Legislative Solutions: 2017 Virginia Legislative Recap

The following is a summary of key legislation impacting the health care industry in Virginia.

Reforming or Repealing Virginia’s Certificate of Public Need Program 

The study of the COPN process continues

A year-long study of Virginia’s existing Certificate of Public Need (COPN) process was followed by the introduction of seven bills in the House of Delegates and three bills in the Senate. These bills would have either begun the reform of Virginia’s existing COPN system or repealed existing COPN laws for most regulated services. The Virginia General Assembly passed only two of these bills in its 2017 session.

The House of Delegates’ health policy committee, the Health, Welfare and Institutions Committee, voted 11 - 10 to support HB 2337, legislation introduced by Delegate John O’Bannon (R) - Henrico County. The bill would have largely dismantled the existing COPN process, and the close vote reflects the Committee’s narrow support for substantial COPN reform. The legislation was ultimately left in the House Appropriations Committee without a vote. HB 2337 would have eliminated the requirement for COPN approval for the majority of services, replacing the COPN process with a permitting process. The bill would have retained COPN review of nursing home beds. In addition, HB 2337 would have amended the definition of charity care and related requirements. Senator Steve Newman (R) - Forest, Chairman of the Senate health policy committee, the Senate Education and Health Committee, explained that the Senate would not pass COPN reform legislation this year given the dearth of resources to assist hospitals which would have suffered financially under a COPN repeal. However, Senator Newman announced that the COPN law will remain subject to study in 2017.

Delegate Peter Ferrell (R) - Henrico introduced HB 1420, legislation that would have repealed COPN requirements for psychiatric beds. The House of Delegates passed the bill, but the Senate Education and Health Committee did not. However, the Joint Subcommittee to Study Mental Health in the 21^st Century (the Deeds Commission) will continue to examine the relevance of a COPN review for psychiatric services throughout 2017. A similar bill, SB 1141, introduced by Senator Glen Sturtevant (R) - Richmond, was likewise defeated by the Senate Education and Health Committee.

One of the COPN bills that passed in the 2017 General Assembly session was introduced by Delegate Kathy Byron (R) - Lynchburg. Delegate Byron’s HB 2101 amends the valuation of charity care furnished in satisfaction of COPN conditions effective July 1, 2019. In the meantime, the bill sets forth certain charity care data collection and reporting requirements for COPN holders subject to a charity care condition. The bill establishes a uniform framework for determining the value of charity care and directs the Virginia Commissioner of Health to create multiple reports that calculate value of charity care provided by each hospital or provider using:

• Medicare reimbursement rates (the new valuation and methodology effective July 1, 2019);
• Gross charges (the valuation methodology currently in place); and
• A standardized formula developed by Virginia Health Information (VHI) that is currently used to equalize the value of specific services provided.

The bill instructs the Commissioner to furnish these reports to the Chairmen of the health policy committees and the money committees in the House and Senate. The reports are intended to illustrate variations in the value of charity care under the current (gross charges) and future (Medicare allowable) methodologies and to assist the General Assembly in developing an appropriate charity care valuation.  The bill also states that “bad debt” (as defined in the bill) should not be included in charity care calculations and limits charity care to services furnished to indigent patients, effective July 1, 2017. The Governor has proposed an amendment to HB 2101 to allow providers to continue to include certain charity care services rendered to the underinsured. The original bill limited the applicability of the definition of “charity care” to the uninsured. The General Assembly will consider the Governor’s amendment when it reconvenes on April 5.

The other COPN bill approved by the General Assembly during its 2017 legislative session was HB 1544, which was introduced by Delegate Collins (R) - Winchester. HB 1544 permits the application of excess charity care furnished on one COPN condition to another COPN condition if both COPN-conditioned services are provided at the same facility and operated by the same COPN holder, pursuant to the Virginia Department of Health’s approval.

Addressing Virginia’s Opioid and Substance Abuse Epidemic

How changes to Virginia’s laws will impact health care providers

Responding to a 77% increase in the number of fatal opioid overdoses occurring in Virginia over the past five years, the Virginia General Assembly approved 15 bills aimed at addressing the epidemic. Almost all of these bills were approved unanimously, and additional budget language was included in the state budget bill.

Governor McAuliffe proposed legislation prohibiting physicians from writing a prescription for more than a three-day supply of an opioid medication. Seven bills were introduced by Delegate Todd Pillion (R), a pediatric dentist from southwest Virginia, and Delegate John O’Bannon (R), a physician, to address the opioid crisis. In addition, eight bills were introduced by Senator Siobhan Dunnavant (R), a physician, and Senator Ben Chafin (R) of southwest Virginia. All of these bills became part of a compromise legislative package supported by the Virginia Governor, the legislature, and stakeholder groups, including the Medical Society of Virginia, the Virginia Health Care Association and the Virginia Association for Hospices and Palliative Care. 

The compromise package of legislation included:

• Requiring any physician writing an opioid prescription for a patient for the first time to look back at the past seven days of the patient’s history within the Prescription Monitoring Program (PMP) to identify any potential opioid abuse and to look back 14 days if the opioid prescription is written postoperatively.
• Establishment of a workgroup, to include the Medical Society, the Virginia Hospital and Healthcare Association, the Virginia Association of Health Plans, and the Virginia Dental Association, to make recommendations related to e-prescribing requirements for opioids. The workgroup is to examine the hardships prescribers might experience if required to use e-prescribing for opioids. E-prescribing of opioids will be required by July 2020.
• Legislation directing the Board of Medicine and Board of Dentistry to establish regulations related to the prescription of opioids.
  • The Board of Medicine had already approved emergency regulations, which became effective on March 15, 2017. The Board of Medicine will begin the process of adopting final regulations to replace the emergency regulations this spring.
  • The regulations, available at http://www.dhp.virginia.gov/medicine/, require:
    • The prescribing and administration of buprenorphine in formulation and dosages approved by the Federal Drug Administration.
    • Urine screens every six months for patients taking opioids for chronic pain for more than a year.
    • Limiting the administration of buprenorphine without naloxone to only federally licensed opioid treatment programs. Buprenorphine without naloxone can no longer be dispensed for use offsite of the program.
  • Legislation will permit pharmacists to dispense naloxone in the absence of a physician’s prescription. This legislation codifies the standing order issued by Dr. Marissa Levine, the State Health Commissioner, authorizing the dispensing of naloxone for overdose reversal.

A Spotlight on Virginia’s Medicaid Program

The consequences of a Joint Legislative Audit Review Commission (JLARC) study

Responding to a study of Virginia’s Medicaid program completed by the Joint Legislative Audit Review Committee (JLARC), language was included in the state budget providing the legislature with more oversight of the state Medicaid agency. The budget language also gives the legislature authority to dictate some terms for contracts between the Department of Medical Assistance Services (DMAS) and managed care organizations (MCOs) to administer the Medicaid program. DMAS previously had sole responsibility for negotiating the contracts with the MCOs. The legislature will require MCOs to return  (i) one-half of any profit over 3% and up to 10% from Medicaid premium income, and (ii) 100% of any underwriting profit over 10%. DMAS will also be required to provide the legislature with a detailed report of spending and utilization trends within Medicaid managed care and an analysis of the underlying reasons for these trends. The General Assembly also directed DMAS to develop a web-based interface for the public to easily access agency data.

Virginia Prepares to Respond to Changes to the Affordable Care Act

Establishment of the Joint Subcommittee for Health and Human Resources Oversight

In anticipation of changes to the Affordable Care Act (ACA) and other health care laws by the federal government that impact states, the Virginia General Assembly included language in the state budget for the creation of a joint subcommittee, the Joint Subcommittee for Health and Human Resources Oversight (Joint Subcommittee). The Joint Committee is to be comprised of members of the House Appropriations and Senate Finance Committees and staff for the Joint Legislative Audit Review Commission and will be responsible for oversight of the Medicaid program and the Children’s Health Insurance Program (CHIP), should the federal government suggest changes to those programs. The language also provides the Joint Subcommittee with oversight authority of all agencies under the Virginia Secretary of Health and Human Resources, thus giving the legislature the ability to ask health and human resource agencies for information and analysis previously provided only to the Virginia Governor.