Oct 2, 2017
Washington Healthcare Update
Repeal and Replace Dies Again… Moving on to CHIP and Extenders… 340B
Tweaks Delayed Again
House Passes FAA Extension, Adds Some Health Extenders
On Sept. 28, the House passed the FAA extension,
H.R.3823, with funding for two public health programs through the end of the year.
The new funding includes $97.5 million for teaching health centers and a
special diabetes program run by Indian Health Service through December. The
legislation also reauthorizes for three years a Medicare demonstration
project allowing certain patients with weakened immune systems to receive
Maternal, Infant, and Early Childhood Program Reauthorized
On Sept. 26, the Maternal, Infant, and Early Childhood Home Visiting
Program bill (
H.R.2824) passed the House for a five-year reauthorization. The bill helps new moms
care for their children with home-visit services. The bill includes a
requirement that states and territories match federal funding and prevent
Supplemental Security Income payments from going to people with outstanding
arrest warrants. Democrats opposed how this bill was funded.
Medicare Extenders Become Contentious
On Sept. 25, Democrats blocked the Ways and Means Committee attempt to
extend three health care programs. The blocked bill was a part of a
disaster relief bill on suspension. The three programs were for medical
education funding for health centers, reauthorization for the Special
Diabetes Program for Indians and extension of the Medicare Patient IVG
Access Demonstration. The programs were blocked in retaliation to
Republicans’ allowing only certain extenders to go through.
Following missing the Sept. 30 deadline, the House Energy and Commerce
Committee will mark up legislation to reauthorize the Children’s Health
Insurance Program (CHIP) on Oct. 4. In addition, the committee said that
they also will consider legislation for the Special Diabetes Programs,
National Health Service Corps and Teaching Health Center Graduate Medical
Education. The Senate bill,
S.1827, contains funding for five years. In this bill, the ACA’s 23 percent jump
in federal match rate will be preserved for the first two years and then
wind down. The bill also changes the health law’s requirement for states
maintaining CHIP eligibility levels. The Senate Finance Committee has not
scheduled a markup.
Senate Pivots Away From Graham-Cassidy for Now
On Sept. 28, Senate GOP leadership announced that they would not bring to
the floor repeal and replace legislation known as Graham-Cassidy after its
two primary authors, Sens. Bill Cassidy (R-LA) and Lindsey Graham (R-SC).
Graham said he would continue pushing for ACA repeal through regular order
and expressed confidence there would eventually be the necessary GOP votes
Sens. Rand Paul (R-KY), John McCain (R-AZ) and Susan Collins (R-ME) had
stated they would not vote for the legislation.
Cassidy also said he is sure that his bill will be the alternative to
Obamacare, and that the Medicare for All bill sponsored by Sen. Bernie
Sanders (I-VT) with 15 Democratic cosponsors would take away employer
coverage, Tri-Care and other private plans while pushing up taxes.
Graham-Cassidy was the subject of a five-hour contentious hearing in the
Senate Finance Committee on Sept. 25.
The demise of Graham-Cassidy has led Senate HELP Chairman Lamar Alexander
to renew his bipartisan effort with HELP Committee ranking member Sen.
Patty Murray (D-WA) to shore up Obamacare marketplaces if there was
consensus for a plan that would lower premiums and ensure available
coverage options in individual markets over the next two years. The two are
negotiating a limited package that would seek to help lower premiums and
make insurance available to the 18 million Americans in the individual
market in 2018 and 2019.
Hatch Asks CMS to NOT Finalize Medicare Home Health Rules
On Sept. 22, Senate Finance Committee Chair Orrin Hatch (R-UT) asked CMS to
not finalize changes to the Medicare home health agencies pay in 2018 and
2019 based on concerns the agency may be implementing complex policy issues
too quickly. On July 25, the home health pay rule proposed cuts of nearly
$1 billion from Medicare reimbursement. The letter to CMS Administrator
Seema Verma stated that reforms are typically budget neutral and CMS may be
going above regulatory authority.
The chairman stated, “Ultimately, behavioral assumptions can trigger
payment swings that produce sizable reimbursement reductions or windfalls
in the Medicare payment system. Because errors sometimes do occur in the
impact modeling phase, it is vital that CMS conduct a more comprehensive
impact analysis prior to the agency finalizing the HHGM proposal.” Further,
stakeholders are displeased with the lack of information from CMS about
behavioral estimates and need more information before commenting on the
To read the letter,
CHRONIC Care Act Passes the Senate
On Sept. 27, the Senate passed the CHRONIC Care Act (
S.870), which aims to improve how Medicare handles chronically ill patients and
adds a two-year extension to the Medicare Independence at Home model, which
pays medical staff to visit chronically ill patients at home. Further, the
act extends special-need plans for patients and permits private Medicare
plans to tailor benefit packages through “Value-Based Insurance Design.”
Legislation to Delay Health Insurance Tax Introduced
On Sept. 26, Sen. Corey Gardner (R-CO) introduced the Healthcare Tax Relief
Act to delay the health insurance tax the same day Republicans released the
tax reform framework, which does not touch on ACA taxes. Cosponsors of the
bill are Republican Sens. Jim Inhofe (OK), Tom Cotton (AR), Ron Johnson
(WI), Rob Portman (OH), Jeff Flake (AZ), Roy Blunt (MO), John Barrasso
(WY), Ted Cruz (TX), Dean Heller (NV) and Tim Scott (SC).
Reps. Kyrsten Sinema (D-AZ) and Kristi Noem (R-SD) introduced a health
insurance tax repeal bill,
H.R.246, and recently sent a letter requesting delay or repeal of the tax. The
health insurance tax accounts for 5 percent of premium hikes. Stakeholders
have argued that the tax does not make sense as it applies to managed care
products, insinuating the government is taxing itself.
Senate Democrats Demand Answers on Healthcare.gov Shutdown Periods
The demise of Graham-Cassidy has led Senate HELP Chairman Lamar Alexander
to consider reviving his bipartisan bid to shore up Obamacare marketplaces
if there was consensus for a plan that would lower premiums and ensure
available coverage options in individual markets over the next two years.
The senator stated, “I will consult with Senator [Patty] Murray and with
other senators, both Republicans and Democrats, to see if senators can find
consensus on a limited bipartisan plan that could be enacted into law to
help lower premiums and make insurance available to the 18 million
Americans in the individual market in 2018 and 2019."
Sens. Brian Schatz (D-HI), Elizabeth Warren (D-MA), Cory Booker (D-NJ) and
Chris Murphy (D-CT) have sent a letter to CMS Administrator Seema Verma and
HHS’s inspector general regarding the Obamacare sign-up site and why it
will be shut down for 12 hours on most Sundays and on the first night of
open enrollment. The senators ask the inspector general seven questions
including how the downtime was planned, how it compares to previous years
and why the downtime is necessary.
To read the letter,
CMS: Sole-State Carriers Must Pay RA Fee, Submit Data Starting in 2018
CMS has stated that carriers that are the only issuers in a state market
risk pool will partake in the new “High Cost Risk Pool” and be require to
pay a risk-adjustment user fee. The agency has established a new pool
mechanism to reimburse 60 percent of claims over $1 million as part of the
2018 Notice of Benefit and Payment Parameters. Up until now, sole carriers
haven’t been required to pay into the program. CMS stated, “Similarly,
issuers will be required to submit data to the EDGE server to qualify for
high-cost risk pool payments. The percent of premium charge for the
high-cost risk pool will be assessed even if issuers that are the only
issuer in a state market risk pool choose not to submit EDGE data. However,
because these issuers do not have transfers under the RA program against
other issuers in the state risk pool, additional data submission to the
EDGE server will be optional for these issuers.”
Labs to Seek Delay in Proposed Medicare Rates
In response to the pay rates that CMS proposed on Sept. 22, the American
Clinical Laboratory Association announced that clinical laboratories will
ask Congress to delay the rates as they’re far lower than market rates.
Medicare typically pays higher lab test bills than commercial payers and
the Protecting Access to Medicare Act directs CMS to base reimbursement on
commercial rates. Labs and lawmakers have spoken out on this issue to
include labs in the price data. Members of Congress on the Ways and Means
Committee and Energy and Commerce Committee have asked for hospital lab
data to be included.
Federal Exchange Issuers Get Safe Harbor for Renewal Notices
On Sept. 26, CMS stated they will offer an enforcement safe harbor for
issuers who fail to provide consumer renewal notices by Nov. 1, so long as
they provide information as soon as possible. This is in response to the
Aug. 10 notice that extended the time that issuers and states could submit
final rates to CMS. The agency stated, “Given the later deadline for filing
of 2018 rates, CMS believes it is appropriate to provide flexibility in the
deadline for issuance of renewal notices for non-grandfathered and
non-transitional coverage in the individual market beyond the deadline of
providing such notice before Nov. 1, 2017, which is the first day of the
individual market open enrollment period for the 2018 benefit year.” The
agency also encourages state exchanges to provide enforcement flexibility.
340B Program Changes Delayed
On Sept. 28, CMS released notice stating it is delaying a set of changes to
the 340B Drug Pricing Program, which requires drug makers to provide
discounts to safety net providers. This mean that changes to civil monetary
penalties and a new ceiling price will not take effect until July 1, 2018,
after originally being set to be finalized in March.
To view the notice,
CMS Will Not Update Hospital Quality Star Ratings in October
On Sept. 28, CMS announced it will not update its Hospital Quality Star
Ratings in October as the agency is reevaluating aspects of the contentious
methods and looks through stakeholder response. Comments were due to the
agency on Sept. 27 after hospitals had urged the administration to redo the
star ratings or remove them from Hospital Compare until they are correct.
As a part of the reevaluation, the agency is looking for information on how
measures are weighted, what measures are incorporated into the star ratings
and changes to the public reporting thresholds and minimum measures. The
American Hospital Association stated analyses of star ratings show “errors
in the execution of the chosen methodology.” The AHA has been advocating
for alternative methods for star ratings.
FDA Promotes Compounding
The FDA released a report on compounded drugs made at FDA-regulated
outsourcing facilities. This should help doctors know which compounded
products are made at plants that are required to follow good manufacturing
Outsourcing facilities were created by Congress in the 2013 Drug Quality
and Security Act, after a deadly meningitis outbreak due to compounded
medicines. The FDA oversight required these facilities to help ensure the
safety of medicines compounded in large quantities.
FDA Commissioner Scott Gottlieb restated his intention to get more
facilities to register with the FDA as compounders by focusing on reducing
regulatory burden. The agency also shared its “Outsourcing Facility
Information” guide that provides information about becoming an outstanding
facility and the resources available to such facilities.
To read the report,
If you have any questions, contact the following individuals at
Kennan, Senior Vice President
Anne Starke, Research Associate
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