House Committee urged to extend funding for federal safety net programs

Extend funding for the Children’s Health Insurance Program (CHIP) to ensure continuity of coverage for children, particularly in light of the current uncertainty surrounding other sources of health coverage in the U.S., witnesses urged at a House Committee on Energy and Commerce hearing titled “Examining the Extension of Safety Net Health Programs.” The purpose of the hearing was to examine the extension of funding for two federal safety net health programs that provide health care and coverage for low-income adults and children, CHIP and the Community Health Center Fund (CHCF).

CHIP

CHIP is a program that provides health coverage to targeted low-income children and pregnant women in families that have annual income above Medicaid eligibility levels but have no health insurance. It is jointly financed by the federal government and states, and the states are responsible for administering the program. A memo from the committee majority staff states that in fiscal year (FY) 2015, 8.4 million children received CHIP-funded coverage.

Section 2101 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) increased the CHIP enhanced federal medical assistance percentage (E-FMAP), which varies by state, by 23 percent from October 1, 2013 through September 30, 2019. Since the ACA did not include additional or extended funding for CHIP, MACRA extended funding through September 30, 2017. The Medicaid and CHIP Express Lane Option, Child Enrollment Contingency Fund, CHIP Qualifying State Option, and CHIP Outreach and Enrollment Grants also expire September 30, 2017.

At the hearing, Cindy Mann, partner at Manatt, Phelps & Phillips, touted the success of CHIP, which covers 8.9 million children nationwide. She stated that Congress must consider the overall level of funding for CHIP, in addition to the E-FMAP funds, which “are now fully integrated into states’ budgets and a key source of funding for sustaining CHIP.” She said that Congressional action is needed as soon as possible to ensure program continuity, budget certainty for states, and stable coverage for children, particularly those with special health care needs. She urged a five-year extension instead of two to provide needed stability (see Extend CHIP, protect DSH payments, MACPAC tells Congress, March 16, 2017).

Jami Snyder, Director of the Medicaid and CHIP programs for the state of Texas, noted that a decision to not reauthorize the CHIP program would result in a loss of over $1 billion in annual funding to the state of Texas and a loss of coverage for more than 380,000 Texas children.

Health Center Program

The Health Resources and Services Administration’s (HRSA) Health Center Program, authorized under Section 330 of the Public Health Service Act, awards grants to federally qualified health centers (FQHCs). The program is supported by discretionary appropriations and the CHCF, a mandatory multibillion-dollar fund established by Section 10503 of the ACA. The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (P.L. 114-10) extended funding through fiscal year 2017. According to the staff memo, the CHCF represents over 70 percent of the Health Center Program’s FY 2016 funding.

Michael Holmes, the chief executive officer of Cook Area Health Services, an FQHC in Minnesota, testified that as a result of CHCF investments new FQHC were added in more than 1,100 communities. With the extension nearing its expiration date, he “strongly urged” Congress to renew funding for at least five years to allow FQHCs to provide a stable and reliable source of access to patients and recruit and retain a comprehensive health care workforce.

340B a small program with tricky compliance field

Although drug spending under the 340B program is a small fraction of drug spending in the country overall, compliance remains important for all entities involved: hospitals, pharmacies, and manufacturers. In a Health Care Compliance Association webinar entitled “340B Program: Finding Clarity in Uncertain Times,” presenters Karolyn Woo and Tony Lesser, both from Deloitte & Touche LLP, advised listeners to allocate the necessary resources to ensure compliance in light of increased audit activity.

340B program

Created by section 340B of the Public Health Service Act (PHSA), the program requires drug manufacturers participating in the Medicaid program to provide outpatient drugs to participating health care organizations at reduced prices. These discounts allow providers to save between 25-50 percent on outpatient drug costs. However, for perspective, 340B spending only accounted for just over $12 billion of the $310 billion spent on drugs in 2015.

Oversight and audits

Despite the program’s relatively small size, Woo and Lesser underscored the necessity of compliance, noting the Health Resources and Services Administration’s (HRSA) increased oversight activity. The agency has recently contracted experienced auditors, who focus on eligibility, drug diversion, duplicate discounts, and billing accuracy. If issues are found during the audit, the HRSA Office of Pharmacy Affairs (OPA) will review these issues, present a corrective action plan to HRSA, and finalize its report. Drug diversion is the most common issue, and repayment to manufacturers was required in over half of the completed audits in fiscal years (FYs) 2015 and 2016. Although there has been no uptick in the number of manufacturer audits recently, HRSA may contact an entity to request certain information outside of an audit, which should be presented as clearly as possible. In addition, specialty pharmacies, which often represent a high percentage of a manufacturer’s 340B revenue, may fall under particular scrutiny.

Compliance plan

Repayment requires that the covered entity and the manufacturer work out a financial remedy in good faith. The process is hampered by outdated OPA information, lack of deadline guidance, and differing repayment calculations. To avoid being placed in this situation, covered entities should create a compliance plan that ensures close oversight of 340B activity, starting with educating staff and reviewing 340B policies and procedures. Entities should perform internal audits to find areas of non-compliance, and learn how to prevent and detect identified issues. When areas of non-compliance are found, they should be reported to manufacturers, HRSA, or other entities as required.

$2.3B awarded to fund HIV/AIDS care, medications in 2016

Cities, states, and community organizations have received a total of almost $2.3 billion in Ryan White HIV/AIDS program grants. The program is overseen by the Health Resources and Services Administration (HRSA), and serves over 50 percent of people diagnosed with HIV in the United States. The program retained over 80 percent of those who received care in 2014, and over 81 percent of program clients were virally suppressed. All organizations receiving grants are working toward the goals found in the National HIV/AIDS Strategy.

Grants

To further these efforts, Part A of the program awarded about $627 million to 24 metropolitan areas and 28 transitional grant areas. These areas have the highest number of residents with HIV/AIDS or have an increased number of cases. Part B of the program awarded about $1.3 billion to allow states and territories to provide core medical and support services, and for the AIDS Drug Assistance Program (ADAP). Part B also issued Emerging Community and Minority AIDS initiative grants.

Part C Early Intervention Services (EIS) awarded about $186 million to local organizations that provide core services to HIV patients. Part C Capacity Development grants were also awarded to about 48 organizations. Part D awarded $66.6 million in grants to 115 organizations to fund family-centered care. Part F awarded several grants to fund dental care, as well as technical assistance and clinical training.

HHS marks Prescription Opioid and Heroin Epidemic Awareness week with $44.5M grant

The Health Resources and Services Administration (HRSA) and the Substance Abuse and Mental Health Services Administration (SAMHSA) will award more than $44.5 million in awards to training programs aimed at increasing the number of mental health providers and substance abuse counselors in the United States.  The funding includes 144 new and continuing grants through the Behavioral Health Workforce Education and Training (BHWET) program.

Behavioral Health Workforce Education and Training Program

 The BHWET program supports clinical internships and field placement programs for professional and paraprofessional behavioral health disciplines and occupations. The initiative serves children, adolescents, and transitional-age youth at risk for developing or who have a recognized behavioral health disorder by adding to the behavioral health workforce. Recipients of grants under this program are expected to expand the behavioral health workforce by participating in internships and field placements focusing on working with these at-risk individuals. Activities under the grant emphasize prevention and clinical intervention and treatment for those at risk of developing mental and substance abuse disorders and the involvement of families in preventing and treating behavioral health conditions.

Of the $44.5 million grant, more than $7.9 million will support a total of 34 new grantees, and the other $36.6 million will fund the program’s 110 existing grantees.

Prescription Opioid and Heroin Epidemic Awareness Week

President Barack Obama designated the week of September 18 – 23, 2016, Prescription Opioid and Heroin Epidemic Awareness Week. During this time, federal agencies focused on the work being done across government entities and announced new efforts to address the epidemic of prescription opioid and heroin abuse. In his announcement, Obama stated that he continues to “call on the Congress to provide $1.1 billion to expand access to treatment services for opioid use disorder.” The investments would build on the steps already taken to expand overdose prevention strategies and increase access to the overdose reversal drug naloxone.