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Second Opinion

Learn about policy issues important to medical schools and teaching hospitals, with Executive Vice President Atul Grover, M.D., Ph.D.

CMS Releases the FY 2018 IPPS Final Rule

August 4, 2017—The Centers for Medicare and Medicaid Services (CMS) August 2 released the Inpatient Prospective Payment System (IPPS) fiscal year (FY) 2018 final rule in which CMS finalized changes to the Medicare payment rate and policies update for FY 2018. The rule increases payment rates by 1.2 percent for FY 2018. 

CMS finalized its proposal to begin incorporating uncompensated care cost data from Worksheet S-10 of the Medicare cost report. For FY 2018, CMS will use data from the FY 2014 Worksheet S-10 in combination with Medicare and Medicaid low income days data from the two preceding cost reporting periods to determine the distribution of uncompensated care payments. Based on these changes, CMS predicts Medicare disproportionate share hospital (DSH) payments for FY 2018 will increase by $800 million over the FY 2017 amounts. 

CMS is implementing the socioeconomic payment adjustment factor in FY 2019 to the hospital readmissions reduction program (HRRP) mandated by the 21st Century Cures Act (P.L. 114-255). CMS will assess penalties based on a hospital’s performance relative to other hospitals with a similar proportion of patients who are dually eligible for Medicare and full-benefit Medicaid. CMS is also adopting a number of quality measure reporting requirements to the hospital-acquired conditions (HAC) reduction program. 

In addition, CMS is finalizing changes to the 2018 electronic health records (EHR) reporting program to reduce the reporting period from a full year to any continuous 90-day period during the calendar year.  

CMS released a fact sheet on the FY 2018 Medicare Inpatient Psychiatric Prospective Payment System notice with comment period.

The final rule is scheduled to be printed in the Federal Register on August 14.    


Mary Mullaney
Director, Hospital Payment Policies
Telephone: 202-909-2084


White House Drug Commission Draft Interim Report Offers Recommendations to Address Opioid Epidemic

August 4, 2017—The president’s Commission on Combating Drug Addiction and the Opioid Crisis, established by President Trump through a March 29 Executive Order (EO), released an interim report that includes policy recommendations for addressing the opioid epidemic.

As stated in the EO, the mission of the commission is to study the scope and effectiveness of the federal response to drug addiction and the opioid crisis and to make recommendations to the president for improving the federal response [see Washington Highlights, March 31].

Among the recommendations for action, the commission urges the president to declare a national emergency to empower the president’s cabinet to “take bold steps” and “force Congress to focus on funding and empowering the Executive Branch.”

The commission also suggests that the president “mandate prescriber education initiatives with the assistance of medical and dental schools across the country to enhance prevention efforts.” Specifically, the report recommends that the president “mandate medical education in opioid prescribing and risks of developing a [substance use disorder] by amending the Controlled Substances Act to require all Drug Enforcement Administration (DEA) registrants to take a course in proper treatment of pain.” The commission suggests that overprescribing is “due to a lack of education … in our nation’s medical and dental schools and a dearth of continuing medical education for practicing clinicians.”

Additional recommendations from the commission include:

  • Increasing treatment capacity nationwide;
  • Promoting Medication-Assisted Treatment (MAT), including through partnerships between the National Institutes of Health and industry to facilitate testing and development of new MAT treatments;
  • Providing model legislation to states to increase the availability and use of naloxone;
  • Prioritizing the federal response to fentanyl;
  • Increasing federal support for state prescription drug monitoring programs;
  • Aligning patient privacy laws to ensure that medical professionals can access information about patients’ substance use disorders when prescribing pain medication; and
  • Enforcing the Mental Health Parity and Addiction Equity Act.

The interim report noted that additional recommendations will be included in final report, along with more information on topics such as development of a national prevention strategy, identifying workforce access and training needs, applying evidence-based principles to improve treatment programs, research initiatives to combat the epidemic, and use of data collection and analysis to determine effective prevention and treatment strategies.

The final report is scheduled for release later this fall.


Tannaz Rasouli
Sr. Director, Public Policy & Strategic Outreach
Telephone: 202-828-0525

Joseph Bañez
Legislative Analyst
Telephone: 202-739-2995


Court Allows States to Intervene in Case Challenging the Administration’s Authority to Pay CSRs

August 4, 2017—The U.S. Court of Appeals for the District of Columbia Circuit August 1 issued an order allowing states and the District of Columbia to intervene in the lawsuit brought by the House of Representatives to challenge the authority of the U.S. Department of Health and Human Services (HHS) to issue cost sharing reductions (CSRs). 

The Affordable Care Act (ACA, P.L. 111-148 and P.L. 111-152) intended for those reductions to provide funding to insurers to lower premiums on the exchanges for poor individuals. During the Obama Administration, the House of Representatives challenged HHS’s payment of the CSRs, claiming that Congress would have to appropriate the funds. The case currently is in abeyance, and the Trump Administration has not yet announced what it will do regarding the suit. However, with this order, if the litigation proceeds, the states and the District will be able to intervene in part because the Court concluded that “the States have raised sufficient doubt concerning the adequacy of the Department’s representation of their interests.”


Ivy Baer, J.D., M.P.H.
Senior Director and Regulatory Counsel
Telephone: 202-828-0499


Senate Confirms Surgeon General and Other HHS Officials

August 4, 2017—The Senate Aug. 3 confirmed Jerome M. Adams, MD, MPH, as U.S. Surgeon General, along with several other Department of Health and Human Services (HHS) nominees.

Before his nomination, Dr. Adams served as Indiana’s Health Commissioner. Previously, he worked as both a professor of anesthesiology and as a provider at Indiana University School of Medicine [see Washington Highlights, June 30].

Other confirmed HHS nominees include: Robert Kadlec MD, MS, as the Assistant Secretary for Preparedness and Response; Elinore F. McCance-Katz, MD, PhD, as the Assistant Secretary for Mental Health and Substance Abuse; and Lance Robertson, MPA, as the Assistant Secretary for Aging.

In addition, other nominees were considered and will continue to be reviewed by the relevant congressional committees, including Brett Giroir, MD, for Assistant Secretary for Health, and Matthew Bassett, for Assistant Secretary for Legislative Affairs. Their nominations are expected to be considered further in September.


Shamaal Sheppard
Intern, Government Relations
Telephone: 202-478-9924


On the Agenda

August 4, 2017—The House and Senate have adjourned for the summer recess and Labor Day holiday. Both chambers will return to session beginning Tuesday, Sept. 5.


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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806