HIDA Health Reform Update

Edition: April 2014 - Vol 22 Number 04
Article#: 4462
Author: Linda Rouse O’Neill

The following update by the Health Industry Distributors Association (HIDA) is designed to keep healthcare distributors and other key stakeholders current on the latest government-affairs related topics.

CMS weighs public comments on competitive bidding

Medicare’s competitive bidding program for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) is currently in effect in 100 metropolitan areas throughout the country. Given that the average price for products in this program, including enteral nutrition, was cut by over 40 percent, it is important to ensure its nationwide implementation is as fair as possible.

The Centers for Medicare & Medicaid Services (CMS) recently solicited comments from stakeholders as part of its preparation for competitive bidding’s nationwide expansion, slated for 2016.

Specifically, CMS is reviewing feedback regarding potential modifications to the competitive bidding program’s payment rules and methodologies -- such as bundling payments into one monthly payment for suppliers based on submitted bids -- that could be applied to future rounds.

For areas not competitively bid, CMS requested feedback on proposed payment and pricing methodologies to determine whether Medicare’s current durable medical equipment fee schedule should be adjusted to accommodate competitive bidding payments.

HIDA submitted comments and encouraged members to weigh in with the agency as well. Expect more information to be forthcoming as CMS reviews received feedback.

FDA asks for input on drug traceability implementation

The recently enacted Drug Quality and Security Act of 2013 was a major win for supply chain stakeholders, establishing a law that seeks to ultimately build an electronic system to track and trace prescription drugs within the U.S. to enhance patient safety and supply chain integrity.

There’s more work to be done, however, as the Food and Drug Administration (FDA) is now asking for comments on transaction data exchange standards for pharmaceuticals moving throughout the supply chain per the “pedigree” law’s framework.

Specifically, the FDA is requesting input from all drug supply chain stakeholders -- including manufacturers, repackagers, wholesale distributors, and dispensers (i.e., pharmacies) -- on how best to comply with new trading partner exchange requirements on Jan. 1, 2015 through transaction statements, transaction history, and transaction information. The agency is also seeking feedback on challenges and obstacles to data sharing and notifications of suspect product.

Supply chain stakeholders have until April 21 to provide input. Be on the lookout as HIDA will be submitting detailed comments and providing a template for members to utilize in drafting their own comments.

Congress offers deal for SGR replacement

Doctors received good news when, as part of the 2013 budget agreement, Congress passed a 90-day "patch" to delay a 16.7 percent reduction to the physician sustainable growth rate (SGR) payment formula and an overall 20.1 percent reduction in Medicare reimbursement payments for physicians.

The Senate Finance, House Ways & Means, and House Energy & Commerce Committees then proposed a bipartisan, bicameral policy deal to repeal and replace the SGR formula at a cost of $128 billion. This new formula updates physician Medicare reimbursement payments by 0.5 percent over the next five years, incentivizes the patient-centered medical home, and rewards value and quality care.

Unfortunately, it is unlikely that a bicameral and bipartisan deal on the offset will be struck by the end of March, so by the time you read this it is more likely that Congress will have passed another “patch” through the end of 2014. Any future SGR repeal actions will be likely tabled until after the election, so it appears to be ‘wait and see’ once again for a more permanent solution.

For more information on these and other HIDA Government Affairs topics, visit us at www.HIDA.org or contact us at HIDAGovAffairs@hida.org.