Mar 27, 2017
Washington Healthcare Update
- This Week: Health Reform gets to the floor of the House for consideration, but crashes.
4. State Activities
5. Regulations Open for Comment
American Health Care Act Withdrawn Before Vote
After seven years of Republicans’ running against the Affordable Care Act,
the American Health Care Act was pulled just before it was to be voted on
in the House of Representatives. Pulling the bill on Friday, March 24, came
after postponing a vote scheduled the day before. Within the Republican
Party, a tug of war among the conservatives and moderates made it
impossible to create a bill that would have the necessary votes to pass.
The most recent Congressional Budget Office (CBO) forecast 24 million
people would be uninsured within a decade. Polls showed that only 17
percent of Americans supported the bill.
Even if it was passed by the House, the Senate did not have the votes to
pass the House bill.
Medicaid was a large stumbling block. However, changes made to appeal to
the Freedom Caucus also lost the bill support among moderates.
It is unclear when the House will return to working on health reform. It
has been suggested that Health and Human Services Secretary Price can make
changes through the regulatory process.
House Energy & Commerce Committee Examines FDA’s Prescription Drug User Fee Program
House Energy & Commerce hearing
on March 22, members of Congress, FDA officials and industry stakeholders
all praised the success of FDA’s breakthrough designation in lowering drug
development times, and stressed that the pending Prescription Drug User Fee
Agreement (PDUFA) will bring important resources to the effort.
However, FDA drug center director Janet Woodcock also cautioned the program
can be expanded only so far.
FDA’s breakthrough designation was created by the Food and Drug
Administration Safety and Innovation Act (FDASIA) and allows for expedited
development and review of drugs intended to treat a serious or
life-threatening disease, and which preliminary clinical research indicates
may demonstrate substantial improvement over existing therapies on one or
more clinically significant endpoints.
Lawmakers were quick to praise the commitment to supporting the
breakthrough designation included in the pending drug user fee agreement.
“I am pleased that PDUFA VI will continue to build upon the success of the
breakthrough therapy program,” E&C health subcommittee Chairman Michael
Burgess (R-TX) said in his opening statement.
Senate Democrats Deliver Guarantee to Block Repeal of Essential Benefits
Senate Democrats say they have enough votes to block any Republican attempt
to repeal Obamacare’s essential benefits and consumer protections through
Forty-two Democrats signaled the warning to House Republicans that they
should not expect Democrats to cave on future repeal bills the GOP may
include in its “third phase” of repeal.
to House Speaker Paul Ryan, they warn: “Any assurances to your colleagues
that future legislation to further scale back insurance coverage will pass
through regular order if the AHCA is enacted are based on the flawed
assumption that the Senate Democratic Caucus will vote to further erode the
health care system and strip our constituents of coverage.”
Republicans are trying to strip out essential benefits in the repeal
legislation in an attempt to win over the House Freedom Caucus. But it is
unclear whether that move would pass muster under Senate rules.
In the letter, led by Sen. Jeanne Shaheen (D-NH), Democrats promised to
block legislation to repeal the essential benefits, as well as preventive
care provisions. The letter targets what Republicans have called phase
three of their repeal plan: passing legislation through regular order that
would need to pick up eight Democratic votes in the Senate. It came just
hours before the House’s scheduled vote on repealing major parts of the
“Given your plans to pass subsequent legislation through regular order in
Congress, we want to correct any misimpression you may have that we will
support proposals you have cited as key to your effort,” the letter says.
Senate Minority Leader Chuck Schumer, who did not sign the letter, has
pushed back strongly against repealing any major part of Obamacare and
would surely join Democrats in opposition.
Three of the Senate’s most moderate Democrats did not sign on: Sens. Heidi
Heitkamp of North Dakota, Joe Donnelly of Indiana and Joe Manchin of West
Senators Reintroduce Legislation to Make More Hearing Aids Available Over the Counter
On March 21, Sens. Chuck Grassley (R-IA), Elizabeth Warren (D-MA), Maggie
Hassan (D-NH) and Johnny Isakson (R-GA)
to make certain hearing aids available over the counter (OTC), following
calls from the Obama White House and the National Academics of Sciences,
Engineering and Medicine. FDA has also indicated it is considering the idea
of an OTC hearing aid, and recently loosened restrictions on dispensing
The bill would make certain air-conduction hearing aids available over the
counter for patients 18 years and older to treat mild to moderate hearing
impairment. The bill would also direct HHS to circulate regulations within
three years to establish such a category and codify requirements to
“provide reasonable assurances of safety and efficacy.” It would also task
HHS with determining whether over-the-counter hearing aids would require
FDA issued guidance on Dec. 7 waiving the recordkeeping and medical
evaluation requirements for the dispensing of class I and II air-conduction
hearing aids for patients older than 18. FDA also said it would consider
making hearing aids available over the counter.
was introduced in the House by Reps. Joe Kennedy III (D-MA) and Marsha
Sen. Wyden Asks HHS to Ensure CMS Administrator Verma Complies With Ethics Agreement
Senate Finance ranking Democrat Ron Wyden (OR) is
about how HHS will make sure that CMS Administrator Seema Verma is in
compliance with her ethics agreements not to directly work on matters
relating to seven states with which she has previously done consulting
related to Medicaid.
HHS Secretary Tom Price and Verma
wrote to governors
March 14 that Medicaid expansion is “a clear departure from the core,
historical mission” of the program, and began overtures to states to rework
Medicaid. They said tax dollars should go to the most vulnerable; urged
states to shift to private insurance models and use 1115 waivers to
incentivize employment for Medicaid-eligible, poor adults; and said HHS
will review all managed care regulations and put off enforcing the 2014
home- and community-based services rule.
“In light of her announced intentions to begin discussions with states
regarding changes to the Medicaid programs they carry out, I am writing
today to obtain a description of the procedures and safeguards that the
Department intends to put in place to ensure that her prior associations
with a number of states are properly reviewed and in full compliance with
her ethics agreement and the Department’s and Federal ethics rules,” Wyden
Wyden asked the HHS acting general counsel how Verma’s Medicaid work with
states will comply with her ethics obligations, as she worked with several
states through her consulting firm SVC, Inc. Wyden notes that Verma’s
ethics agreement says she “will seek a written authorization to participate
substantially in particular matters involving specific parties in which I
know the States of Arkansas, Indiana, Iowa, Kentucky, Ohio, South Carolina
and Virginia are a party or represents a party.”
OMB Memo Instructs Executive Branch Officials to Limit Testimony on Budget Blueprint
Two high-profile appropriations hearings were canceled March 20 following a
White House memo warning federal officials to limit congressional testimony
on the Trump administration’s FY 2018 budget blueprint.
The Office of Management and Budget (OMB) released
the memo stating that it is the administration’s “strong
preference that only heads of executive departments and agencies or the
acting head of the department or agency” should testify on the budget
“Until OMB releases the full FY 2018 Budget, all public comments of any
sort should be limited to the information contained in the Budget Blueprint
chapter for your agency,” states the memo, which was sent to all agencies.
Both canceled hearings were to be hosted by the House Appropriations
subcommittee on Labor, Health and Human Services, and Education. The first
panel, scheduled for March 21, would have included witnesses from the
National Institutes of Health, the National Cancer Institute and the
National Institute on Drug Abuse. The second cancelled hearing, which was
set for March 22, would have featured testimony from Education Secretary
HHS Updates Website to Explain ACA Regulatory Overhaul
HHS recently updated its website to explain the regulatory changes it is
making to overhaul the Affordable Care Act (ACA) and stabilize the
marketplace. The agency announced it is working through all of the ACA’s
regulations and guidance to determine their success. HHS’s page “Providing Relief Right Now for Patients” lays out concerns with rising premiums and limited coverage choices.
“The Department of Health and Human Services (HHS) is committed to doing
everything in our power to provide relief immediately. Within what the law
allows, HHS is taking action to stabilize the individual and small group
insurance markets (the markets most affected by the ACA) so that they work
better for everyone,” the new page says.
HHS Delays CMMI’s Bundled Payment Programs Again
HHS is further delaying two Medicare bundled payment programs from the CMS
Innovation Center, according to a
Federal Register notice
published March 20. The notice postpones an expansion of its bundled
payment program for knee and hip replacements and the start of a stroke and
heart attack care program from March 21 until May 20.
The additional time allows new HHS leadership to review the two bundled
payments and seek comment about possibly delaying the start of the cardiac
care and expansion of the joint replacement bundles all the way until Jan.
The Trump administration had already delayed the start date for the two
from Jan. 21 when it ordered a 60-day regulatory freeze after Trump took
office. While in Congress, now-HHS Secretary Tom Price was highly critical
of mandatory demonstration projects like CMMI’s bundled payments for hip
and knee replacements.
MGMA Urges CMS to Release MIPS Eligibility Notifications
CMS is aiming to get doctors information on whether they meet the volume
thresholds for participating in the Merit-based Incentive Payment System
(MIPS) this spring, and the Medical Group Management Association says the
lack of eligibility notifications is “generating considerable frustration
and confusion.” The American Medical Association has also talked with CMS
about the problem and was told the notifications would come out sooner
rather than later.
“Transitioning to MIPS is a challenge involving upgrades to electronic
health record software, re-engineering clinical workflows to meet data
capture and reporting requirements, contracting with data registries, and
training clinical and administrative staff,” MGMA says in a
March 15 letter to CMS. “Without basic information about eligibility, physicians and medical
groups are significantly disadvantaged from positioning themselves for
success in the program.”
The Medicare Access and CHIP Reauthorization Act set up MIPS as one of two
tracks in the new Medicare physician payment system, and physicians who
bill Medicare Part B more than $30,000 annually and provide care for more
than 100 Medicare patients a year participate in one of the two tracks.
The first performance period for MIPS opened Jan. 1, and physicians will
see their pay adjusted in 2019 based on their 2017 performance. Those who
do not report 2017 data get a 4 percent cut to their Medicare pay, those
who submit a minimum amount of 2017 data—such as data on one qualified
measure or one improvement activity—avoid a cut and those who submit at
least 90 days of data are eligible for a bonus.
CMS previously said it would provide notifications by December to those who
are exempt from MIPS because of the low-volume threshold exemption, but the
agency has yet to do so. MGMA notes that CMS had estimated that 32.5
percent of Medicare providers are exempt from MIPS in 2017 under the
low-volume threshold, and “as such, at least 32.5 percent of Medicare
providers are currently unsure whether they qualify for participation in
MGMA says CMS has yet to release a final list of approved 2017 clinical
data registries or an approved list of registry vendors, as well, and that
is “further hindering group practices’ success in MIPS.”
Supreme Court Sets Limits on Acting Officials
On March 21, the Supreme Court ruled 6-2 that certain acting officials in
jobs requiring Senate confirmation cannot continue to serve in that role
once they have been nominated to the post, a decision that will prevent
President Donald Trump from temporarily filling such jobs with his first
picks while nominations work their way through the Senate.
“Even if a first assistant is serving as an acting officer under this
statutory mandate, he must cease that service if the President nominates
him to fill the vacant [Senate-confirmed] office,” the court concluded in a
case involving the Federal Vacancies Reform Act of 1998.
The law includes a narrow exception for “first assistants” who had served
for at least 90 days, although the changeover of political appointees
during the transition means fewer of these such deputies are now serving in
acting posts. The Supreme Court said that prohibition also extends to any
non-deputy officials specifically directed by the president to serve in
It appears unlikely the ruling will affect many actions taken by acting
officials under the Obama administration, since a lower court said any such
challenges would have had to have raised the vacancy issue already. Still,
the Obama administration previously had pointed to uncertainties about
acting EPA deputy administrator Stan Meiburg and acting officials at other
4. State Activities
California: Huge Cost-Shift Could Occur for Medi-Cal Under GOP Plan
The current GOP health proposal would have required California to come up
with nearly $6 billion to pay for Medi-Cal—the state’s Medicaid
program—in 2020 and as much as $24.3 billion by 2027, according to a
released by state officials March 22.
Of that amount, California’s general fund, which covers about 70 percent of
Medi-Cal costs, was estimated to grow from $4.3 billion in 2020 to $18.6
billion over the next decade, due in part to an increase in California
residents covered under the program.
Reduced federal contributions and other administrative changes would cost
the state $4.8 billion by 2020, and as much as $18.5 billion within the
next decade. California’s cost trends are also expected to exceed the
expenditures allowed under the Republicans’ per-capita spending limit,
increasing state costs from $680 million in 2020 to $5.3 billion by 2027.
Medi-Cal is projected to cover 14.3 million Californians next year, or one
in three residents. The analysis, which was conducted by the Department of
Health Care Services with the Department of Finance, was sent to the
state’s congressional membership.
Florida: Gov. Scott Plans to Ask Federal Government for a Medicaid Block Grant
Florida Gov. Rick Scott announced plans to ask the federal government to
give Florida a Medicaid block grant. The Agency for Health Care
Administration sent a letter to HHS Secretary Tom Price saying Florida
intends on amending a Medicaid 1115 waiver request that is pending approval
to include a request for a Medicaid block grant. The letter outlined the
five changes Florida would like to make to its Medicaid program under a
block grant, including eliminating a requirement that the state
retroactively cover health care costs for newly eligible beneficiaries and
eliminating a requirement that the federal government review the rates the
state pays HMOs to make sure they are actuarially sound. Florida has a $26
billion Medicaid program and requires most of its enrollees to enroll in a
managed care plan.
Kansas: Kansas State Senate Approves Bill for Obamacare Medicaid Expansion
On March 23, a committee in the Kansas State Senate cleared a bill that
would expand the state’s Medicaid program under Obamacare, a rebuke to
Congress as Republicans try to unwind the health law.
The Kansas Senate Public Health and Welfare Committee advanced legislation
on a voice vote, sending it to the full GOP-controlled chamber for
consideration. Legislation cleared the Kansas House in February, a
surprising endorsement of the Obamacare program from a deep red state.
Kansas is one of 19 states that have not accepted the Medicaid expansion.
But it is unclear whether Republican Gov. Sam Brownback would sign the bill
given that he has been vehemently opposed to Obamacare for years.
The American Health Care Act seeks to phase out Obamacare’s Medicaid
expansion funding beginning in 2020. But one of the changes included in an
amendment to the bill is designed to make sure additional states would not
expand their Medicaid program between now and then. The change only allows
states to maintain the federal funding boost under Obamacare if they had
already expanded by March.
5. Regulations Open for Comment
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,
CMS Announces RFI for Input on Improving Pediatric Care
CMS announced Feb. 27 a Request for Information (RFI) seeking input on
approaches to improve pediatric care, specifically to improve the quality
and reduce the cost of care for children and youth enrolled in Medicaid and
the Children’s Health Insurance Program (CHIP). CMS is also exploring
concepts that encourage pediatric providers to collaborate with
health-related social service providers at the state, tribal and local
levels and share accountability for health outcomes for children and youth
enrolled in Medicaid and CHIP.
CMS is asking stakeholders to submit comments via email to
by 11:59 p.m. on March 28, 2017.
For more information about the RFI, visit the
CMS Innovation Center website.
FDA Considers Establishing New Office of Patient Affairs
The FDA is considering establishing a new Office of Patient Affairs that
would centralize its work on patient involvement in the review and approval
of drugs and medical devices, according to a
March 14 notice
in the Federal Register.
Comments on the new office are due by June 12, 2017.
FDA Proposes 1,000 Medical Devices to Exempt From Premarket
On March 14, FDA took one of its first actions to begin implementing the
21st Century Cures Act, by
more than 1,000 medical devices it will exempt or partially exempt from the
premarket review process. The devices on the list are sufficiently well
understood and do not present risks that require premarket notification to
provide a reasonable assurance of safety and effectiveness, FDA said. The
agency will finalize the list after a 60-day public comment period.
Comments are due by May 15, 2017.
FDA Extends Comment Period on Biosimilar Interchangeability Guidance
FDA is extending the public comment period for its
outlining how biosimilar sponsors can demonstrate that their products are
interchangeable with other biologics, following extension requests from top
The agency laid out in a January 2017 draft guidance its first attempt at
codifying the requirements that sponsors must satisfy to demonstrate
interchangeability. The agency said it would make case-by-case
determinations of interchangeability, but indicated it would require
studies measuring the impact of switching on clinical pharmacokinetics and
The Biotechnology Innovation Organization (BIO), Pharmaceutical Research
and Manufacturers of America and Covington & Burling all requested
comment period extensions, according to documents posted on
The comment period, which was set to close on March 20, will be extended 60
days until May 19.
GAO Testimony Shows VHA Struggles to Recruit and Retain Staff
On March 22, GAO released testimony regarding the Veterans Health
Administration’s challenges with recruiting and retaining staff.
Specifically, GAO found that the VHA is having difficulty recruiting and
retaining both clinical and administrative staff. There is high attrition
among HR staff at the VHA, along with weak internal control processes,
which are contributing to staffing issues. These challenges are making it
more difficult for VHA to meet the health care needs of the nation’s
veterans, according to GAO.
GAO recommended that VHA improve oversight of nurse recruitment and
retention initiatives, and strengthen its HR capacity.
To see the report,
If you have any questions, contact the following individuals at
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Charlie Iovino, Vice
Caroline Perrin, Research Assistant
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