The newsroom includes access to CHA News, which provides timely information to members every Monday and Thursday and is at the core of CHA benefits. In addition, it is also home to resources such as toolkits and talking points designed to help member hospitals and health systems communicate with internal and external audiences on a range of current health care-related issues. Links to CHA media statements and press releases can also be found here.  

Federal Judge Rules Against 340B Reimbursement Cuts

Last week, a federal judge ruled that the Department of Health and Human Services (HHS) exceeded its authority in the 2018 outpatient prospective payment system (OPPS) by substantially reducing reimbursements under the 340B Drug Pricing Program.

“While the secretary is permitted to make ‘adjustments’ to those rates for whatever reasons he deems ‘necessary,’ adjustments are all he can make,” Judge Rudolph Contreras wrote. “He cannot fundamentally rework the statutory scheme — by applying a different methodology than the provision requires.”

The 2018 OPPS final rule changed 340B payments from average sales price plus 6 percent to average sales price minus 22.5 percent, for an estimated loss of $1.6 billion to 340B hospitals. The 2019 OPPS final rule includes the same payment methodology. However, the lawsuit did not explicitly challenge the 2019 OPPS rule.

In light of the ruling, the U.S. District Court in Washington, DC, directed the parties to provide a supplemental briefing on the appropriate remedy within 30 days of its decision. Depending on the court’s decision, one or both parties may appeal, which would cause the case to stretch well into 2019 and possibly beyond. Since the decision did not affect the rate reduction in the 2019 OPPS rule, it is possible that the plaintiffs will challenge that rule as well.

CHA will continue to update member hospitals on the progress of the case and other developments related to the 340B program.

New Law Changes Training Requirements for Medical Licensure in California Starting in 2020

A new law that takes effect in 2020 requires all physicians obtaining a California license to have at least three years of post-graduate training, rather than the current one year of training. 

While in training, all residents and fellows will be required to obtain a postgraduate training license that is valid for maximum of three years. After three years of training, residents and fellows will be required to obtain a full and unrestricted California medical license. The Medical Board of California has recently posted a podcast about the new training requirements.

CDC Updates Alert on Life-Threatening Coagulopathy Associated with Synthetic Cannabinoids

The Centers for Disease Control and Prevention has updated its health alert addressing a multistate outbreak of coagulopathy — a bleeding disorder that impacts the way blood clots — that has been linked to synthetic cannabinoid use.

According to the updated guidance, some patients who have been treated thus far continue to present with symptoms of synthetic cannabinoid use, suggesting that they kept using the products despite medical advice. Clinicians are reminded to maintain a high degree of suspicion for continued or resumed use of synthetic cannabis, and counsel patients against the products’ use. In addition, contact poison control (800-222-1222) for questions on diagnostic testing and management of these patients and promptly report possible cases to your local public health department. To date, no cases have been reported in California.

CMS Finalizes Changes to Medicare Shared Savings Program

The Centers for Medicare & Medicaid Services (CMS) has issued a rule finalizing significant changes to the Medicare Shared Savings Program (MSSP), intending to accelerate the timeline for accountable care organizations (ACOs) to take on downside risk.

The changes finalized are effective for MSSP agreements beginning July 1. Notably, CMS requires all organizations that intend to apply for the MSSP program in 2019 to complete the Notice of Intent to Apply by Jan. 18. CHA is interested in hearing from members considering participation. 

In addition to policies previously finalized in the calendar year 2019 physician fee schedule final rule, CMS finalizes the following changes to the MSSP:

  • Redesign the MSSP to include only two tracks – Basic and Enhanced.
  • Allow a maximum of two or three years of participation in upside-only risk.
  • Reduce shared savings rates for upside-only models from 50 to 40 percent.
  • Differentiate between “low-revenue” and “high-revenue” ACOs, and require high-revenue ACOs to take on more risk more quickly.
  • Increase the length of agreement periods to at least five years.
  • Allow all ACOs to elect prospective beneficiary assignment or preliminary prospective assignment with retrospective reconciliation.
  • Expand the use of regional factors in the benchmarking methodology.
  • Allow ACOs’ risk scores to decrease by an unlimited amount, without the proposed 3 percent cap.
  • Increase access to waivers of telehealth and other Medicare payment requirements.

CHA will issue a detailed summary of the final rule in the coming weeks. Additional information is available in a CMS fact sheet

CHA Issues Summary of CY 2019 OPPS Final Rule

CHA has issued a summary of the Centers for Medicare & Medicaid Services’ final rule addressing rate updates and policy changes to the Medicare outpatient prospective payment system (OPPS) and ambulatory surgical center payment system for calendar year (CY) 2019.

The final rule includes annual updates to the Medicare fee-for-service outpatient payment rates, as well as regulations that implement new policies. It includes policies that will:

  • Make payment changes for excepted and non-excepted clinic visits furnished in off-campus provider-based departments (PBDs)
  • Extend the 340B drug payment adjustment of average sales price minus 22.5 percent to non-excepted PBDs
  • Change the rate for biosimilars purchased by hospitals through the 340B program
  • Change the inpatient-only list
  • Change exceptions to the list of services that are packaged into ambulatory payment classifications, as opposed to separately paid

CHA DataSuite issued hospital-specific analyses intended to show providers how Medicare outpatient fee-for-service payments will change from CY 2018 to CY 2019 based on the final rule’s policies.

CHA Issues Summary of Medicaid Managed Care Proposed Rule

CHA has released a summary — prepared by Health Policy Alternatives — of the Centers for Medicare & Medicaid Services (CMS) proposed rule revising Medicaid managed care and Children’s Health Insurance Program (CHIP) regulations.

CHA continues to review the proposed rule, particularly with a focus on understanding the proposed changes related to pass-through and directed payments, and any implications or opportunities related to the Hospital Fee Program supplemental managed care payments. In addition, CHA is closely reviewing proposals related to network adequacy and the potential impact on mental health plans. Comments on the proposed rule are due Jan. 14.

This content is restricted to members.

FFY 2019 Uncompensated Care Payments to Come From 2014, 2015 Worksheet S-10 Data

In the federal fiscal year (FFY) 2019 inpatient prospective payment system final rule, the Centers for Medicare & Medicaid Services (CMS) finalized its second year of a three-year transition to use Worksheet S-10 data for distributing Medicare disproportionate share hospital (DSH) uncompensated care payments. CMS will use two years (FFYs 2014 and 2015) of Worksheet S-10 cost report data and one year of proxy data to distribute the uncompensated care payments for FFY 2019.

In response to comments from CHA, CMS noted in the final rule that it planned audits of the data in fall 2018. In late August, CMS began audits of selected hospitals’ FFY 2015 cost reports. A number of hospitals in California have received this data request, and must respond by Sept. 28.  

Because CMS has given the Medicare administrative contractors (MACs) only until the end of January to complete the audits, providers have a short timeline to complete this work with their MACs. Though CHA acknowledges that this presents a challenge from both technical and resource perspectives, CHA highly encourages hospitals that have received a request to respond as quickly as possible. Early communication with Noridian (or its subcontractor, Figliozzi & Company) is critical under this short timeline. A copy of the letter Noridian sent to select providers requesting documentation is attached; these letters are consistent across all MACs.

Toyon Associates, on CHA’s behalf, recently conducted an analysis of the June Health Care Provider Cost Report Information System files for FFY 2014, 2015 and 2016 Medicare cost reports. This analysis demonstrates the continued need to audit Worksheet S-10 data to ensure they are reliable and valid for purposes of payment. CHA recommends that hospitals review the Toyon analysis, along with their most recently identified cost reports, to determine whether they need to make additional changes for future years. CHA anticipates that any adjustments made through the audit process will affect FFY 2020 Medicare DSH uncompensated care payments, and that CMS will continue to audit Worksheet S-10 data for future years.      

In the final rule, CMS noted that it will continue to work with stakeholders — through provider education and further refinement of the instructions for the Worksheet S-10 — to address concerns over reported data accuracy and consistency. CHA is committed to working with CMS on this effort. In addition, CHA is working with Noridian and its subcontractor to help ensure shared understanding of expectations related to the data request and subsequent audit. CHA will reconvene its Medicare DSH workgroup to identify opportunities in which CHA can promote clarity in the process and offer solutions to problems that may arise. CHA is collecting information from the field in an effort to help CMS standardize the process going forward. To review CHA’s Worksheet S-10 resources, visit

CHA Comments on CY 2019 Outpatient PPS Proposed Rule

CHA has submitted the attached comment letter on the calendar year (CY) 2019 outpatient prospective payment system (OPPS) proposed rule. In reviewing the policy and payment proposals outlined in the proposed rule, CHA is concerned that the agency has taken steps that are not only unlawful, but threaten the financial stability of the hospital OPPS and, in turn, access to care for Medicare beneficiaries. In particular, CHA strongly opposes CMS’ proposals to expand site-neutral payment policies for off-campus PBDs and to expand payment cuts for non-excepted PBDs participating in the 340B Drug Pricing Program. In addition, CHA provides comments on a number of other proposed payment and policy provisions. Specifically, CHA:

  • Urges CMS to withdraw all three of its proposals to expand site-neutral payment policies in off-campus PBDs
  • Opposes CMS’ proposal to reduce payments for separately payable Part B drugs from wholesale acquisition cost (WAC) plus 6 percent to WAC plus 3 percent
  • Urges CMS to unpackage non-opioid pain management drugs in ambulatory surgical centers, as well as in hospital outpatient departments under the OPPS
  • Supports the proposed removal of measures from the Outpatient Quality Reporting Program and urges CMS to take steps to accelerate its timeline for removal
  • Encourages CMS to ensure coding, billing, cost reporting and payment decisions for chimeric antigen receptor T-cell (CAR-T) therapy are aligned and consistent, with appropriate guidance provided to ensure accurate and reliable reporting
  • Opposes the creation of additional Medicare Conditions of Participation (CoPs) to require the electronic transfer of health information, and urges the agency to reject a piecemeal approach to CoP revisions that does not consider implications across the delivery system

CHA encourages members to share their comments with CHA. Comments on the proposed rule are due Sept. 24 by 2 p.m. (PT) and can be submitted at

CHA Issues Summary of Physician Fee Schedule Proposed Rule

CHA has released the attached summary of the calendar year 2019 physician fee schedule (PFS) proposed rule, which also outlines proposed provisions implementing the third year of the Quality Payment Program (QPP) for physician payment.

The summary provides detailed information on a number of proposed policies, including payment for non-excepted off-campus provider departments, reduced administration burden for evaluation and management services, a reduction of payment for new Part B drugs and the implementation of Bipartisan Budget Act of 2018 provisions related to therapy and telehealth services.

The summary also details proposed updates to the Merit-based Incentive Payment System (MIPS) under the QPP, including an expanded definition of MIPS-eligible clinicians, a reduction of the MIPS measure set and proposed testing of the Medicare Advantage Qualifying Payment Arrangement Incentive Demonstration.

Comments on the proposed rule are due Sept. 10 by 2 p.m. (PT).

CHA will host a member forum on Aug. 30 at 10:30 a.m. (PT) in anticipation of submitting comments.

To participate, please register at by noon (PT) on Aug. 29.

Press Contact

Jan Emerson-Shea
Vice President, External Affairs
(916) 552-7516

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