Here are 4 key Health Policy Items in the Inflation Reduction Act

Fierce Healthcare | By Robert King

The House passed on late Friday a sweeping healthcare, climate and taxes package that includes major reforms on drug prices and extends boosted Affordable Care Act subsidies through 2025.

But the sweeping Inflation Reduction Act, which now heads to President Joe Biden for his signature, could reshape many other aspects of the healthcare industry. It would give Medicare the power for the first time to negotiate a small subset of Part D and Part B drugs.

Here are four other health policy changes to look for in the bill:

  • Expands eligibility for low-income Part D subsidies. The bill expands who can qualify under the Low-Income Subsidy Program that helps meet Part D cost-sharing burdens like deductibles. Currently, a beneficiary qualifies for the program if they earn up to 135% of the federal poverty level and get partial benefits for 135% to 150% of the level. The law would expand full benefits to those who earn between 135% and 150%, according to an analysis from the Kaiser Family Foundation.
  • Gets rid of the cost sharing for adult vaccines for Medicare Part D. It also requires states to cover all vaccines for Medicaid and Children’s Health Insurance Program beneficiaries. The benefit though only applies to any vaccines that get cleared by the Centers for Disease Control and Prevention's Advisory Committee on Immunization Practices.
  • Delays the controversial Part D rebate rule, again. The Trump-era rule would get rid of the safe harbor for Part D rebates, leaving them open to prosecution under federal anti-kickback laws. The rule passed at the tail end of Trump’s term but has never gone into effect. The law would delay the rule from going into effect again into 2032.
  • Limits the premium growth on Medicare Part D to no more than six percent a year from 2024 through 2029. The cap on premium growth is intended to mitigate the impact of other changes to Part D, said Ryan Urgo, managing director of the policy practice at consulting firm Avalere Health. The legislation includes a $2,000 out-of-pocket cost cap on Part D drugs, spread out in installments for the beneficiary over a calendar year. Part D plans will also have to pick up more of the costs for spending in the catastrophic coverage phase, which a beneficiary reaches when their drug costs reach a certain level.

Experts say regulating the bill will have a big impact on providers, including those that rely heavily on reimbursements for Medicare Part B drugs. 

Some providers purchase their own products under a buy and bill model and then get reimbursed by Medicare for the average sales price of the Part B drug plus 4% for storage and handling costs. The problem is that model doesn’t work if Medicare will reimburse for a smaller negotiated rate, experts say.

“If you are buying high and getting paid low you are, in essence, underwater,” Urgo told Fierce Healthcare. “If you are buying a drug at $1,000 and the reimbursement under Medicare with [the negotiated price] is only $800 you are $200 in the red. To address that there is going to be a need for providers to purchase products at the [negotiated rate] as opposed to market prices.”

The Community Oncology Alliance has raised concerns about this potential change. 

“History has clearly documented that bluntly cutting Medicare payments like proposed in the reconciliation bill, will lead to cancer practice closures and consolidations,” said COA Executive Director Ted Okon in a statement back in July when the drug price reform text was introduced. 

Sen. John Barrasso, R-Wyoming, proposed an amendment to the bill that would have required drugmakers to rebate the government any excess costs above the negotiated prices. The amendment was not agreed to before the final passage earlier this month. 
 

Special Report — Complying with Wage and Hour Regulations

The SESCO Report July/August, 2022 (Part 1 of 3*)

Common Misconceptions and Compliance Issues

SESCO is available through a Professional Service Agreement or through a per diem fee to conduct a thorough Wage and Hour as well as HR and employment law audit. Contact SESCO to learn more about our Professional Service Agreement and services provided to clients in all industries across the country — [email protected] or 423-764-4127.

Salary Basis

To qualify for exemption from overtime, Administrative, Executive and Professional employees have to be paid at least $684 per week on a guaranteed basis. Note that the Outside Sales Exemption requires no guaranteed salary, more less minimum wage. The Computer Exemption requires at least $684 per week on a salaried basis or paid on an hourly basis at a rate not less than $27.63 per hour.

Misconception 1: If an employee is paid on a guaranteed salary basis of at least $684, regardless of duties, they are exempt from overtime. This is incorrect as to be exempt from overtime under the white-collar exemptions as noted, the employee must meet the duties test as set forth under each exemption by the FLSA and meet the salaried basis requirements.

Misconception 2: Nonexempt employees cannot be paid on a salaried basis. Nonexempt employees are simply required to receive overtime for hours worked in excess of 40 hours per week (federal basis) based on their regular rate of pay. They also must meet at least federal or state minimum wage requirements. As such, a nonexempt employee can be paid on a salaried basis, salary plus commission, commission only, hourly plus commission or other types of pay plans. As long as the employee receives on average for each hour worked minimum wage and receives time and one-half of their regular rate for hours in excess of 40 hours per week, the pay plan is compliant.

In computing the regular rate for overtime purposes, the regular rate is determined by totaling all monies earned for the given workweek (hourly/salary wages, commissions and bonuses, spiffs and other incentives). These total earnings are then divided by total hours worked. The additional half-time is calculated by multiplying the overtime hours times half-time of this regular rate.

Misconception 3: Under the salaried basis rule, we cannot deduct from the salary for any reason. An exempt employee's salary can be reduced for specific reasons. These include:

  • Deducting pay for violations of safety rules
  • Suspending an exempt employee for disciplinary reasons
  • Reducing pay, even on a partial day's absence for intermittent family and medical leave
  • When an exempt employee is out sick for the whole day and does not have any accrued or earned sick/leave/PTO time

Please note that the only time we can deduct from the salary in partial day's work is for intermittent family and medical leave. However, we can require the exempt salaried employee to utilize any earned, unused sick time/leave/PTO. Once exhausted, an exempt employee missing time in partial day increments must be paid for the full day.

If out of accrued/earned time, an employer can deduct in full-day increments for those reasons as noted above.

Misconception 4: We can make deductions from an exempt employee's salary while they are out for jury duty. An employer cannot make deductions from the pay of an exempt employee for absences caused by jury duty, attendance as a witness or a temporary military leave. However, an employer can offset fees received such as jury fees, witness fees or military pay for a particular week against the salary for that week.

Misconception 5: If an exempt employee is separated from the company, we must pay him/her for the full week of salary regardless of the number of days worked. An employer is not required to pay the full salary in the first or last week of employment if the employee does not work the full week. You are only required to pay the salary for the actual days worked.

Misconception 6: If we have exempt employees working more than 40 hours or performing extra duties and we pay them overtime or additional monies based on hours of work, they lose their exemption status. The only requirement for an exempt position's compensation is the guaranteed salary basis of $684 per week (less Outside Sales Exemption). An employer can provide additional monies based on hours worked, commissions based upon results, etc. without losing the exemption status.

*Tune-in next newsletter for Part 2 of 3
 

Getting Help for Your Mental Health

Taking good care of your mental health is an important health priority, especially during stressful times such as the COVID-19 pandemic. We have resources on our website that may help, including our fact sheets on stress, depression, and anxiety. You can also find helpful brochures and fact sheets on the National Institute of Mental Health website. 

If you (or someone you know or care about) are in immediate distress you can call, text, or chat the 988 Suicide & Crisis Lifeline, which is now active across the United States. 988 is a new, shorter phone number that will make it easier for people to get mental health crisis services. The old number, 1-800-273-TALK (8255), still works, and it will continue to function indefinitely.  

Get More Information
 

The Latest on Monkeypox

By the National Institute for Health Care Management

The World Health Organization declared the monkeypox outbreak a global health emergency as the number of confirmed cases has increased to over 30,000 across 88 countries with more than 8,900 cases in the U.S. (as of August 8th, 2022). On August 4th, President Biden declared monkeypox a national public health emergency. 

  • Vaccines: The U.S. Food and Drug Administration announced that nearly 786,000 doses of the monkeypox vaccine will be made available for distribution. The Centers for Disease Control and Prevention (CDC) estimates that nearly 1.5 million people are eligible for the vaccine.
  • Not a Sexually Transmitted Infection (STI): While monkeypox cases have predominately been found among men who have sex with men, it is neither an STI nor does it only impact specific communities. Transmission can occur through skin-to-skin contact, touching contaminated objects, respiratory secretions, and during pregnancy. Experts have warned that stigmatizing messaging reinforces stereotypes and can undermine response efforts, as was the case during the HIV/AIDS epidemic. 
  • Impact on Health Clinics: Sexual health clinics, which have already been under pressure from years of underfunding and COVID-19, are now on the frontline of the growing monkeypox outbreak. 
  • Outlook: Many have compared the response to monkeypox in the U.S. to that of the beginning of the COVID-19 pandemic. Despite recent expansions in testing capacity, areas are still facing shortages, delays in getting results, and a lack of reliable ways to test.

Resources:
 

Q&A on the Overdose Crisis

By the National Institute for Health Care Management

The CDC estimates that more than 107,000 Americans died of drug overdoses last year - a record high. Learn more about the overdose crisis:

Q: How are racial disparities widening in overdose deaths?
A: According to a CDC report, overdose deaths are increasing fast among Black and Indigenous people. Black people ages 15 to 24 had an 86% increase in death rates compared to a 34% increase among White people of the same age group. The disproportionate increase among Black and Indigenous people may be due to health inequities, like unequal access to treatment.

Q: What is the role of fentanyl in the overdose crisis?
A: Deaths involving illicitly manufactured fentanyl are on the rise, which is often mixed with other illicit drugs without the user’s knowledge. Fentanyl-related deaths in the U.S. occur more often than gun and auto-related deaths combined. The Drug Enforcement Agency warns of a nationwide spike in fentanyl-related mass-overdose events. 

Q: How does harm reduction reduce overdose deaths?
A: The Biden administration’s strategy to address the overdose crisis is the first to incorporate harm reduction strategies, which include access to naloxone (the antidote to opioid overdoses), sterile needles, drug test strips, and supervised injection sites. 

Q: Are people with addiction able to receive treatment?
A: A recent study found that 87% of people with opioid use disorder (OUD) do not receive evidence-based treatment. Medications for OUD can reduce opioid overdoses by 50%.

Q: What about people with chronic pain?
A: The 2016 CDC guidelines for prescribing opioids for pain have been credited with leading to harmful consequences for patients with chronic pain. The 2022 proposed guidelines remove the upper limits for prescription opioids, emphasize a patient-centric approach, and expand on alternative treatments.

Resources & Initiatives:

SAMHSA’s National Helpline for individuals and families facing mental and/or substance use disorders is 1-800-662-HELP.
 
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