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Health Care Current: August 2, 2016
The Cancer Moonshot initiative: Taking a giant leap toward a cure
This weekly series explores breaking news and developments in the US health care industry, examines key issues facing life sciences and health care companies and provides updates and insights on policy, regulatory, and legislative changes.
- My Take
- Implementation & Adoption
- On the Hill & In the Courts
- Around the Country
- Breaking Boundaries
The Cancer Moonshot initiative: Taking a giant leap toward a cure
“For the loved ones we’ve lost, for the families [that] we can still save, let’s make America the country that cures cancer once and for all.”1 – President Barack Obama
President Barack Obama made this statement in his State of the Union Address in January 2016 as he announced he was putting Vice President Joe Biden in charge of the Cancer Moonshot initiative. The initiative’s name is an obvious ode to the incredible feat our country accomplished in 1969 when, eight years after President John F. Kennedy called for a moon landing, the country watched American astronauts walk on the moon. With the Cancer Moonshot initiative, America hopes to harness this same spirit of American innovation to prevent, diagnose, and treat cancer.
Cancer is personal to us all – there is not a community or family it has not impacted. So when the White House announced the Cancer Moonshot initiative, communities across the country sprung to action to come up with plans to contribute to this daring and bold challenge.
Through my role as Deloitte’s Federal Health Sector lead, I have come to realize how unique it is to be able to work across so many sectors of the health care industry: traditional health care organizations, federal, state, and local governments, non-profit organizations, life sciences companies, health plans, cancer centers, health care systems, emerging technology firms, and regulators. In thinking through how Deloitte could contribute to the Cancer Moonshot initiative, I, and the team, knew a key goal would be to find a way to use our resources—our people, passion, and purpose—to go upstream, leverage our place in the health care ecosystem, and make a difference in the fight against cancer.
Designing an XPRIZE Grand Challenge in cancer is one step we are taking to do that.2 The cancer research ecosystem is incredibly specialized, which can result in research and data silos. Through our collaboration, we will seek the input of experts over the next several months and issue a challenge to the cancer ecosystem to help us meet the goals of the Cancer Moonshot initiative. The XPRIZE model has the potential to activate the crowd and unite traditional and non-conventional partners across this wide cancer ecosystem to address the most pressing challenges.
It’s hard to imagine a strategy or tactic that has not been deployed to fight cancer. The scientific and research community has attacked the disease from every angle. With each success comes new challenges and complexity. But the tide is turning. Technology is proliferating at an exponential rate. The scientific community has the knowledge, the data, and the discovery tools it needs to accelerate progress in cancer prevention, diagnosis, and treatment. The next step is to bring it all together and have disparate and dispersed research teams from around the country and the globe communicate and collaborate in new and unconventional ways.
The Deloitte team was delighted to be invited to participate in the Cancer Moonshot Summit on June 29. At the Summit, there were more than 350 researchers, oncologists, and other care providers, data and technology experts, patients, families, and advocates, who came together to contribute to the charge the federal government set out: to bring about a decade’s worth of advances in cancer prevention, early detection, and treatment in five years. What is truly inspiring is on that day, there were approximately 270 similar Summits going on around the country in which more than 6,000 people participated.
Participating in this Summit provided me and the team with perspective on why this diverse community of stakeholders is much more equipped this time around than when President Nixon first used the cancer moonshot metaphor in 1971. Today, not only do we have an unfathomable amount of information and knowledge compared to 45 years ago, we have the technological tools, data analytics, people, and passion coming together for a common and very noble purpose. I believe we are ready to take the giant leap toward finding the answers to cancer prevention, early detection, and treatment.
1 The White House, Office of the Press Secretary, Remarks of President Barack Obama–State of the Union Address as Delivered, January 13, 2016.
2 XPRIZE is a nonprofit organization with the mission to bring about radical breakthroughs for the benefit of humanity, through large-scale, high-profile incentivized prize competitions.
By Terri Cooper, PhD, Principal and the Federal Health Sector Leader, Deloitte Consulting LLP
CMS expands and adds new bundles programs
The US Centers for Medicare and Medicaid Services (CMS) has proposed a mandatory bundled payment program for cardiac care. This adds to the other bundled payment programs currently in place: the Comprehensive Care for Joint Replacement model (CCJR, also mandatory) and the Bundled Payments for Care Improvement (BPCI, voluntary) program.
Under the new program, CMS would use bundled payments for acute myocardial infarctions and coronary artery bypass grafts for hospitals in 98 randomly selected geographic areas. For each type of bundle, CMS would establish a target price using hospital-specific and regional data. Providers would receive fee-for-service payments and then CMS would calculate spending per bundle after the fact and share savings or losses (i.e. the hospital would need to pay CMS back if it exceeded the target). Risk sharing percentages would be phased in over time. In addition to care received in the acute setting, the bundled payment would cover all related care within 90 days of discharge.
CMS would also add two new conditions – hip and femur fractures – to the CCJR program. The addition would be scaled up in the same 67 geographies already participating in CCJR for hip and knee replacements.
Finally, CMS proposed to add electronic health record (EHR) requirements to all of the episode payment model (EPM) programs so that they may meet requirements for advanced alternative payment models (APMs) under the Medicare Access and CHIP Reauthorization Act (MACRA). CMS would establish two EPM tracks: Track 1 participants would be those who use certified EHRs and would qualify as advanced APMs; Track 2 participants would be those who do not use certified EHRs and would not qualify as advanced APMs.
Related: Last week, CMS also finalized payments to skilled nursing facilities (SNF), inpatient rehabilitation facilities (IRF), and hospices. CMS will increase payments to SNFs by $920 million, which is higher than originally proposed. IRFs will see $145 million more than last year. Finally, payments to hospices will increase by $350 million, and CMS will begin displaying quality measures under the Hospice Quality Reporting Program.
Analysis: As explained in the Deloitte Center for Health Solutions’ recent policy brief, “Medicare changes in post-acute care payment,” for years, acute care hospitals have had few financial incentives to coordinate care across PAC settings, often leading to higher costs and readmissions to acute care hospitals. But, policy levers are joining forces to change the way that Medicare pays for PAC services.
One such lever is bundled payments. The bundled payment model makes hospitals financially responsible for PAC services that are delivered as part of an episode of care. Successful participants will likely be those who improve care coordination across settings and use resources more efficiently. As bundled payment programs increase, acute care hospitals may need to shift the way they approach their referrals to and relationships with post-acute care providers.
Implementation & Adoption
Most hospitals received three stars under new quality rating program
Last week, CMS published results from the Overall Hospital Quality Star Rating program on the Hospital Compare website. Through this program, CMS ranks hospitals on a scale of one to five stars. The star ratings reflect their performance on 64 possible quality measures, which fall into seven categories: mortality rates, care safety, readmissions and hospital acquired infections, patient experience (as per the Hospital Consumer Assessment of Healthcare Providers and Systems survey), effectiveness of care, timeliness of care, and efficient use of medical imaging. This is the first year CMS has measured and publicly reported these ratings.
Of the 4,559 hospitals reporting, CMS gave 3,662 a star rating. Most hospitals – nearly 40 percent – received an average score of three stars. Only 2 percent of hospitals received five stars.
Some hospitals have expressed concerns about the rating methodology, saying that the quality measures do not adequately adjust for the sociodemographic characteristics of patients. This could skew the results for hospitals in geographic areas with higher concentrations of poverty or individuals with complex care needs.
Teaching hospitals received lower average ratings than non-teaching hospitals (2.87 stars compared to 3.11 stars). These hospitals often treat a higher proportion of complex patients and pilot new treatments or treatment methods. A lower percentage (22 percent) of safety-net hospitals (public hospitals or hospitals with large Medicaid patient loads) received above average ratings compared with other hospitals (30 percent). Twenty-nine percent of safety-net hospitals received below average ratings, compared with 22 percent of non-safety net hospitals.
CMS and many hospitals agree that the rating formula should be improved to reflect the most accurate information possible. The American Hospital Association, for example, says that it supports CMS in this goal and is collaborating with other industry groups, including America’s Essential Hospitals and the Federation of American Hospitals, to accomplish this goal.
HHS to provide grants to enhance cybersecurity information exchange
The US Department of Health and Human Services (HHS) will provide up to $250,000 a year for up to five years to organizations that, through information sharing and analysis, can help providers and public health agencies collaborate on cyber security issues.
- Conduct outreach and education to improve cyber security awareness
- Equip stakeholders to take action in anticipation of potential cyber threats
- Facilitate the sharing of cyber threat information exchange between organizations in health care, public health agencies, and HHS
Related: As mentioned in the July 19, 2016 Health Care Current, the HHS Office of Civil Rights (OCR) recently released a fact sheet on one important cybersecurity threat: ransomware attacks. The ransomware guidance came shortly after Representatives Ted Lieu and Will Hurd sent a letter to the deputy director of HHS OCR and urged the agency to develop guidance for ransomware attacks on hospitals. In their letter, the representatives called for more sharing of cyber-response resources. Many experts say that information sharing is critical for developing a unified response to ransomware attacks.
Hospitals spent less on charity care and bad debt plateaued in 2014
According to CMS, hospital charity costs decreased and bad debt expenses stabilized during 2014. This was the first year for the Affordable Care Act’s (ACA) public insurance exchanges and many state Medicaid expansions.
Charity care costs – free health care delivered to patients based on the hospital’s policies – dropped 13 percent in one year, from 1.81 percent of net revenue in 2013 to 1.59 percent in 2014. This drop occurred after three years of steady increases between 2011 and 2013. In addition, bad debt – the sum of unpaid bills by patients who either did not apply for or did not qualify for charity care – stopped increasing for the first time since 2011. This based on analysis of CMS data collected from approximately 4,500 acute care hospitals in the US between 2011 and 2014.
The nationwide reductions in charity care costs resulted in an average of $1.2 million in savings per hospital, according to the CMS data. Hospitals in Medicaid expansion states saw greater drops in both charity care and bad debt.
- Hospital charity care costs dropped more in expansion states: From $7.1 million in 2013 to $4.3 million in 2014 compared with $4.2 million in 2013 to $4.3 million in 2014 in non-expansion states.
- Bad debt dropped more in expansion states: From $3.4 million in 2013 to $3.1 million in 2014 compared with $3.5 million to $3.7 million in non-expansion states.
FDA: GDUFA backlog commitment fulfilled one year ahead of schedule
Earlier this month, the US Food and Drug Administration (FDA) Center for Drug Evaluation and Research (CDER) announced that it had met its commitment to review 90 percent of the backlogged abbreviated new drug applications (ANDAs) more than a year ahead of schedule. CDER agreed to accomplish this under the Generic Drug User Fee Amendments (GDUFA), an amendment to the Prescription Drug User Fee Act (PDUFA).
GDUFA charges the generic pharmaceutical industry user fees to support a clear and consistent pathway through the FDA approval process. As part of the 2012 authorization of GDUFA I, CDER pledged to act on 90 percent of the backlogged applications for generic drugs and prior approval supplements that were pending through October 2012 by September of 2017. With this milestone achieved, GDUFA II is expected to be fully reauthorized next year.
Generic drugs are approved by the FDA under the ANDA process, which is shorter and intended to be less time consuming than approving branded drugs. While the number of ANDAs submitted to the FDA continues to rise, CDER’s capacity for review and agency actions have increased, and the amount of time between submission and review has declined since GDUFA was enacted.
Janet Woodcock, director of CDER, said that meeting this goal “was a heavy lift” for her office, and said that GDUFA II should include hiring goals to increase the office’s capacity.
Related: Earlier this month, the FDA published performance and procedure goals for the sixth version of the Prescription Drug User Fee Act (PDUFA), which governs the relationship between prescription drug manufacturers and the FDA review and approval process (see the July 26, 2016 Health Care Current). Several industry leaders expressed broad support for the goals of PDUFA VI, which is up for reauthorization in September 2017.
Last week, the FDA also published the user fee schedules for FY 2017, showing lower application fees for the industry. New drug applications (NDAs) and biologic license applications (BLAs) fees are dropping by $168,050 – $336,100 from FY 2016 levels. New Biological Product Development (BPD) fees will be $33,610 – $67,220 lower. The agency states that because the industry is innovating so quickly and bringing more products to market, the FDA can lower fees for application review.
On the Hill & In the Courts
FDA issues draft guidance for medical device tracking
In recently released draft guidance, the FDA clarified the data requirements for Unique Device Identifiers (UDI), saying that it recommends the UDI be in both plain text and automatic identification and data capture (AIDC) form on the label and package of each device. Additionally, labelers must submit information to the FDA's Global Unique Device Identification Database (GUDID).
Beginning September 24, 2016, all Class II medical devices must comply with these regulations and be labeled by a UDI. Class I and non-classified devices must meet UDI regulation in 2018.
Related: FDA commissioner, Robert Califf, and CMS acting director, Andy Slavitt, sent a letter last month to the chair of the Accredited Standards Committee, Gary Beatty, to request support for additional UDI collection. The letter requested a device identifier (DI) requirement in the next medical claims form version. The FDA is accepting comments on the UDI draft guidance until September 26, 2016.
CMS requests industry input on amendments to the Open Payments program
CMS is hosting an open door forum for stakeholders to discuss the future of the Open Payments program. It requests input on several of the program’s provisions and definitions. Open Payments is a mandatory national disclosure program created by the ACA. The program requires CMS to publicly release information about financial relationships between medical supply, drug, or device manufacturers or group purchasing organizations (GPOs) and physicians and teaching hospitals.
The 2015 data was published on July 1, 2016, which is the second full year of data released under the program. That year, manufacturers and GPOs reported $7.52 billion in payments, ownership, and investment interests to physicians and teaching hospitals.
Stakeholders, industry leaders, and CMS would like to improve the applicability and accuracy of the data the program reports. According to the American Medical Association (AMA), technical challenges and errors can prevent physicians and providers from participating in the program. The AMA says that the statutory language for the program also includes several ambiguities, including the definition of “financial relationships.” CMS has also received comments about the definition of a teaching hospital.
The forum will give CMS the opportunity to hear recommendations from industry leaders and stakeholders about the Open Payments program. CMS is seeking suggestions and feedback on the following program components:
Blog: States use all-payer claims data to spur innovation
A recent blog from the National Academy for State Health Policy (NASHP) explores how data from all-payer claims databases (APCDs) may support health care reform. APCDs are databases that contain eligibility and medical, pharmacy, and dental claims data from private and public payers in a state. Eighteen states use APCDs for evidence-based policymaking and to track health care spending.
NASHP reviews specific accomplishments from five states’ APCDs:
The blog post discusses how the Supreme Court’s decision on a recent case (see the December 8, 2015 Health Care Current) limits the scope of APCDs by excluding data from self-funded plans. Though the case set a new precedent for what kind of data states can collect, the US Department of Labor recently proposed adding high-level health insurance claims reporting to employers’ annual filing under the Employee Retirement Income Security Act (ERISA), starting in 2019.
(Source: Tamara Kramer, “Data for change: How states have used APCDs to Drive Innovation,” NASHP, July 2016)
Around the Country
AHRQ awards three states funding for opioid addiction treatment training
The Agency for Healthcare Research and Quality (AHRQ) recently announced a three-year, $9 million grant program to help improve treatment for opioid addiction in rural communities. The program will focus on training rural primary care practices in Oklahoma, Colorado, and Pennsylvania and is expected to reach more than 20,000 individuals with opioid addiction. Practices will use technology, including patient-controlled smart phone applications, remote training, and Project ECHO (a hub-and-spoke style telemedicine training program that launched in New Mexico in 2011 to treat and monitor Hepatitis C).
States with this funding have widespread misuse of opioids. In Bent, Colorado, for example, the rate of overdose deaths has increased from less than 10 to more than 20 people per 100,000 since 2002. While the details of the three grant programs differ, they share the goal of expanding access to these innovative treatments and delivering addiction support services in underserved areas. Differences among the grant programs include:
Making strides in heart disease prevention
In July, CMS announced it has selected 516 health care organizations to participate in the Million Hearts® CVD Risk Reduction Model. The model is a randomized, controlled trial that provides targeted incentives for clinicians to engage in beneficiary cardiovascular disease (CVD) risk calculation and population-level risk management. The model aims to focus on the individual components of CVD risk. Participating organizations will engage in risk stratification across a beneficiary panel to identify those at highest risk for atherosclerotic cardiovascular disease (ASCVD), and ultimately, strive to prevent heart attacks and strokes for tens of thousands of eligible Medicare beneficiaries.
CMS and the US Centers for Disease Control and Prevention (CDC) launched the Million Hearts campaign in 2012 and set the goal of preventing one million heart attacks and strokes by 2017. The early years of the campaign focused on encouraging a targeted focus on the “ABCS” – Aspirin for people at risk, Blood pressure control, Cholesterol management, and Smoking cessation–which address the major risk factors for cardiovascular disease and can help to prevent heart attacks and strokes. Through a series of challenges, the campaign engaged private and public partners across the health care system.
This latest Risk Reduction Model comes out of the CMS Centers for Medicare and Medicaid Innovation. In the pilot, physicians will use predictive modeling to identify patients at risk of developing cardiovascular disease, using health data to assign individual risk scores and design intervention plans. Physicians will measure risk using age, race, cholesterol levels, systolic blood pressure, and the use of statins, antihypertensive medication, or aspirin therapy. Smoking history and diabetes status are also risk factors.
The pilot will run for five years, and CMS is aiming to involve approximately 20,000 clinicians, including practitioners from general practice, internal medicine, and geriatrics, along with 3.3 million Medicare FFS beneficiaries.
Analysis: The model is innovative because it aims to lower CVD risks across the population. Currently, health care practitioners are paid to screen for blood pressure, cholesterol, or other risk factors individually. This approach, however, will use data-driven predictive modeling approaches to generate individual risk scores and mitigation plans for eligible Medicare FFS beneficiaries. As part of the Risk Reduction Model, health care providers can earn per-member-per-month payments to help pay for the care management of high-risk cardiovascular disease patients.
(Source: CMS, “Medicare announces participants for a new initiative to prevent heart attacks and strokes,” July 21, 2016)