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OverviewThisreportprovidesanoverviewofadministrativeaction,includingfederalregulationsandexecutiveorders,sincethebeginningofPresidentTrump’stermthroughthestartoftheCongressionalsummerrecessperiod.Thereportalsodiscussescongressionalhearingsonthe340BDrugDiscountProgram,delaystothemandatoryMedicarebundledpaymentmodels,andtheongoingcourtcaseregardingpaymentoftheMarketplaceCostSharingReduction(CSR)subsidies.

IntroductionThroughouthiscampaignandduringhisfirstmonthsinoffice,PresidentDonaldJ.Trumpremainedavocalcriticoffederalgovernmentregulations.ThepresidenthaslongstatedthatoverregulationishamperingAmerica’seconomicgrowth,andplansfordecreasingregulationgottopbillinginhis100-dayactionplan.InaJanuarymeetingwithbusinessleaders,thenewly-inauguratedpresidentpledgedtocutregulationsbyasmuchas75percent.OnJanuary20,theTrumpadministrationissuedagovernment-widememoadvisingagencyheadstotemporarilypostpone(for60daysfromJanuary20)theeffectivedatesofallregulationsthathadbeenpublishedintheFederalRegisterbuthadnottakeneffect,forreviewof“questionsoffact,law,andpolicy.”Tendayslater,PresidentTrumpsignedanexecutiveorderrequiringeveryfederalagencytoestablishaRegulatoryReformTaskForcetoevaluateexistingregulationsandidentifycandidatesforrepealormodification.Theexecutiveorderalsorequiredthat,foreachnewfederalregulation,twoexistingregulationsmustbeeliminating.Atthesametime,inhisfirst200daysinoffice,PresidentTrumpsigned42executiveorders,mostofwhichreversedObama-eraregulations,effortstoprotecttheenvironment,andpolicieshesaysstymiebusiness.Healthcarewasanearlyfocus;thepresident’sfirstexecutiveorderdirectedexecutivedepartmentsandagenciestoexerciseallauthorityanddiscretiontowaive,defer,grantexemptionsfrom,ordelaytheimplementationofanyAffordableCareAct(ACA)requirementorprovisionthatleviesafiscalburdenonstates,businesses,providers,orindividuals.Notably,thisexecutiveorderdidnotallowdepartmentsoragenciestoviolatetheACA’sstatutorydirectives,absentanamendmenttoorrepealoftheACA.

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RegulationsWhileCongressdebatedrepealingandreplacingtheAffordableCareActduringthefirsthalfof2017,itwas“businessasusual”fortheCentersforMedicareandMedicaidServices(CMS).Withtheexceptionofthe60-dayregulatorydelay,theagencyhascontinuedissuingnotices,proposedrules,andfinalrulesatthesamerateandtimeframeasithasinpreviousyears.SincethebeginningofPresidentTrump’sterm,CMShasissuedrulesthatupdateMedicareandMedicaidpaymentpolicies,implementACArequirementsandprograms,andexpanduponthevalue-andquality-basedprogramsenactedbytheMedicareAccessandCHIPReauthorizationActof2015(MACRA).

FinalizedRegulations

ACAInsurerMarketStabilizationPatientProtectionandAffordableCareAct;MarketStabilizationPublicationDate: April18,2017EffectiveDate: June19,2017Commentsdue: March7,2017• Networkadequacy:UndertheACA,qualifiedhealthplans(QHPs)participatingintheexchangeare

requiredto“ensureasufficientchoiceofproviders”andtoprovideinformationontheavailabilityofin-networkandout-of-networkproviders.Untilnow,CMShasbeenresponsiblefordeterminingcompliancewiththisstandard.Underthefinalrule,CMSwill,beginningwiththe2018planyear,relyinsteadonstateregulatorstoensurenetworkadequacy.

• Essentialcommunityproviders(ECPs):Underpriorrulemaking,QHPshadtoincludewithintheir

networkatleast30percentofessentialcommunityproviders(e.g.,communityhealthcenters,safety-nethospitals,andchildren’shospitals)intheirarea.Underthefinalrule,thisrequirementisreducedto20percent.

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• Openenrollment:Thefinalrulereducestheopenenrollmentperiodfor2018to45days,downfromroughly90daysinpreviousyears.ThenextopenenrollmentperiodwillstartonNovember1,2017,andrunthroughDecember15,2017.

• Specialenrollmentperiods:Thefinalrulerequiresindividualstosubmitsupportingdocumentationfor

specialenrollmentperiodsasofJune2017.Consumerswillbegiven30daystoeitheruploadormaildocumentaryverification.Onceapproved,coveragewillberetroactivetothedateofplanselection.CMSwillnotrequirestate-basedexchangesthatdonotuseHealthCare.govtoconductpre-enrollmentverification.

• Metal-levelcoverageupgrades:Thefinalrulelimits,withsomeexceptions,theabilityofexisting

exchangeenrolleestoupgradefromonemetallevel(e.g.,bronze,silver,gold)toanotherduringthecoverageyearbyusingaspecialenrollmentperiod.

• Actuarialvalue:TheACAallowslimitedvariationintheactuarialvalue(AV)ofexchangeplans;this

limitwaspreviouslydefinedas+/-2percent.Thefinalrulechangesthisrequirementbyallowingavariationfrom-4to+2percentagepointsbeginningwiththe2018planyear.Thiswillallowinsurerstomarketplanswithhighercostsharingbutlowerpremiums.

InpatientRehabilitationFY2018InpatientRehabilitationFacility(IRF)ProspectivePaymentSystemPublicationdate:August3,2017Effectivedate: October1,2017• Paymentupdate:Thisfinalruleprovidesfora1percentincreaseinIRFpaymentratesforFY2018

(approximately$75millioninadditionalpayments).• 60PercentRule:ThefinalrulerevisesthelistsofICD-10-CMdiagnosiscodesthatareusedto

determinecompliancewiththerequirementthatatleast60percentofafacility’spatientpopulationhaveoneof13qualifyingconditions.Specifically,thefinalrulerevisesthecodelistsfortraumaticbraininjury,hipfracture,andmajormultipletraumacodestoensurethatthesecodelistsmoreaccuratelyreflecttherelevantconditionsCMSbelievesshouldcountpresumptivelytowardthe60percentrule.

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• 25percentpaymentpenalty:Thefinalruleeliminatesthe25percentpaymentpenaltythatappliestolateIRFpatientassessmentinstrumentsubmissions.

SkilledNursingFacilitiesFY2018ProspectivePaymentSystemandConsolidatedBillingforSkilledNursingFacilities(SNFs)Publicationdate: August4,2017Effectivedate: October1,2017• ThisfinalruleincreasespaymentratesusedunderthePPSforSNFsforFY2018by1percent

(approximately$370million).• TherulealsofinalizesrevisionstotheSNFQualityReportingProgram(QRP),includingupdatingthe

pressureulcermeasureandadoptingfournewmeasuresthataddressfunctionalstatusbeginningwithFY2020programyear.

• Inaddition,thefinalrulefinalizespoliciesfortheSNFValue-BasedPurchasing(VBP)Program,

includinganexchangefunctionapproachtoimplementvalue-basedincentivepaymentadjustmentsbeginningOctober1,2018.

HospiceFY2018HospiceWageIndexandPaymentRateUpdatePublicationdate: August4,2017Effectivedate: October1,2017• Thisfinalruleupdatesthehospicewageindex,paymentrates,andcapamountforFY2018.The

marketbasketadjustmentwillincreaseFY2018hospicepaymentratesby1percent(approximately$180million).Therulealsoincludesnewqualitymeasuresandprovidesanupdateonthehospicequalityreportingprogram.

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InpatientHospitalsFY2018InpatientProspectivePaymentSystemRatesforAcuteCareHospitalsPublicationdate: August14,2017Effectivedate: October1,2017• Paymentupdate:Thefinalruleincreasesinpatientoperatingratesby1.2percentforgeneralacute

carehospitalsundertheIPPSthatsuccessfullyparticipateintheHospitalInpatientQualityReporting(IQR)Programandaremeaningfulelectronichealthrecord(EHR)users.

• MedicareDSH:ThetotalestimatedMedicareDSHpaymentswillbeincreasedfrom$9.6billioninFY

2017to$10.65billioninFY2018.ForFY2018,CMSwilluseWorksheetS-10datatodeterminethedistributionofuncompensatedcarepayments.

• HospitalReadmissionsReductionProgram(HRRP):CMSisimplementingprovisionsofthe21stCentury

CuresActthatrequiretheagencytoadjustHRRPpenaltiesbasedonsocioeconomicstatus.BeginninginFY2018,CMSwillassesspenaltiesbasedonahospital’sperformancerelativetootherhospitalswithasimilarproportionofpatientswhoareduallyeligibleforMedicareandfull-benefitMedicaid.

• HCAHPSSurvey:BeginningwithsurveysadministeredinJanuary2018,thefinalrulereplacesthepain

managementquestionsintheHCAHPSSurveytofocusonthehospital’scommunicationswithpatientsaboutthepatients’painduringthehospitalstay.

• LTCH25-percentthreshold:Underthe“25-percentthreshold,”along-termacutecarehospital(LTCH)

isallowedtoadmitupto25percentofitspatientsfromasinglegeneralacutecarehospital;forpatientsadmittedpastthe25percentthreshold,anLTCHfacesasignificantMedicarereimbursementreduction.Thefinalruledelaysforoneyeartheimplementationofthe25-percentthresholdpolicywhileCMSconductsanevaluationofwhetherthepolicyisstillneeded.

• Accreditingorganizationtransparency:Thefinalrulereversesaprovisionoftheproposedrulethat

wouldhaverequiredagency-approvedaccreditingorganizationstoposthospitalsurveyreportsandplansofcorrectionontheirwebsites.

• ClinicalQualityMeasure(CQM)reporting:ThefinalruleeasesCQMreportingrequirementsforthe

HospitalInpatientQualityReporting(IQR)ProgramandtheElectronicHealthRecord(EHR)Incentive

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• Program,andshortensthereportingperiodforthelatterfromoneyearto90daysinordermatchthe

performanceperiodestablishedunderMIPS.

ProposedRegulations

Long-TermCareFacilitiesRevisionofRequirementsforLong-TermCareFacilities’ArbitrationAgreementsPublicationdate: June8,2017Commentsdue: August7,2017• InanOctober2016finalrule,CMSprohibitedtheuseofpre-disputebindingarbitrationagreements

withresidentsoflong-termcare(LTC)facilities.Underthisnewproposedrule,arbitrationagreementsarepermissible,buttheymustbewritteninplainlanguage.IfthearbitrationprovisionisaconditionofadmissiontotheLTCfacility,theagreementalsomustbeincludedintheadmissioncontract.

PhysicianQualityPaymentProgramCY2018UpdatestotheQualityPaymentProgramPublicationdate: June30,2017Commentsdue: August21,2017• ThisproposedruleincludesupdatesforthesecondandfutureyearsoftheQualityPaymentProgram

(QPP)establishedbyMACRA.UndertheQPP,eligibleclinicianscanparticipateviaoneoftwotracks:theMerit-basedIncentivePaymentSystem(MIPS)orAdvancedAlternativePaymentModels(APMs).

AdvancedAlternativePaymentModels• DownsideriskforAdvancedAPMs:Undercurrentregulations,inordertoqualifyforpayment

incentivesundertheAdvancedAlternativePaymentModel(APM)framework,anAPMmustexposeparticipatingproviderstoaspecifiedlevelofdownsidefinancialrisk.Forperformanceyears2019and2020,CMSproposesinthisfinalruletomaintaintheminimumlevelofdownsideriskatthecurrentrateof8percentoftheparticipant’stotalMedicarePartsAandBrevenues.

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• DownsideriskforMedicalHomeModels:Asanalternativetotheabovestandard,existingregulations

allowanAPMtoqualifyasanAdvancedAPMbymeetingthedefinitionofaMedicalHomeModel,whichallowsforlowerdownsiderisk.Theproposedrulerelaxesthecurrentriskthresholdforthismodel,reducingtheminimumdownsideriskfrom3percentto2percentinperformanceyear2018,from4percentto3percentin2019,and5percentto4percentin2020.Theminimumriskwouldremainatitscurrentlevelof5percentforperformanceyear2021andbeyond.

Merit-basedIncentivePaymentSystem• ExemptionthresholdforMIPS:Undercurrentregulations,cliniciansnotparticipatinginAdvanced

APMsarerequiredtoparticipateinMIPSiftheybillMedicaremorethan$30,000ayearorprovidecareformorethan100Medicarepatients.TheproposedruleraisesthisthresholdtoonlycoverproviderswhobillMedicaremorethan$90,000ayearorprovidecareformorethan200Medicarepatients.CMSprojects585,560clinicianswillfallunderthisexclusion.

• MIPSweighting:CMSproposesthefollowingweightingfor2018performanceyear/2020payment

year:Quality–60percent;Improvement–15percent;AdvancingCareInformation–25percent;Cost–0percent.

• MIPSvirtualgroups:TheproposedrulewouldallowsolopractitionersandpracticeswithtenorfewerMIPS-eligibleproviderstoformlargergroupsforMIPSparticipation.ProviderswouldthenbeabletosubmittheirMIPSreportingbasedonthat“virtualgroup”ratherthanasindividuals.

• MIPSreportingflexibility:Theproposedrulewouldgiveclinicianstheoptiontochoosehowtheywill

participateinMIPS,rangingfromafullyearperformanceperiodforthequalityandcostperformancecategoriestoa90-dayminimumfortheadvancingcareinformationandimprovementactivities.

• Facility-basedpractitioners:Undertheproposedrule,practitionerswhoseprimaryprofessional

responsibilitiesareinahealthcarefacilitywouldbeallowedtosubmitthatfacility’sHospitalValueBasedPurchasingProgramscoresasaproxyfortheindividualpractitioner’sperformanceinthequalityandcostcategories.

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HospitalOutpatient/AmbulatorySurgeryCentersCY2018HospitalOPPSandASCPaymentRulePublicationdate: July20,2017Commentsdue: September11,2017• Thisproposedrulewouldupdatehospitalratesby1.75percentinCY2018comparedtoCY2017.

• TheproposedrulewouldalsomakedeepcutstohowmuchCMSreimburseshospitalsfor340Bdrugs.

Currently,hospitalsarereimbursedforthe340Bdrugsattheiraveragesalespriceplus6percent.Undertheproposedrule,CMSwouldpayaveragesalepriceminus22.5percent.

PhysicianReimbursementCY2018MedicarePhysicianFeeSchedulePublicationdate: July21,2017Commentsdue: September11,2017ThisproposedruleaddresseschangestotheMedicarephysicianfeeschedule(MPFS)andotherMedicarePartBpaymentpoliciesforCY2018.• Overallpaymentupdateandmisvaluedcodetarget:CMSestimatesa0.31percentoverallincreasein

physicianpaymentratesfor2018.Thisupdatereflectsthe0.50percentincreaseestablishedunderMACRA,reducedby0.19percentduetoarecaptureofoverpaymentsduetomisvaluedcodes.Todeterminethepaymentrateforaparticularservice,thesumofthreegeographicallyadjustedRVUsismultipliedbyaconversionfactor(CF)indollars.Undertheproposedrule,theconversionfactorforCY2018is$35.99,whichisslightlymorethanthe2017CFof$35.89.

• Site-neutralpaymentpoliciesforoff-campusHOPDs:Theproposedruleproposeschangestosite-

neutralpoliciesunderSection603oftheBipartisanBudgetActof2015,payinghospitals25percentratherthan50percentoftheOPPSratefornon-exceptedservices.CMSindicatedthatitmaybewillingtofinalizealessseverecut(e.g.,40percent)dependinguponfeedbackreceivedonthePFSproposedrule.

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• Medicaretelehealthservices:CMSproposestopayfornewtelehealthservices,includingpsychotherapyforcrisis,healthriskassessments,andcareplanningforchroniccaremanagement.

MedicaidDSHMedicaidDisproportionateShareHospitalAllotmentReductionsPublicationdate: July28,2017Commentsdue: August28,2017• ThisproposedruleoutlinesamethodologytoimplementtheACA’sannualMedicaidDSHallotment

reductions.Themethodologyseparatesstatesintotwogroups(lowDSHandnon-lowDSH)forreductionsstartinginFY2018.Overthenexteightyears,fromFY2018toFY2025,federalDSHfundingisslatedtobereducedby$43billion.

• TheproposedruledoesnotincludetheFY2018DSHfundingforeachstate,butdoesincludeachart

thathypotheticallyappliestheproposedmethodologytocurrentFY2017DSHallotments.Undertheproposedmethodology,FY2017fundingwouldhavebeenreducedby$2billionnationwide($153.7millioninNewJersey;$121millioninPennsylvania).

HomeHealthCY2018HomeHealthProspectivePaymentSystemRateUpdate;Value-BasedPurchasingModel;andQualityReportingRequirementsPublicationdate: July28,2017Commentsdue: September25,2017• Thisproposedrulewouldresultina0.4percentdecrease(-$80million)inpaymentstoHomeHealth

Agencies(HHAs)inCY2018.• ForCY2019payments,CMSproposestoimplementanalternativecase-mixadjustmentmethodology,

theHomeHealthGroupingsModel(HHGM).TheHHGMwoulduse30-dayperiods,ratherthan60-dayepisodes,andrelymoreheavilyonclinicalcharacteristicsandotherpatientinformation(e.g.,principaldiagnosis,functionallevel,comorbidconditions,referralsource,andtiming)toplacepatientsintomoremeaningfulpaymentcategories.

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MedicalTechnologyExpeditedCoverageofInnovativeTechnologyPublicationdate:N/ACommentsdue: N/A• ThisproposedrulewouldprovisionallycovercertainmedicaldevicesanddiagnosticsfollowingFDA

approvalwhilethemanufacturercontinuestocollectadditionaldataonthetechnology.InpatientPsychiatricFacilitiesFY2018InpatientPsychiatricFacilitiesProspectivePaymentSystem-RateUpdatePublicationdate: August7,2017Effectivedate: October1,2017Commentsdue: October6,2017• ThisnoticewithcommentperiodupdatestheprospectivepaymentratesforMedicareinpatient

hospitalservicesprovidedbyinpatientpsychiatricfacilities(IPFs).CMSestimatesIPFpaymentstoincreaseby0.99percentor$45millioninFY2018.

• CMSisalsosolicitingcommentsonimprovementsthatcanbemadetothehealthcaredeliverysystemthatwouldreduceunnecessaryburdenforclinicians,providerssuchasIPFs,andpatientsandtheirfamilies.

Cardiac/JointReplacementPaymentModelsCancellationofAdvancingCareCoordinationThroughEpisodePaymentandCardiacRehabilitationIncentivePaymentModels;ChangestoComprehensiveCareforJointReplacementPaymentModelPublicationdate: August17,2017Commentsdue: October16,2017• ThisproposedrulewouldcanceltheEpisodePaymentModels(EPMs)andCardiacRehabilitation(CR)

incentivepaymentmodel.Itwouldalsoreducebyhalfthenumberofmetropolitanstatisticalareas(MSAs)thatarerequiredtoparticipateintheComprehensiveCareforJointReplacement(CJR)model,andgivesnewly-excludedhospitalsaone-timeoptiontooptbackin.theCJRmodelwouldcontinue

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onamandatorybasisinapproximatelyhalfoftheselectedgeographicareas(34ofthe67MSAs),withanexceptionforlow-volumeandruralhospitals,andcontinueonavoluntarybasisintheotherareas(33ofthe67MSAs).

340BDrugPricingProgramCeilingPriceandManufacturerCivilMonetaryPenaltiesPublicationdate: August21,2017Commentsdue: September20,2017• HHSissolicitingcommentsondelayinguntilJuly2018theeffectivedateoftheJanuary2017finalrule

thatsetsforththecalculationoftheceilingpriceandapplicationofcivilmonetarypenaltiesinthe340BDrugPricingProgram.Therule,whichwassupposedtotakeeffectinApril,wouldalsoauthorizeHHStolevyfinesagainstdrugmanufacturersthatintentionallychargeahospitalmorethantheceilingprice.HHSsaysthatthereare"substantialquestionsoffact,lawandpolicyraisedbytherule"andthatitneedsmoretimetofullyconsiderpreviousobjectionstoit,includingcompliancechallenges.

ExecutiveOrdersDuringhisfirst200daysinoffice,PresidentTrumpsigned42executiveorders,morethananypresidentinthelast70years.ExecutiveordersareassignednumbersandpublishedintheFederalRegister,similartolawspassedbyCongress,andtheytypicallydirectmembersoftheexecutivebranchtofollowanewpolicyordirective.WhilePresidentTrump’sordershaverunthegamutfromimmigrationtovoterfraud,thepresidentplacedanearlypriorityonrollingbackObama-erahealthcareregulations,aswellaseffortstoaddressthenationwideopioidepidemic.

MinimizingtheEconomicBurdenofPPACAPendingRepealOnJanuary20,PresidentTrumpissuedthefirstexecutiveorderofhispresidency,aimingto“minimizetheunwarrantedeconomicandregulatoryburdens”oftheAffordableCareAct.TheordergivestheHHSSecretaryandtheheadsofallotherrelevantexecutivedepartmentsandagenciestheauthoritytowaive,defer,grantexemptionsfrom,ordelaytheimplementationofanyprovisionorrequirementoftheACAthat“wouldimposeafiscalburdenonanystateoracost,fee,tax,penalty,orregulatoryburdenonindividuals,families,healthcareproviders,healthinsurers,patients,recipientsofhealthcareservices,purchasersofhealthinsurance,ormakersofmedicaldevices,products,ormedications.”

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ReducingRegulationandControllingRegulatoryCostsOnJanuary30,PresidentTrumpissuedanexecutiveorderrequiringexecutivedepartmentsandagenciestoslashtworegulationsforeveryonenewregulationproposed.Regulationspendingcannotexceed$0,andanycostsassociatedwithregulationsmustbeoffsetwitheliminations.Theorderalsodirectstheheadofeachagencytokeeprecordsofthecostsavings,tobesenttothepresident.

President’sCommissiononCombatingDrugAddictionandtheOpioidCrisisOnMarch29,PresidentTrumpissuedanexecutiveorderestablishingacommissionchargedwithstudyingthescopeandeffectivenessofthefederalresponsetodrugaddictionandtheopioidcrisisandmakingrecommendationstothepresidentforimprovingthatresponse.TheCommission,chairedbyNewJerseygovernorChrisChristie,releaseditsinterimreportonJuly31.Accordingtotheinterimreport,thefirstandmosturgentrecommendationoftheCommissionisforPresidentTrumptodeclareanationalpublichealthemergencytocombattheongoingcrisis.AreportcontainingtheCommission’sfinalfindingsandrecommendationsareduetothepresidentbyOctober1,2017.

NotableEvents

340bDrugDiscountProgramThe340BDrugDiscountProgramisafederalprogramcreatedin1992thatrequiresdrugmanufacturers,asaconditionforhavingtheirdrugscoveredbyMedicaid,toprovideoutpatientdrugstoeligiblehealthcareorganizationsandcoveredentitiesatsignificantlyreducedprices.Thesesavingscouldthenbeusedto“stretchscarcefederalresourcesasfaraspossible,reachingmoreeligiblepatientsandprovidingmorecomprehensiveservices.”TheprogramisadministeredbytheOfficeofPharmacyAffairs(OPA),locatedwithintheHealthResourcesandServicesAdministration(HRSA).OPAestimatesthatthesavingsto340Bprovidersattributabletotheprogramin2015was$6billion.

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Theprogramhasgrownsignificantlyinrecentyears.AccordingtotheGovernmentAccountabilityOffice,thenumberofcoveredentitysitesthattakeadvantageofthe340Bprogram–currentlyabout38,000–hasnearlydoubledinthepastfiveyears.Inresponsetotherapidgrowthoftheprogram,drugmakersandsomelawmakershavecalledforgreateroversightoftheprograminlightofcomplaintsthatsomehospitalsarereceivingdiscounteddrugbenefitsdespiteservingasmallnumberoflow-incomepatients.OnJune1,2017,theHouseEnergyandCommerce(E&C)CommitteesentalettertoHRSArequesting340Bprogramauditdocumentsfromthelasttwofiscalyears.Intheletter,theleaderscitedmultipleconcernswiththeprogram,includingentitiesbillingforduplicatediscountsonthesamemedication,andthatuninsuredorunderinsuredpatientsmaybepayingthefullpriceofadrugeventhoughtheyaregettingitthroughanentitywithinthe340Bprogram.OnJuly18,2017,theE&CSubcommitteeonOversightandInvestigationsheldahearingentitled“ExaminingHRSA’sOversightofthe340BDrugPricingProgram.”WitnessesincludedrepresentativesfromHRSA,theGovernmentAccountabilityOffice,andtheHHSOfficeofInspectorGeneral.Committeemembersfrombothpartiesexpressedsupportforthegoalsofthe340Bprogram,whilealsoacknowledgingtheneedtoensureprogramintegritythroughincreasedtransparencyandclarityinthedefinitionof“eligiblepatients.”Committeemembersalsosuggestedthatfuturehearingsonthe340Bprogrambeheldtoconsiderpossiblelegislationaddressingoversightoftheprogram.

BundledPaymentDemonstrationsOnAugust15,CMSissuedaproposedrulethatwouldcanceltheEpisodePaymentModels(EPMs)andCardiacRehabilitation(CR)incentivepaymentmodel.Italsoreducesbyhalfthenumberofmetropolitanstatisticalareas(MSAs)thatarerequiredtoparticipateintheComprehensiveCareforJointReplacement(CJR)model,andgivesnewly-excludedhospitalsaone-timeoptiontooptbackin.

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CancellationoftheEPMsandCRIncentivePaymentModelBasedonadditionalreviewandconsiderationofstakeholderfeedback–particularlyconcernsregardingparticipationrequirements,data,pricing,andqualitymeasures,amongothers–CMSproposestocanceltheEPMsandCRincentivepaymentmodelbeforetheybegin.CMSnotesthat,iftheproposaltocanceltheEPMsandCRincentivepaymentmodelisfinalized,providersinterestedinparticipatinginbundledpaymentmodelsmaystillhaveanopportunitytodosoinCY2018vianewvoluntarybundledpaymentmodelsthatwouldmeetthecriteriatobeanAdvancedAlternativePaymentModel(APM).ChangestotheCJRModelParticipationRequirementParticipationrequirements:TheCJRmodelwouldcontinueonamandatorybasisinapproximatelyhalfoftheselectedgeographicareas(34ofthe67MSAs),withanexceptionforlow-volumeandruralhospitals,andcontinueonavoluntarybasisintheotherareas(33ofthe67MSAs).Low-volumeandruralexclusion:CMSproposestoexcludeandautomaticallywithdrawlow-volumeandruralhospitalsintheproposed34mandatoryparticipationMSAs.Forthepurposesofthismodel,CMSdefinesalow-volumehospitalasahospitalwithfewerthan20LEJRepisodesintotalacrossthe3historicalyearsofdatausedtocalculatetheperformanceyear1targetprices.Op-inoption:Hospitalsintheproposed33voluntaryparticipationMSAsandhospitalsthatarelow-volumeorruralwouldhaveaone-timeopportunitytonotifyCMSoftheirelectiontocontinuetheirparticipationintheCJRmodelonavoluntarybasis(opt-in)forperformanceyears3,4,and5.Thesehospitalswouldbesubjecttoallmodelrequirements.Commentsolicitation:InordertokeephospitalsinallMSAsselectedforparticipationintheCJRmodelactivelyparticipatinginthemodel,CMSissolicitingcommentonwaystofurtherincentivizeeligiblehospitalstoelecttocontinueparticipatingintheCJRmodelfortheremainingyearsofthemodel

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RelevantMandatoryParticipationMSAs

MSAName Wage-adjustedEpisodePayments(in$)

Harrisburg-Carlisle,PA 28,360

NewYork-Newark-JerseyCity,NY-NJ-PA 31,076

Pittsburgh,PA 30,886

Reading,PA 28,679

ACAMarketReforms

CSRSubsidiesInNovember2014,theHouseofRepresentativesfiledalawsuitagainsttheObamaadministrationclaimingthattheadministrationwasillegallyreimbursingmarketplaceinsurersforcost-sharingreduction(CSR)subsidies.TheHousearguedthatCongresshadneverappropriatedthemoneytopaytheinsurers.OnMay12,2016,theU.S.DistrictCourtfortheDistrictofColumbiaruledinfavoroftheHouseandenjoinedfuturepaymentsuntilanappropriationwasforthcoming.OnJuly16,2016,theObamaadministrationfiledanappeal.OnDecember5,2016,aftertheelectionofDonaldTrump,theCourtofAppealsfortheD.C.CircuitstayedfurtherproceedingsinthecaseattherequestoftheHouseofRepresentatives.OnFebruary21,2017,theHouseofRepresentativesandtheTrumpadministrationJusticeDepartmentfiledajointmotioninHousev.Price(formerlyHousev.Burwell)askingthecourttocontinuetoholdthecaseinabeyancewhilethetwopartiesnegotiatedasettlement.AfterthefailureoftheSenatehealthcarebillinlateJuly,PresidentTrumpthreatenedtodroptheHousev.Priceappeal-effectivelyendingCSRpaymentstoinsurers-amovethatwouldpotentiallyleavetensofthousandsmorewithoutcoverageoptionsin2018.AlsoinlateJuly,abipartisangroupoflegislators

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knownasthe"ProblemSolversCaucus"reachedanagreementtostabilizetheindividualmarket.TheproposalincludesbringingCSRpaymentsundercongressionaloversight,andtherebyprotectingthemfromPresidentTrump’sthreattodroptheappeal.OnAugust1,afederalcourtruledthatmorethanadozenDemocraticstateattorneysgeneralcouldinterveneinthelawsuit.Therulingensuresthatthestatescanstillcontinuetofightforthepaymentsincourt,eveniftheTrumpadministrationultimatelyrefusestodefendthem.TheuncertaintysurroundingtheCSRsubsidieshasledtoinsurancemarketsdestabilizingacrossthecountry.CMSreleasedapressstatementonJuly10statingthatonly141insurershadappliedforparticipationinthefederalexchangefor2018inthe39statesitserves.Thisisdownfromthe227initialapplicantsfor2017andthe167insurersthatactuallyofferedcoveragethatyear.