Feb 27, 2017
Washington Healthcare Update
This Week: The House and Senate were in recess for President’s Day.
4. State Activities
5. Regulations Open for Comment
House Draft ACA Replacement Bill Leaked
On Friday, Feb. 24, a
draft House Republican repeal bill was leaked. The bill would remove the foundations of the
ACA, the individual mandate, subsidies based on people’s income, and all of
the law’s taxes. It would significantly roll back Medicaid spending and
give states money to create high risk pools for some people with
pre-existing conditions. Some elements would be effective right away,
others not until 2020.
The replacement would be paid for by limiting tax breaks on generous health
plans people get at work—an idea that is similar to the Obamacare “Cadillac
tax” that Republicans have fought to repeal.
In place of the Obamacare subsidies, the House bill starting in 2020 would
give tax credits based on age instead of income. For a person under age 30,
the credit would be $2,000. That amount would double for beneficiaries over
the age of 60, according to the proposal. A related document notes that HHS
Secretary Tom Price wants the subsidies to be slightly less generous for
most age groups.
The Republican plan would also eliminate Obamacare’s Medicaid expansion in
2020. States could still cover those people if they chose but they’d get a
lot less federal money to do so. And instead of the current open-ended
federal entitlement, states would get capped payments based on the number
of Medicaid enrollees.
The proposal includes $100 billion in “state innovation grants” to help
subsidize extremely expensive enrollees. That aims to address at least a
portion of the “pre-existing condition” population, though without the same
broad protections as in the Affordable Care Act.
According to the document, there’s only one single revenue generator to pay
for the new tax credits and grants. Republicans are proposing to cap the
tax exemption for employer sponsored insurance at the 90th percentile of
current premiums. That means benefits above that level would be taxed.
The proposal also includes penalties for individuals who fail to maintain
coverage continuously. If their coverage lapses and they decide to
re-enroll, they would have to pay a 30 percent boost in premiums for a
year. Like the unpopular individual mandate, that penalty is designed to
discourage individuals from waiting until they get sick to get coverage.
The exact details of any legislation will also be shaped by findings from
the CBO about how much it will cost and what it will do to the federal
House Panel to Markup Medical Malpractice Legislation
The House Judiciary Committee is set to take up
on Feb. 28 imposing broad limits on medical malpractice lawsuits.
The bill, which is scheduled for
full committee markup
on Feb. 28, proposes tightening the statute of limitations for malpractice
suits, capping certain damage awards and restricting attorneys’ fees. The
legislation also shields providers from prescription drug lawsuits
involving FDA-approved drugs.
Health care companies have long urged for a sweeping overhaul of the
medical malpractice system, arguing that it now encourages attorneys to sue
in hopes of big paydays. But trial attorney groups counter that tightening
the rules around malpractice suits would prevent injured patients from
being adequately compensated for a provider’s negligence.
The bill in front of the Judiciary Committee would require patients to file
suit within three years of an injury and cap noneconomic damages such as
pain and suffering awards at $250,000. Attorneys would only be able to
collect up to a fixed percentage of a plaintiff’s total award.
House Begins User Fee Hearings This Week
The House Energy and Commerce health subcommittee will hold its first
hearing on reauthorization of the FDA user fee programs this week.
March 2 hearing
will focus on the generic drug and biosimilar user fees programs. About
half of the FDA’s annual budget is funded by fees paid by drug and device
makers, and those industry agreements must be reauthorized by Sept. 30.
At the hearing, the committee will also consider a drug pricing bill,
H.R. 749, meant to encourage drug companies to develop generic medicines amid
shortages or absence of competition. The bill is targeted at high-priced
older drugs that have lost patent protection.
The committee earlier this month postponed a markup on the bill because
Democrats wanted it thoroughly vetted in subcommittee instead of fast
tracked for a vote.
Republicans Postpone Obamacare Subsidies Lawsuit
The Trump administration and House Republicans have put a pause on the
legal dispute over the constitutionality of billions of dollars in
Obamacare subsidies to consider what to do now with the court case started
by House Republicans against the Obama administration.
The two sides said they need another three months to come to a resolution,
according to a Feb. 21 appellate court filing. The subsidies were subject
to a court battle between House Republicans and the Obama administration.
The House argued that the payments to insurers were illegal because
Congress never appropriated the money. The payments reduce the deductibles
and copays for more than half of enrollees on the Obamacare exchanges.
A district court judge last year ruled in favor of the House, finding the
subsidies were illegal and must stop. However, she stayed her decision, and
the Obama administration filed an appeal.
Now that the White House has changed hands, House GOP lawmakers are in the
uncomfortable situation of suing Health Secretary Tom Price, who took over
after Burwell and is one of their own.
The agreement delays any further proceedings until at least May 22, with
the requirement that HHS and House Republicans file status reports every 90
days on whether to continue the pause.
Congressional Republicans have recently indicated they are leaning toward
temporarily funding the subsidies if the White House decides against a
legal challenge, for fear of destabilizing the health care system before
they can repeal and replace Obamacare.
Sens. Booker and Casey Seek to Revive Drug Importation Bill
Democratic Sens. Cory Booker (NJ) and Bob Casey (PA) are circulating a
importation draft bil authored by Sen. Bernie
Sanders (I-VT) in a search for more cosponsors before they introduce the
measure on Feb. 28. The senators had previously been reluctant to support
drug importation as a way to address the high cost of prescription
medicines but are now joining with Sanders in a bid to revive the idea.
Booker and Casey’s involvement could be critical in advancing the
legislation. Both lawmakers voted against a drug importation amendment that
Sanders and Sen. Amy Klobuchar (D-MN) offered during the Senate budget
debate in January. They were among 13 Democrats who opposed the measure
while 12 Republicans voted yes—the amendment failed 46-52. President Donald
Trump has also endorsed importing drugs from countries where they often
sell for less than in the United States.
Booker and Casey’s latest proposal more thoroughly addresses safety
concerns surrounding importation, an issue that kept them from supporting
the previous Sanders amendment.
For more information on the bill, click
Senator Murkowski Won’t Vote To Repeal Medicaid Expansion
Alaska Sen. Lisa Murkowski (R-Alaska)—a key swing vote on repealing
Obamacare—says she won’t vote to strike the law’s expansion of Medicaid or
support legislation to pull funding for Planned Parenthood as part of
efforts to repeal the law. Speaking about Medicaid to the Alaska
Legislature on Feb. 22, Murkowski said, “So as long as this Legislature
wants to keep the expansion, Alaska should have that option, so I will not
vote to repeal it.” Medicaid expansion in Alaska, which was adopted by Gov.
Bill Walker in 2015 via executive order, covers nearly 30,000 people in the
very rural, high-cost state.
On Planned Parenthood, Murkowski said she does not believe the organization
should be part of Congress’ deliberations on the Affordable Care Act. “I
will not vote to deny Alaskans access to the health services that Planned
Parenthood provides,” she said.
Senate Republicans can handle only a few defections on repeal, and a
growing group of Republican senators whose states took up the Obamacare
Medicaid expansion are expressing concern about its elimination.
President Trump Orders Agencies to Identify Rules for Elimination
On Feb. 24, President Donald Trump ordered federal agencies to begin
identifying rules for elimination—a move he presented as part of his larger
assault on regulations he said damage the economy. The executive order he
signed in the Oval Office directs each federal agency to set up a
“regulatory reform task force” to review an agency’s existing regulations
and search for rules to repeal or modify. The task forces in particular
will be directed to “focus on eliminating costly and unnecessary
regulations,” according to a White House official.
The orders come on top of one of the Trump administration’s first acts upon
his inauguration issuing a blanket freeze on regulatory actions across the
government, similar to the stoppage imposed when Barack Obama first took
White House Releasing Budget Outline in Mid-March
The Trump administration plans to release its fiscal 2018 budget outline by
the second week of March, offering the first detailed look at priorities
for the president’s first year. White House spokesman Sean Spicer confirmed
Feb. 22 that the administration aims to release its budget around March 13.
Congressional budget writers were also told to expect President Donald
Trump’s outline in that timeframe.
The plan—the “skinny budget”—is the first draft of Trump’s full budget
proposal, which is expected later this spring. In broad strokes, it will
likely lay out where Trump plans to increase spending, and which programs
he will roll back.
CMS Extends Deadline for 2016 Physician Quality Reporting System (PQRS) Electronic Health Record (EHR) Submission
CMS is extending the submission deadline for 2016 Quality Reporting
Document Architecture (QRDA) data submission for the EHR reporting
mechanism of the Physician Quality Reporting System (PQRS) program.
Individual eligible professionals (EPs), PQRS group practices, qualified
clinical data registries (QCDRs) and qualified EHR data submission vendors
(DSVs) now have until Friday, March 31, 2017, to submit 2016 EHR data via
QRDA. The deadline is extended to March 31, 2017, for EPs to electronically
report electronic Clinical Quality Measures (eCQMs) for the Medicare EHR
For more information,
CMS to Hold Q&A Session on March 8
On Wednesday, March 8, 2017, from 1:00 p.m. to 2:00 p.m. (EST), CMS will be
hosting a live question and answer (Q&A) session. The session will open
with a brief presentation, then the Open Payments team will be available to
respond to questions.
To be able to ask a question or view the presentation, participants must go
online and register at least 15 minutes prior to when the webinar begins.
Participants will still have the ability to call in and listen only.
To register for the session,
click here. After registration, participants will receive an email with instructions
on how to join the call and ask a question.
To listen only, call 1-844-396-8222 and enter the meeting number (903 123
962) when prompted.
Judge Blocks Texas From Cutting Planned Parenthood Medicaid Funding
On Feb. 21, a federal judge issued an injunction blocking Texas from
cutting Medicaid funding for Planned Parenthood. The state tried to cut
funding last month but U.S. District Judge Sam Sparks delayed the cuts
until he issued a decision. In his ruling, Sparks said the state “likely
acted to disenroll qualified health care providers from Medicaid without
cause.” He added, “such action would deprive Medicaid patients of their
statutory right to obtain health care from their chosen qualified
Texas, along with a handful of other Republican-controlled states, has
tried to cut Planned Parenthood’s funding since anti-abortion activists
released undercover videos in 2015 allegedly showing officials from the
organization negotiating prices for fetal tissue. Investigations into the
videos concluded with no criminal charges.
To see the ruling,
4. State Activities
Florida: “Eyeball Wars” Restart After Optometry Bill Filed
Florida’s “eyeball wars” have flared up again after a state senator filed a
bill that would expand the scope of practice for Florida optometrists,
giving them the go-ahead to cut, inject, freeze, suture, vaporize or photo
disrupt eye tissue. Filed by Senate Appropriations Chairman state Sen. Jack
Latvala, SB 1168 would
also give optometrists the ability to work on eyelids, eyebrows, the lining
of the eyelids and the lacrimal apparatus, or the organs responsible for
the production and drainage of tears. The Florida Optometric Association
has hired a team of well-connected lobbyists, including Michael Corcoran
and Bill Rubin. Former Senate President Don Gaetz coined the phrase eyeball
wars to describe the multi-year effort by the optometrists to expand their
scope of practice to include administering and prescribing controlled
substances for the treatment of glaucoma. Ophthalmologists opposed the
Kansas: Kansas House Endorses Medicaid Expansion
On Feb. 22, the Kansas House of Representatives overwhelmingly endorsed
Obamacare’s Medicaid expansion, providing an unexpectedly strong sign of
support for the program in the deep red state.
State lawmakers in the lower chamber voted 85-40 on an
that would expand coverage to low-income adults earning up to 133 percent
of the federal poverty level. The vote was to add the Medicaid expansion
amendment to a separate piece of legislation, which has not yet been
approved by the Senate.
The Kansas House approved the amendment just days after a separate bill
expanding Medicaid was tabled in committee, leading observers to believe it
would not pass during the current legislative session. It is unclear
whether the underlying bill will make it through the Kansas state Senate,
which also has a GOP majority. Gov. Sam Brownback strongly opposes Medicaid
Oregon: Oregon Medicaid Enrollment Down
Oregon’s Medicaid population has dropped, and it is unclear why. Data from
the Oregon Health Authority shows January enrollment at 956,790, an 11
percent drop from 10 months earlier, when enrollment in March stood at
1,076,833. Enrollment in Oregon’s state-run coordinated care organizations,
or CCOs, dropped by 133,322 in that same period. An improved economy,
operational challenges and public apathy may be culprits.
To see the data,
Texas: Lawmaker Pushing Legislation for Gun Ban in Psychiatric Hospitals
A Texas lawmaker is pushing legislation that would reinstate a ban on guns
in state-run psychiatric hospitals. Firearms were previously prohibited in
the state-run institutions until a law passed in 2015 lifted the ban. The
law created penalties for local government facilities that posted “no gun”
signs on public buildings without authorization to do so, forcing the
state-run hospitals to lift their restrictions. Republican state Rep.
Andrew Murr is the sponsor of the bill to reinstate the ban, House Bill 14.
5. Regulations Open for Comment
CMS Proposes Rule for Prosthetics and Orthotics Suppliers
On Jan. 11, CMS issued a proposed rule that would implement statutory
requirements and specify: the qualifications needed for practitioners to
furnish and fabricate prosthetics and custom-fabricated orthotics, and for
qualified suppliers to fabricate prosthetics and custom-fabricated
orthotics; accreditation requirements that qualified suppliers must meet in
order to bill for prosthetics and custom‑fabricated orthotics; requirements
that an organization must meet in order to accredit qualified suppliers to
bill for prosthetics and custom-fabricated orthotics; and a timeframe by
which qualified practitioners and qualified suppliers must meet the
applicable licensure, certification and accreditation requirements. This
rule would also remove the exemption from quality standards and
accreditation that is currently in place in accordance with Section
1834(a)(20) of the Act for certain practitioners and suppliers who furnish
or fabricate prosthetics and custom‑fabricated orthotics. In addition, this
rule also includes authority for the Centers for Medicare & Medicaid
Services (CMS) to revoke the Medicare enrollment of Durable Medical
Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) suppliers that submit claims for items that do
not meet the requirements of the statute and this proposed rule.
Only qualified practitioners who furnish or fabricate prosthetics and
custom‑fabricated orthotics and qualified suppliers that fabricate or bill
for prosthetics and custom‑fabricated orthotics would be subject to these
CMS will accept comments on the proposed rule until March 13, 2017, and
will respond to comments in a final rule.
To see the proposed rule,
FDA Releases Draft Guidance for Interchangeable Biosimilars
On Jan. 17, FDA outlined the criteria companies must meet to get a copycat
biologic deemed interchangeable with its branded counterpart, a
certification that paves the way for the cheaper products to be
automatically substituted at the pharmacy level under state laws.
To get this designation, a biosimilar sponsor must show that its product
can be expected to produce the same clinical result as the branded biologic
in any given patient, for all of the drug’s approved uses, and that there
are no risks if a patient is switched back and forth between the
interchangeable biosimilar and the branded biologic,
per draft guidance
released by FDA.
Interchangeable biosimilars are expected to offer greater savings to the
health system than biosimilars that lack this designation. Without the
interchangeability designation a doctor must proactively write a
prescription for the biosimilar.
The guidance outlines the types of studies and scientific data that
companies will need to submit to FDA to get an interchangeable designation.
When companies seek that designation, FDA recommends they seek approval for
all of the branded biologic approved uses.
FDA is requesting comments on the draft guidance as well as a number of
questions outlined in a
Federal Register notice. FDA wants to know how it should regulate manufacturing changes of
interchangeable products that occur after approval. The agency also wants
to know how it should handle interchangeable designations if a branded
biologic gets another use approved for the drug, after the interchangeable
biosimilar is cleared by FDA.
FDA Releases Draft Guidance on Off-Label Drug Communication
On Jan. 17, FDA
issued draft guidance
that gives drug and device companies more flexibility to communicate
off-label information about their products and avoid charges of
misbranding. The new policy allows companies to promote a drug or device
with information not on the agency-approved label as long as that
information is truthful and non-misleading and is consistent with
Companies have asked FDA for clarity on marketing policies after a 2012
U.S. Court of Appeals decision ruled that under the First Amendment the
government could not prohibit and criminalize the truthful off-label
promotion of FDA-approved drugs.
The guidance outlines how FDA will determine whether a company's
communication is consistent with FDA's required labeling. For example,
companies will not be permitted to communicate information about the drug
or device related to a use that has not yet been approved by FDA. They also
can't promote a patient population for the drug or device that has not been
cleared by the agency.
The agency offers some examples of information companies could communicate
that could be consistent with its FDA-required labels. For example, FDA
said companies can promote testimony of patients who used the drug for its
FDA-approved uses, such as the product's effect on patients' daily
activities. Companies could also communicate long-term safety and efficacy
information about products that were approved for chronic use based on a
six-month trial, if the company now has data on the drug lasting a couple
of years, FDA added.
The guidance also outlines the type of scientific data companies need to
support their off-label claims. Comments on the draft are due in 60 days.
CMS Proposes Average 0.25 Percent Hike for Medicare Advantage Plans
On Feb. 1, the Trump administration issued guidance that proposes updates
to the methodologies used to pay Medicare Advantage plans and Part D
sponsors. The guidance calls for raising Medicare Advantage payments an
average of 0.25 percent.
Health plans take in roughly $200 billion a year from the government to
provide care for seniors enrolled in private Medicare plans. There are
currently more than 18 million people enrolled in Medicare Advantage,
accounting for roughly a third of all of the program's beneficiaries. More
than 1 million seniors have been added to private Medicare plans in the
past year, continuing a trend of robust growth that goes back a decade.
"These proposals will continue to keep Medicare Advantage strong and stable
and provide high quality, affordable care to seniors and people living with
disabilities," said Patrick Conway, acting administrator of the Centers for
Medicare and Medicaid Services.
Obamacare included major cuts to Medicare Advantage—America's Health
Insurance Plans puts the total figure at $200 billion—that were designed to
bring payments more in line with traditional government-run Medicare. Last
year, the federal government paid private plans an average of 102 percent
of traditional fee-for-service costs per member.
UnitedHealth Group and Humana are the biggest national players, accounting
for roughly 40 percent of the Medicare Advantage market in 2015.
CMS will accept comments until March 3 and the final notice will be posted
on April 3.
To read a fact sheet on the rate proposal,
If you have any questions, contact the following individuals at
Kennan, Senior Vice President
Charlie Iovino, Vice
Caroline Perrin, Research Assistant
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