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February 2017 Newsletter

In this Issue…

Notes from Joe
· Washington Update

Washington Update
· Affordable Care Act Update: What’s Really Happening?
· New Safe Harbor to the Anti-Kickback Statute for Local Transportation Services

Alliance Reminders
· Mark Your Calendars for Alliance Meetings in 2017!
· The Hemophilia Alliance Team Members

Notes from Joe

Washington Update
By Joe Pugliese

From the ACA to the COPD rule to 340B to the AKS, the alphabet soup of policy issues coming out of Washington means that we are living in a time of considerable uncertainty. We’ve decided to do a special edition of the Alliance Newsletter this month to focus on these issues: we will explain what is happening and how it may affect HTCs.

The first thing to know is that the long-dreaded Mega Guidance was sent back to HRSA from the Office of Management and Budget at the 11th hour. The guidance was withdrawn as a matter of routine when the new administration came in, so it could review all proposed regulations that have not yet taken effect. It was that or they decided our brilliantly crafted comments and common sense recommendations deserved more consideration. As a reminder, you can find the comments that we submitted on the Mega Guidance on the Alliance website. It’s not clear if and when the Mega Guidance might reemerge. There is no indication that the 340B Program is of immediate great interest to the new administration and Congress. However, we know that there continues to be interest among many for legislative or regulatory changes to the program. We will continue to monitor and advocate to protect HTCs.

We are not waiting to see what happens next. We continue to work with all members of the 340B Coalition to advocate on our collective behalf. The Coalition will be hosting a Congressional briefing this spring. We welcome support from all organizations that have an identifiable mission and are transparent about who is underwriting their efforts. As a reminder, the 340B Matters organization has been unable or unwilling to provide this information, and so we strongly suggest not engaging with them.

Next, you received an email from me last week with an update and call to action regarding Medicaid changes as a result of the implementation of the Covered Outpatient Drug Rule. The update is available here if you have any questions for how to connect with your Medicaid agency or how to advocate for adequate reimbursement for your HTC, please contact me.

As the debate over the repeal and replacement of the ACA continues to swirl in Washington, please read on for an article with an update about where things stand and what to expect for the policies that are most important to HTCs and the patients we serve. There’s also an article about a recent change to the Anti-Kickback Statute (AKS) that will allow you to provide local transportation services to your patients in certain cases.

Your Alliance team is hard at work navigating and interpreting all of this chaos to assist HTCs, but your advocacy is needed now more than ever. One more request: please clear your calendar, pack your bags, and join us in DC on May 3-4, for our 5th annual Washington Days. There’s no time like the present to make your voice heard!

Washington Update

Affordable Care Act Update: What’s Really Happening?
By Johanna Gray

There is a lot of concern and confusion about what is happening in Washington with the debate to repeal and replace (or repair and rebrand?) the Affordable Care Act (ACA). Here’s what you need to know:

What has happened so far?

On the side of the Trump Administration, a few things have happened:

  • One of President Trump’s first Executive Orders related to the ACA. The order directs federal agencies “to the maximum extent permitted by law” to relax ACA policies that impose burdens on individuals, insurers, hospitals, doctors and pharmaceutical companies and to give greater flexibility to states. Basically, he directed HHS to begin to unwind the law to the extent to which HHS has discretion regarding the implementation of specific policies, but they can’t do anything that contradicts the law. Since the text of the law itself includes so many provisions, it is hard to say exactly what agencies will do as a result.
  • Meanwhile, the Trump Administration has released two regulations that seek to stabilize the insurance market for the 2018 plan year. Insurers have expressed a lot of concern over the uncertainty surrounding the ACA, which makes it difficult for them to set rates for next year and even to decide whether and how to participate in the ACA Marketplaces.
  • Finally, Dr. Tom Price (a former Representative from Georgia and orthopedic surgeon) has been confirmed as HHS Secretary. The Administration is expected to release its own ACA repeal and replace plan now that Secretary Price is confirmed, though it has not yet been released.

More activity has occurred in Congress:

  • In January, Congress passed a budget reconciliation bill that directs four Congressional Committees to draft the ACA Repeal bill. The benefit of using the reconciliation process is that only 51 votes are required to pass the repeal bill in the Senate (rather than the 60 votes required to cut off a filibuster). Since there are only 52 Republicans in the Senate, and at least as of now it appears as though no Democratic Senators will vote for the repeal bill, this is an important procedural advantage. But, there are strict rules regarding what can be included in the bill: only provisions that affect federal spending (such as programs) and revenues (such as taxes) may be included. This means that the entire ACA cannot be repealed by reconciliation. More details about what we expect to be included may be found in the next section.
  • As directed by the reconciliation bill, members of Congress and their staff are now hard at work on drafting the legislation. A number of repeal and replace plans have been released by members of Congress. They don’t agree on many details, but there are some common themes, which will be discussed below. Congressional Committees are starting to hold hearings on the various options, as well.

What do we anticipate will be in the repeal legislation?

Congress has voted many times in recent years to repeal parts of all of the ACA, which were always vetoed by President Obama. We understand that the House repeal bill will use the 2015 repeal bill (HR 3762) as a base with a few additional policies layered on. This legislation also used the reconciliation process, so it makes sense that this is the base. The bill repealed:

  • Individual and employer mandates
  • The cost-sharing reductions and premium tax credits to help low-income individuals purchase insurance on the ACA Marketplaces
  • Increased federal funding for the Medicaid expansion
  • Many taxes – basically all parts of the health care sector (drugs, medical devices, health insurers, indoor tanning facilities, and the investment income of high-income individuals) were taxed to be able to pay for the ACA and all of those would have all been repealed.

It’s equally important what was NOT included: the repeal of the ACA insurance market reforms and patient protections, such as the elimination of lifetime and annual caps, extension of dependent coverage to allow young adults to stay on their parents’ insurance until age 26, elimination of pre-existing conditions exclusions and rating based on health status, and so on. That means that all of these policies would continue. These policies are politically popular with both sides of the aisle and there are doubts that changes to these policies would meet the rules of reconciliation.

A House Republican white paper was just released which would layer on some additional policies to the 2015 repeal bill, including:

  • More significant Medicaid reforms, including a change to per capita funding
  • Creation of State Innovation Grants to help with reinsurance or other mechanisms to facilitate coverage for high-cost individuals.
  • Enhanced health savings accounts (HSAs) that go with high-deductible health plans to enable people to afford increased out-of-pocket costs; and
  • Creation of a new monthly tax credit to help people afford insurance.

A draft version of the House Republican ACA bill was leaked late last week, and it includes all of these proposals. Rumors are that since the bill was already a few weeks old, it is likely to have already changed. But it lends credence to the idea that this is where the House is headed.

What do we expect for replacement?

A number of plans have been released by Republicans in Congress. The common themes of the replacement plans include:

  • More flexibility for plans regarding what to cover and more flexibility for states to set rules for plans in their areas.
  • More flexibility for states to implement changes to their Medicaid programs.
  • Lots of changes for tax policy: creation of new tax credits to enable people to purchase insurance and some would also change the tax treatment of employer-sponsored coverage.
  • High risk pools or other mechanisms to cover those with expensive, chronic conditions.

It is unclear whether replacement will happen at same time as repeal or afterwards. There is disagreement on this subject among members of Congress, President Trump and various stakeholders. Health insurers and patient and provider groups worry about a lag between repeal and replace and seek for repeal and replace to happen at the same time (or for repeal to be phased in) to prevent gaps in coverage. Some members of Congress want to repeal right away and then replacement would follow afterwards. The leaked House Republican bill would have done both together.

What’s the bottom line?

The bottom line of all of this is that the process is definitely slower and more complicated than some folks anticipated. While there is agreement among Republicans in Congress about many of the themes described above, the devil is in the details and there remain some big questions about those. Plus some of the changes proposed, such as the repeal of the Medicaid expansion, are likely to be unpopular with many Republican governors who expanded Medicaid in their states. I anticipate that the repeal and replacement bills may end up much more narrow in the end, simply because the more complicated, the more the opposition will grow.

We know that HTCs have many questions and concerns about how all of this will play out. We will be providing regular updates to the membership about where things stand, and when the time is right, how to advocate on these issues. Please contact me at or 202-484-1100 with any questions in the meantime.

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New Safe Harbor to the Anti-Kickback Statute for Local Transportation Services
By Elizabeth “Issie” Karan

On December 7, 2016, the Department of Health and Human Services (HHS) Office of the Inspector General (OIG) released a final rule revising and expanding safe harbors to the Anti-Kickback Statute (AKS) (the Final Rule). This article will focus on the addition of a safe harbor to the AKS for local transportation services. Next month, the newsletter will highlight several additional changes which are particularly relevant to hemophilia treatment centers (HTCs), including changes to the Civil Monetary Penalty rules regarding beneficiary inducements.

The AKS is intended to curtail arrangements that could result in higher costs to the Federal Government or compromise the quality of care provided to beneficiaries of federal and state health care programs. The AKS prohibits any person or entity from knowingly or willfully soliciting, receiving, offering or paying remuneration (i.e. something of value) directly or indirectly, in cash or in kind, to induce patient referrals or the purchase or lease of equipment, goods or services, payable in whole or in part by a federal or state health care program. Violation of the AKS is a felony with a maximum fine of $25,000 and imprisonment up to five years, or both. The OIG may initiate administrative proceedings based on a violation of the AKS or exclude the offending party from federal health care programs.

AKS Safe Harbors
A series of statutory and regulatory safe harbors have been established to protect certain business practices and arrangements that the OIG has deemed to present a low risk of fraud and abuse. Safe harbor arrangements are exempted from scrutiny under the AKS, so health care providers may voluntarily seek to comply with safe harbors so that they have the assurance that they will not be subject to enforcement action. Please note, however, that failure to comply with a safe harbor does not necessarily mean an arrangement violates the AKS but just that there is not the same presumption of legality.

Local Transportation Services
The Final Rule adds a new safe harbor at 42 CFR 1001.952(bb) to protect free or discounted local transportation services provided to Federal health care program beneficiaries. In order to be protected under the safe harbor, free or discounted transportation services must meet all of the following conditions:

  • Documented in policy: Entities must have a set policy regarding the availability of transportation assistance, and the policy must be applied uniformly and consistently.
  • Availability cannot relate to volume or value of Federal health care program business: For example, transportation services cannot be offered only to individuals on Medicaid or Medicare. Instead, an HTC may take into account an individual patient’s need for transportation.
  • Limited modes of transportation: The modes of permissible transportation are limited and exclude air, luxury and ambulance-level transportation.
  • Prohibition on marketing: Transportation assistance may not be publicly advertised or marketed to patients or others who are potential referral sources. Providers may inform patients that transportation is available if it is done in a targeted manner.
  • Services must be available only:
    • To established patients: A patient is “established” with a provider once an appointment is made. It is not necessary that the patient previously received care from the provider to be considered “established.”
    • Within a “local” area: The safe harbor protects local transportation which is defined as up to 25 miles in urban settings and up to 50 miles in rural areas. The distance is measured directly and includes any route within that radius (even if such route is more than 25 or 50 miles when driven).
  • For purposes of obtaining medically necessary items and services: The safe harbor does not protect free or discounted local transportation for other purposes (such as applying for government benefits, obtaining social services, or visiting food banks or food stores).

The Final Rule went into effect on January 6, 2017. HTCs should review and/or establish a free and discounted transportation policy if the HTC would like to make such services available to patients.

Alliance Reminders

Mark Your Calendars for Alliance Meetings in 2017!

Here is our meeting schedule for 2017:

  • May 3rd – Physicians Meeting, Washington DC
  • May 4th – Capitol Hill Day, Washington DC
  • May 5th – Spring Members Meeting, Washington DC
  • September 17th to 19th – Fall Members Meeting, California

We are looking at scheduling a Hemophilia Treatment Center introduction to 340B pharmacy programs. If you are interested in attending a program, please contact Sean at

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Consultants Contact Information

We work for you! Please don’t hesitate to contact any of us with any questions or concerns:

Joe Pugliese……215-439-7173
Sean Singh……727-388-7326
Jeff Blake……317-657-5913
Elizabeth Karan……202-466-8960
Roland Lamy……603-491-0853
Audra Ames……727-415-6397
Ellen Riker……202-484-1100
Johanna Gray……202 484-1100
George Oestreich……573-230-7075