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Deloitte's Life Sciences & Health Care Blog

Navigating the blizzard of health care regulation and legislation

Well before the blizzard hit Washington, DC last week, we had plenty of warning. News channels had continuous coverage predicting record snowfalls, which sent people scurrying to grocery stores. For those unconvinced that the city could be paralyzed, a light dusting of snow that fell a few days before the big event turned their afternoon commute into mayhem.

Knowing it was coming, I, of course, had a plan. I had previously arranged to depart on a snowboarding trip with my kids on Friday afternoon—which turned out to be right when the storm was supposed to hit. Consequently, on Tuesday, I switched our flight to early Friday morning and proudly told my wife, Kerry, that I had managed to get the last few seats.

“My next husband will make better choices,” Kerry slyly replied, highlighting that she would be left to fend for herself in a blizzard with our dog.

Then, we began to prepare. Kerry filled the gas tanks and gathered extra food, water, and cash. I picked up some new lip balm and sunscreen and located my bathing suit in case there was a hot tub at the hotel.

For a city that regularly gets snow, having so much fall so quickly was a huge strain. And, while I was keeping myself busy with vacation preparations and nature was blanketing the city, Washington was hard at work, blanketing health care with a flurry (apologies) of discussion around recent regulation and legislation.

While I was at the J.P. Morgan Annual Health Conference in San Francisco earlier in January, the US Centers for Medicare and Medicaid Services (CMS) acting administrator set the industry abuzz when he said that the federal meaningful use program for electronic health records (EHRs) would be replaced. A few days later, he followed up with a blog post that clarified things a bit more:

“[The] Medicare Access and CHIP Reauthorization Act of 2015 (MACRA)…considers quality, cost, and clinical practice improvement activities in calculating how Medicare physician payments are determined. While MACRA also continues to require that physicians be measured on their meaningful use of certified EHR technology for purposes of determining their Medicare payments, it provides a significant opportunity to transition the Medicare EHR Incentive Program for physicians towards the reality of where we want to go next.”

MACRA also removed the sustainable growth rate (SGR) methodology from the Medicare physician fee schedule in favor of a system that emphasizes payment updates based on quality and outcomes. Furthermore, while MACRA impacts how physician adoption of EHRs is measured, meaningful use for eligible hospitals remains in place and is not affected by MACRA. Though the details are still being refined, it will work to align measures and move physicians and other clinicians away from fee-for-service payments and toward a more coordinated care system.

Meanwhile, at this year’s Patient Safety Summit, former President Bill Clinton highlighted how the lack of EHR interoperability is hindering patient safety. Using a personal family story, he emphasized that the patient safety movement could achieve large-scale success in reducing medical errors and eliminating preventable patient deaths if interoperability is made a top priority. There has been plenty of movement in Washington to see that this is achieved:

  • Last week, the US Food and Drug Administration (FDA) released draft guidance to provide design considerations for interoperable devices, as well as recommendations for labeling. The guidance encourages device manufacturers to disclose their standards as a way to enhance interoperability, patient safety and outcomes.
  • The Senate Health, Education, Labor and Pensions (HELP) committee has expressed its intent to improve EHR interoperability. Last week, however, it also announced that it would not take up the House-passed 21st Century Cures Act, which calls for significant strides in this area. After more than a year of working on a far-reaching bill that addresses medical innovation, interoperability, and cures, the bill is now stalled in the Senate, mostly over disagreement on how to pay for it. The committee instead plans to focus on many of the same goals in less comprehensive legislation.
  • MACRA also included provisions to move the system toward greater interoperability, setting interoperability as a national priority by 2018 and requiring the US Department of Health and Human Services (HHS) to establish metrics to assess EHR interoperability by July 1, 2016.

As I noted in the April 21, 2015 Health Care Current, I still can’t predict how soon health technology will be interoperable, but pressure from many sectors to achieve it is continuing to rise.

Finally, the impending presidential election has begun to exert a strong influence over policy discussions—in health care and beyond. While the Obama administration likely aims to implement as much of the Affordable Care Act (ACA) as it can prior to leaving office, the candidates are starting to discuss ways that they want to stray from the agenda of the last eight years.

Stakeholders may now need to shift attention toward any new requirements that come in future legislation and regulation, such as limiting cost-sharing on prescription drugs or requirements around plans networks and how that may affect premiums. Additionally, the Administration has said it will provide final updated guidance on the requirements of the 340B drug pricing program by September 2016, after releasing draft guidance in August 2015. These regulations could affect eligibility for organizations, drugs, and patients alike.

In “Top regulatory trends for 2016 in life sciences and health care: A forward look,” my colleague, Anne Phelps, Deloitte Advisory principal and US Health Care Regulatory Leader, Deloitte & Touche LLP, explained that the Cadillac tax on employer health plans, Medicare payment reform, Medicaid managed care regulations, and life sciences issues are just a few of the issues that will likely have a significant impact on the health care market in the year ahead.

Regulation and legislation in health care is nothing new, but what may be unprecedented is the amount falling at once. Managing it requires careful planning, proper preparation, and thoughtful prioritization. One should also consider unintended consequences and long-term implications of overlapping or inconsistent guidance.

When the storm hit, Kerry was ready. After hunkering down overnight, her first objective was to create a way for the dog to go outside. Next was to clear the 25 to 30 inches of snow from the front door, and uncover the drain in front of the garage so the melting snow would not create enormous sheets of ice overnight. Then came the grueling work of shoveling the driveway.

Meanwhile, the boys and I grappled with our own decisions, namely navigating the buffet at the resort. Ever-mindful of our long-term goals, just before heading to the airport we stopped in a jewelry store and said, “We’re looking for something that says ‘We’re sorry we abandoned you in a blizzard, but also respect your desire for us not to spend too much.’”

Read the entire Health Care Current here and subscribe to receive weekly updates.

Author bio

As director of the Deloitte Center for Health Solutions, Dr. Greenspun serves health care, life sciences, and government clients on key innovation and clinical transformation issues. He has been named one of the “50 Most Influential Physician Executives in Healthcare” by Modern Healthcare, co-authored the book “Reengineering Healthcare,” and has served on advisory boards for the World Economic Forum, WellPoint, HIMSS, Georgetown University. Prior to joining Deloitte, he served as the Chief Medical Officer for Dell.