Drug pricing, HIPAA changes among most pressing issues facing HHS

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HHS is tackling a myriad of healthcare issues under the Trump administration, from drug pricing to HIPAA.

Here, HHS Deputy Secretary Eric Hargan took time to talk to Becker's about pressing issues facing the agency.

1. HIPAA. HHS is considering changes to HIPAA and 42 CFR Part 2, the federal privacy law that protects the confidentiality of substance use disorder medical records. HHS will seek input from physicians, hospitals, payers and other stakeholders on potential regulatory reform with HIPAA, via a request for information.

"HIPAA is kind of an important element possibly standing in the way of people coordinating care, which is one leg in the move to value-based care," said Mr. Hargan. "Also, the 42 CFR Part 2 is part of the opioid initiative that the president has set for us, and we have heard from providers that 42 CFR Part 2 is a big issue in terms of providing coordinated care to people with substance abuse issues."

Mr. Hargan said input on HIPAA and 42 CFR Part 2 will help determine the agency's future regulatory action.

2. Medicare appeals backlog. In May 2014, the American Hospital Association, Baxter Regional Medical Center in Mountain Home, Ark., Knoxville, Tenn.-based Covenant Health and Rutland (Vt.) Regional Medical Center sued HHS over the backlog of Medicare billing appeals at the administrative law judge level. They filed the lawsuit to force HHS to meet congressionally mandated deadlines for resolving the backlog.

The case is ongoing. Most recently, both sides made oral arguments before Judge James Boasberg of the U.S. District Court for the District of Columbia. The AHA and hospitals argued for court-ordered targets for reducing the backlog. However, attorneys for HHS argued such targets are not crucial given Congress' recent appropriation of $182.3 million to the agency's Office of Medicare Hearings and Appeals, which administers hearings regarding Medicare claim denials.

Mr. Hargan said the appropriation will allow OMHA to expand its adjudication capacity for denied Medicare claims by increasing available staff positions and opening new offices to allow more geographical areas for appeals resolution.

With the appropriation from Congress, "the adjudication capacity is going to increase from we think about 88,000 appeals [resolved] per year to somewhere around 180,000 per year," he said. "I think it's been a while since we've had an ability to handle a steady pipeline of appeals, but once we get staffed up with the resources Congress provided for us, I think OMHA will be able to resolve the backlog."

HHS projects it will be able to eliminate the Medicare appeals backlog by fiscal year 2022.

3. Value-based care. The Trump administration continues to implement changes designed to move healthcare toward value-based care. In January, CMS introduced its new bundled payment model, Bundled Payments for Care Improvement Advanced. The model, which includes more than 30 clinical episodes, launched Oct. 1. Additionally, CMS in August proposed changes to the Medicare Shared Savings Program that would push ACOs to take on risk. And HHS Secretary Alex Azar told the Physician-Focused Payment Model Technical Advisory Committee in September that the Center for Medicare and Medicaid Innovation will launch "new, bold" value-based care models, which may be mandatory.

Mr. Hargan said the agency's goals overall are to reduce government regulatory burdens that impede value-based care while also providing new ways for providers to move to value-based arrangements.

"Even though the term [value-based care] has been around [a long time], I think we're getting more meat on the bones about the idea," he said. "I think technologically we're much more able and don't have to rely on fee-for-service. Now we can get more toward an outcomes-based model. I think [with] the level of data specification we have now, it's going to be easier to move to value-based care."

4. Drug Pricing. In May, the Trump administration released a "blueprint" to combat rising drug prices. The blueprint includes prohibiting insurers and pharmacy benefit managers from writing gag clauses into their contracts with pharmacists. Gag clauses, which became illegal earlier this month, prevent pharmacists from disclosing to patients if they can save money by not using their insurance to purchase their medication.

As part of the blueprint, HHS also proposed requiring drugmakers to disclose the list price of a drug in TV ads if the monthly cost exceeds $35. The rule would apply to direct-to-consumer Medicare and Medicaid drug ads. The list price must be disclosed using "legible text."

Mr. Hargan said HHS' main goal regarding drug pricing is to increase price transparency for patients, particularly those who have high-deductible health plans and must pay the list price until they reach their deductible.

"Drugs are important for people. People should know the prices for drugs. We're hopeful this is part of an ongoing more market-based approach to being able to bring down drug prices," he said.

But a spokesperson for the Pharmaceutical Research and Manufacturers of America told ABC News the trade group believes the proposed rule regarding drug ads is not the optimum way to provide patients with information about prescription costs.

HHS will seek public comments on the proposed drug ad rule and then release a final rule.


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