House Approves Compromise FY 2015 DoD Authorization

The House passed H.R. 3979, the National Defense Authorization Act (NDAA) for Fiscal Year 2015, which was named after the House and Senate Defense committees’ two retiring chairmen, Carl Levin (D-MI) and Howard P. “Buck” McKeon (R-CA). Among the provisions of the $513.4 billion compromise are those continuing the Defense Health Program and several related to military personnel health cost-savings (i.e. a one-time increase of $3 for pharmacy co-pays for retail prescriptions and mail-order non-generic prescriptions and a requirement that all non-generic prescription maintenance medications be filled through military treatment facility pharmacies or the national mailorder pharmacy program beginning next October). A military compensation and benefits commission is expected to report early next year on other long-term health and personnel cost-savings measures. The President’s pick to be the next Secretary of Defense, Ashton B. Carter, will have much to say about how much of the commission’s recommendations on health care and other issues will be promoted by the Administration. In other health-related news, the department said that the military has begun testing an isolation unit to treat and evacuate service members deployed to West Africa who become infected with the Ebola virus.

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House Passes ABLE Act and Defers on Additional Health Legislation

Last week the House approved and sent to the Senate H.R. 647, the Achieving a Better Life Experience Act of 2013 (or the ABLE Act), legislation that would allow state programs to establish tax-exempt ABLE accounts to assist individuals with a disability to pay for qualified disability expenses which include those related to health and wellness. The amounts in such accounts would be disregarded in determining eligibility for Medicaid and other meanstested federal programs. Some Democrats objected to the inclusion of Medicare cuts to offset $1.4 billion of the $2 billion ten-year cost of the legislation, including: $444 million for vacuum pumps used to treat erectile dysfunction; $365 million that would accelerate to 2016 the application of relative value targets for uncorrected (misvalued) overpayments under the Medicare physician fee schedule; and $380 million that would delay for one year, through December 31, 2024, the inclusion of oral-only drugs in the end-stage renal disease (ESRD) prospective payment bundle. The House also passed H.R. 5771, the Taxpayer Tax Increase Prevention Act of 2014, which would extend only through 2014 certain employer and individual tax breaks, including one that would allow individuals to make tax-free withdrawals from Individual Retirement Accounts (IRAs) to charitable organizations. Members who support the passage of a permanent fix to the current sustainable growth rate (SGR) mechanism under the Medicare physician payment system are resigned to the fact that their efforts will have to begin again early next year in an attempt to pass legislation before the temporary fix ends on March 31, 2015. In other news, the President signed into law H.R. 4067, legislation delaying until next January a Medicare supervision requirement for outpatient therapeutic services in critical access and small, rural hospitals.

PPACA Administrative Actions

In an effort to increase enrollment under the Patient Protection and Affordable Care Act’s (PPACA) exchanges, HHS encouraged individuals currently enrolled in plans to “shop” on the exchanges for new plans that might give them more value and higher tax credit subsidies. The Centers for Medicare and Medicaid Services (CMS) released a proposed rule under which accountable care organizations (ACOs) would be given more flexibility in renewing their participation, including in a new performance two-sided risk model for sharing in any savings or losses. The agency is seeking comment on this model and other changes, including beneficiary assignment, data sharing, eligibility requirements, participation agreement renewals, compliance and monitoring, and financial benchmarking and waivers for program and other payment rules. In related news, the CMS Office of the Actuary reported that U.S. health care costs grew 3.6% to $2.9 trillion in 2013 which they said was the smallest increase in more than 50 years and one that probably won’t be matched soon, as spending accelerates to meet the needs of millions of individuals who are expected to enroll under the PPACA. Also of note, HHS released information showing that hospital-acquired conditions--including falls, infections and adverse drug events--decreased by 17% between 2010 and 2013 which HHS said saved about 50,000 patients and $12 billion in health-care costs.

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