’s unclear how much of the savings PBMs pocket and how much they pass on to clients.

PBMs recently have been taking heat for playing a part in the skyrocketing price of some prescription drugs, or at least not doing enough to thwart the price hikes. The controversy surrounding the high price prescription drugs and who’s to blame has roiled this year, and was most recently reignited over drug maker Mylan’s 550% increase in the list price of commonly-used and life-saving Epipen epinephrine auto-injectors over eight years. Angry lawmakers, insurers and consumers have demanded answers, and much of the blame has landed on the middlemen.

Express Scripts is also dealing with an ongoing dispute with insurer Anthem, which filed a nearly $15 billion lawsuit suit in March alleging the PBM’s pricing exceeds competitive benchmark pricing by more than $3 billion annually. Express Scripts in April filed a lawsuit in return claiming that Anthem failed to negotiate in good faith. Anthem in July filed a motion to dismiss two counts of Express scripts’ claims, and Express Scripts in August filed a brief in opposition, according to the SEC filing.

Source: http://www.modernhealthcare.com/article/20161026/NEWS/161029937?utm_source=modernhealthcare&utm_medium=email&utm_content=20161026-NEWS-161029937&utm_campaign=hits

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2017 Trial for Alleged Leader in $1B Health Care Fraud

5739452_lA fall 2017 trial date is set for a South Florida businessman accused of orchestrating a $1 billion Medicare and Medicaid fraud scheme.

Court records show a Miami federal judge on Wednesday scheduled 48-year-old Philip Esformes’ trial for Sept. 18. Esformes, who has pleaded not guilty, faces a potential life prison sentence if convicted of multiple fraud, conspiracy and other charges.

Authorities say Esformes ran 30 nursing homes and assisted living facilities that used a network of corrupt doctors and hospitals to refer thousands of patients to the facilities, even though they did not qualify for services. Esformes and others also allegedly got kickbacks for steering patients to other health centers.

The Justice Department says it’s the largest health fraud case in U.S. history.

Source: http://abcnews.go.com/US/wireStory/fall-2017-trial-alleged-leader-1b-health-care-43266841

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CHS Ups Hospital Divestitures to 17

12028461_lCommunity Health Systems is now working on seven transactions to sell 17 hospitals, its home-care business and other real estate, CEO Wayne Smith said during a third-quarter earnings call with analysts Wednesday.

The developing divestitures have combined revenue of about $2 billion and should yield net proceeds of about $1.2 billion, Smith said.

Some of the deals could be announced this quarter with others revealed by the second half of next year, he said.

CHS has been divesting assets to reduce a crushing debt of $15 billion, among the highest for investor-owned hospital companies nationally.

The company also is bleeding red ink, missing analyst expectations in the third quarter with a net loss of $79 million compared with net income of $52 million in the prior-year quarter.

CHS’ 159 hospitals also saw admissions during the quarter decline 2% on a same-hospital basis, the company said. CHS is the nation’s second-largest investor-owned hospital company.

“Our inconsistent performance is simply not good enough,” Smith said.

With its high debt level, CHS is exploring hospital divestitures, including the possible sale of the entire company.

Smith said the company’s strategic review is still ongoing with Wall Street financial advisers, but he said CHS would not discuss specifics.

The 17 hospitals for sale are in addition to four rural hospitals that CHS has already agreed to sell and the April spinoff of 38 small and rural hospitals into a separate company, Quorum Health Corp.

The rural hospital operator has struggled to digest its $7.6 billion acquisition of Health Management Associates in 2014.

Of the four hospitals recently sold, three are in Mississippi and one in Florida.

The hospitals, all part of the original HMA deal, were sold to not-for-profit Curae Health of Clinton, Tenn. Terms were not disclosed.

CHS said last quarter, before announcing its deal with Curae, that it had five prospective buyers for 12 hospitals. Since then, CHS also has announced the sale of 80% of its home care division for $128 million. CHS CFO Larry Cash said during the earnings call Wednesday that a real estate investment trust is among the prospective new buyers of CHS assets, adding that the target assets would be CHS medical office buildings or diagnostic centers rather than hospital real estate.

Revenue in the third quarter fell 9.6% to $4.38 billion from $4.85 billion in the same period last year. The lost revenue was mostly due to CHS spinning off the Quorum hospitals, but CHS is still struggling to hold volumes at its HMA hospitals.

Cash said admissions and surgeries were down about 4% in the third quarter at the 61 hospitals that CHS retains from the 2014 HMA deal. By contrast, surgeries at its 91 legacy hospitals, or those owned before HMA, were up 1%, while admissions fell 1%.

Source: http://www.modernhealthcare.com/article/20161102/NEWS/161109970

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