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Oct 2, 2017

Washington Healthcare Update

This Week: Repeal and Replace Dies Again… Moving on to CHIP and Extenders… 340B Tweaks Delayed Again

1. Congress



2. Administration

3. Reports

1. Congress


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 in-home care.

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.

CHIP Update

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 for passage.

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 rule.

To read the letter, click here.

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 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, click here.

2. Administration

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, click here.

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.

3. Reports

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 practices.

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, click here.

If you have any questions, contact the following individuals at McGuireWoods Consulting:

Stephanie Kennan, Senior Vice President
Anne Starke, Research Associate

Founded in 1998, McGuireWoods Consulting LLC (MWC) is a full-service public affairs firm offering infrastructure and economic development, strategic communications & grassroots, and government relations services. McGuireWoods Consulting is a subsidiary of the McGuireWoods LLP law firm and has been named in The National Law Journal's special annual report, "The Influence 50," for the past several years. In the most recent report, McGuireWoods Consulting was ranked 15th of the 1,900 government relations firms in Washington, D.C.

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