21st Century Cures – in-depth

December 5, 2016

21st Century Cures – in-depth

On Nov. 30, the House of Representatives passed the 21st Century Cures Act by a vote of 392-26. The bill now goes to the Senate where it is expected to receive a vote the week of December 5th. President Obama has indicated that he would sign the bill should it reach his desk.

On Friday, Nov. 25, Congressional negotiators announced a new version of the 21st Century Cures Act. The House of Representatives originally passed an initial version of the bill in 2015. However, the Senate was not as eager and tried to negotiate a scaled down version of the House-passed bill. The negotiations produced the bill that was released on Nov. 25.

The main purpose of the bill is to boost funding for the National Institutes of Health (NIH) and to streamline the Food and Drug Administration’s (FDA) approval process for new drugs, devices and other therapies. The new version would cost $6.3 billion which is less than the $9.3 billion included in the original House-passed bill. $4.8 billion of this is to be dedicated to continuing the NIH Precision Medicine Initiative, the NIH Cancer Moonshot Initiative and the NIH Brain Research through Advancing Innovative Neurotechnologies Initiative.

$500 million is allocated to the FDA. The reforms made to the FDA drug approval process include streamlining data collection for patient experiences with new drugs and an expedited approval pathway to bring “breakthrough” drugs and devices to market sooner. The bill would also boost FDA hiring authority for researchers and product reviewers to help speed the approval process.

The new version also features several other provisions including $1 billion to be awarded as grants to states to combat opioid addiction, a section on mental health reform and several other notable provisions related to the Medicare program.

Below is a summary of key provisions of the legislation.

Improving transparency of Medicare local coverage determinations

Medicare Administrative Contractors (MAC) have the authority to establish local coverage determinations (LCD) for their jurisdictions. The bill would require MACs to post LCDs in their entirety on a website at least 45 days before the effective date. This posting must include information about when the determination was initially made public, hyperlinks to the proposed determinations and the comments received by the MACS. The posting must also include a summary of the evidence and rationale that was considered in the making of the determination. This section is effective as of 180 days after the bill’s enactment.

Establishing a definition for “interoperability” and “information blocking”

The bill establishes a formal definition of “interoperability” of Electronic Health Records (EHR) as health information technology that is able to seamlessly function in concert with other health information technology and does not constitute information blocking. This section promotes the use of such technology. Further, it defines information blocking as a practice that is likely to interfere with or prevent access and exchange of electronic health information. Information blocking can be on the part of health information technology developers or health care providers. Information blocking includes any technology that impedes innovation or is likely to lead to fraud, waste and abuse.

Additionally, the bill requires HHS to develop a strategy for reducing the documentation burdens of EHRs on health care providers. It also would create a grant program to develop a stakeholder reporting system to collect information on EHR usability, interoperability and security to help providers choose an EHR product.

Medicaid program integrity

Beginning on July 1, 2018, the bill would require states to notify HHS when it terminates a provider from its state Medicaid program. States would be required to include information about that provider such as name, specialty type, date of birth, social security number, Tax ID number and the reason for termination from the state Medicaid program. This is intended to make it harder for a provider who is terminated from one state’s Medicaid program from enrolling in another state’s program. The law also requires states to maintain an updated public directory of providers enrolled in state Medicaid programs.

“Transitional” risk adjustment methodology for hospital readmissions reduction program

The bill would require CMS to implement a transitional risk adjustment methodology to serve as a proxy of socio-economic status for the Medicare Hospital Readmissions Reduction Program (HRRP). The transitional policy would apply to discharges occurring during and 12 months after fiscal year 2019.

Under this transitional methodology, CMS would be required to develop and implement a methodology for grouping hospitals by their dual-eligible populations for purposes of evaluating the performance of hospitals under the HRRP. This is intended to “level the playing field” so that hospitals that treat large dual-eligible populations are measured against each other rather than against hospitals that treat much smaller dual-eligible populations. Currently, all hospitals are compared to each other, regardless of each hospital’s unique patient population. CMS would be allowed to consult with MedPAC to develop this methodology.

CMS would be permitted to develop a more refined risk adjustment methodology after it considers the forthcoming HHS Assistant Secretary for Planning and Evaluation report on risk adjustment.

The bill also prohibits CMS from imposing additional reporting requirements on hospitals to implement this provision. This new methodology for grouping hospitals based on the risk of their patient populations is also required to be budget neutral.

Finally, the bill requires MedPAC to conduct a study to review overall hospital readmissions and whether readmissions are related to any changes in outpatient and emergency services furnished.

This policy was originally proposed in a House-passed bill called the Helping Hospitals Improve Patient Care Act. The bill was never brought up for a vote in the Senate. This policy only impacts hospitals but perhaps this concept can be applied at the physician level, such as grouping physicians by dual-eligible population when determining their performance and payment adjustments under MIPS.

Update to Welcome to Medicare Package

The bill requires CMS to update the Welcome to Medicare package it supplies to soon-to-be eligible Medicare enrollees. CMS would be required to request recommendations from stakeholders on information that should be included in the package within six months of the bill’s passage.