#6Things That Happened in Health Policy This Week

6 Things That Happened in Health Policy This Week is produced by a mix of research assistants from the Healthcare Quality & Outcomes (HQO) Initiative at the Harvard T.H. Chan School of Public Health. In each edition we feature a variety of news articles, reports, and studies focused on U.S. health policy and health services research. This week’s edition is from Stephanie Caty (@stephaniecaty), Yevgeniy Feyman (@yfeyman), Kim Reimold (@kimreimold), and Anthony Moccia (@anthony_moccia). 

NYT: Senate Democrats Block Zika Bill Over Planned Parenthood Provisions

  • After passing the House, Senate Democrats blocked a $1.1 billion Republican-driven Zika funding bill
    • Democrats cited concerns over language blocking Planned Parenthood from receiving funding to fight the disease
    • This is similar to legislation blocked this past June
    • The new bill was expected to resolve differences between a Senate plan and a House version
    • This level of funding would still be less than the White House’s $1.9 billion funding request
  • Funding for anti-Zika efforts is likely to be included in a stopgap funding measure that must be passed before the end of the month
  • The failure to pass the bill comes on the heels of the CDC announcing that most of its anti-Zika funding has been used up

KHN: Study Says Concerns About Orphan Drug Spending Are Unjustified

  • A new study in Health Affairs estimates that orphan drug spending hit $30 billion in 2013, representing 8.9% of total pharmaceutical expenditures
    • This represented an increase from 4.8% in 2007, that was driven by new approvals according to the authors
    • The study further projects that this share will remain stable, contra other reports that estimate an increase
  • Orphan drugs, those that treat rare diseases, tend to be high-priced sometimes costing $300,000 per year or more
  • The Orphan Drug Act (ODA’s), which provided a 7-year exclusivity for these therapies, is often credited with providing a strong incentive for development of these drugs
  • Critics, including America’s Health Insurance Plans (AHIP), an industry trade group, contend that this exclusivity is sometimes used to drive high prices outside of the orphan indication
    • Indeed, a prior study noted that the ODA incentives motivate companies to apply for orphan designation even when drugs are used for common conditions
    • That study found that 7 of the top 10 selling drugs had received orphan designation

Healthcare Informatics: CMS Tells Docs to “Pick Their Pace” for MACRA in 2017

  • In response to industry and recent Congressional push-back on the timeline for MACRA implementation, CMS has expanded the ways in which providers can participate
  • In addition to the two original pathways for participation CMS is adding two additional options for participation for a total of four possible options:
    • Option 1: In order to prepare for full participation in 2018 and 2019, physicians may submit some data to the Quality Payment Program, and in doing so, will avoid a negative payment adjustment
    • Option 2: Physicians may submit data for part of the year, starting after January 1, 2017, and may be eligible for a small payment increase based on quality metrics
    • Option 3: Physicians may participate in the Merit-Based Incentive Payment System for the full calendar year, as originally outlined in the MACRA proposed rule
    • Option 4: Physicians may participate in Advanced Payment Models, such as the Medicare Shared Savings Program, Track 2 or 3, as originally outlined in the MACRA proposed rule
  • The full rule is set to be released on November 1, 2016, which will give providers 2 months to prepare for initial quality reporting on January 1, 2017

Modern Healthcare: Hospital ORs waste nearly $3M a year in disposable medical supplies

  • Disposable medical supplies make up a large portion of Operating Rooms (OR) waste, which on average adds up to about 2,000 tons of waste per day
  • Recent study published in the Journal of Neurosurgery found that in UCSF’s neurosurgical department, on average wasted $968 of disposable medical devices per procedure, which adds up to about $2.9 million wasted per year
    • The study found that surgical waste varied by type of surgery and surgeon
    • James Yoon, lead author, in regards to unpredictability of surgery, states that “there are a lot of things we [surgeons] can’t foresee and those occasions are where waste can happen”
  • Some tactics to reduce disposable waste include:
    • Promotion of price transparency-showing surgeons their median surgical supply cost compared to other surgeons
    • Education of nurses and surgeons on degree of OR waste and true cost of items, in order to assist in determining what items are needed before procedures
    • And reprocessing single-use medical devices

Health Affairs: Medicare’s New Bundled Payment For Joint Replacement May Penalize Hospitals That Treat Medically Complex Patients

  • In April 2016, the Centers for Medicare and Medicaid Services (CMS) implemented an episode-based payment model called Comprehensive Care for Joint Replacement (CJR).
    • In this program, acute care hospitals in selected geographic areas are required to participate for all elective and eligible lower-extremity joint replacement surgeries.
    • This experimental program, which distributes bonuses or penalties (reconciliation payments) to hospitals based on the degree quality and cost targets are met, could unintentionally penalize hospitals for treating patients with more medically complex conditions.
  • Using Medicare claims of Michigan patients in 2011-2013, researchers calculated the net difference in reconciliation payments prior to and following risk adjustment.
    • Payments were reduced by $827 per episode for each standard-deviation increase in a hospital’s patient complexity.
    • Risk-adjusting payments could increase payments to some hospitals by nearly $115,000 and decrease others by more than $150,000.
  • These findings suggest that CMS should risk-adjust reconciliation payments for not only the CJR program, but also the three new episode payment models that are scheduled to debut next year.

The Wall Street Journal: Arizona’s Pinal County Gains Health-Law Exchange Insurer

  • Blue Cross Blue Shield (BCBS) of Arizona stepped up to the plate this week and agreed to offer plans on the Affordable Care Act exchange in Pinal County in Arizona, ensuring that every county in the U.S. has at least one insurer selling exchange plans.
  • The drama started last month when Aetna Inc. decided to no longer offer plans in Pinal County, where nearly 10,000 people had signed up to participate in ACA plans in order to obtain subsidies that make plans affordable for low-income consumers.
  • While a victory that Pinal County is now covered, many counties do not have enough options with 31% of counties with one exchange insurer. BCBS of Arizona Chief Executive Rich Boals agreed that “regulators and policy makers must find a way to stabilize the market and put long-term fixes in place.”

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