Apr 24, 2017
Washington Healthcare Update
This Week: Repeal/replace sputters to life, maybe…Congress returns to fund the government…FDA nominee gets a vote.
4. State Activities
5. Regulations Open for Comment
GOP Renewing Efforts for Obamacare Repeal
House Republicans have outlined an amendment that could revive their
efforts to repeal Obamacare. The amendment aims at reuniting the GOP behind
Speaker Paul Ryan’s American Health Care Act, offering concessions meant to
win over the party’s moderate and conservative members.
The deal—brokered by centrist Tuesday Group co-chair Tom MacArthur and
hard-right Freedom Caucus head Mark Meadows—proposes giving states more
flexibility to opt out of major Obamacare provisions, while also preserving
popular protections like the law’s ban on discrimination against people
with pre-existing conditions.
It remains unclear whether the proposal can succeed in shifting any votes.
While the Administration originally pushed for a vote this week, it began
to soft pedal the need for a vote this week. According to a draft of the
tentative deal, the latest proposal would allow states to apply for
so-called limited waivers to opt out of Obamacare’s standards setting
minimum benefits that health plans must offer and a requirement—called
community rating—forbidding insurers from charging different prices to
people who are the same age.
At the same time, the deal would maintain several Obamacare protections
supported by centrist Republicans, including the prohibition on denying
people coverage based on pre-existing conditions. It would also force
states that opt out of the community rating rules to set up separate
insurance pools, known as “high-risk pools,” where people priced out of the
private market could go to purchase coverage.
NAIC Urges Congress to Appropriate Obamacare Subsidy Funds
April 19 letter to House and Senate leaders, the
National Association of Insurance Commissioners (NAIC) urged Congress to
fund Obamacare’s cost-sharing subsidies in the upcoming continuing
resolution for 2017, as well as for 2018. NAIC is a trade association
representing state insurance regulators.
NAIC wrote that appropriating the subsidy money is “critical to the
viability and stability of the individual health insurance markets in a
significant number of states across the country.”
The subsidies reduce out-of-pocket costs for Obamacare customers with
incomes of up to 250 percent of the federal poverty level. However, House
Republicans sued over funding for the program and scored a legal victory in
court last year that threatens to halt the subsidies.
The decision was appealed by the Obama administration, but the lawsuit has
been put on hold until May 22 while the Trump administration decides how to
proceed. Officials have given several mixed signals about whether the
funding will continue. Should it cease, the NAIC warns that insurers will
ask for double-digit premium increases when they make 2018 pricing requests
to state regulators. Also, carriers could exit from the markets altogether
next year, a potential some insurers have already voiced.
“As long as the court case, House v. Price, remains unresolved and
federal funding is not assured, carriers will be forced to think twice
about participating on the exchanges,” the group wrote. “Even if they do
decide to participate, state regulators have been informed that the
uncertainty of this funding could add a 15 percent to 20 percent load to
Congress Releases Draft User Fee Bill
On April 14, Congress released a discussion
draft of a bill
to reauthorize the FDA’s various user fee programs, commonly referred to as
“the UFAs.” The FDA Reauthorization Act (FDARA) would renew the agency’s
authority to collect user fees in fiscal years 2018 through 2022 and put
into effect the commitments negotiated by FDA and regulated industry.
Without such legislative action, the authority to collect user fees is set
to expire on Sept. 30. If the user fee programs aren’t reauthorized before
August, FDA will have to send layoff notices to more than 5,000 employees
whose positions are supported through user fee funds—and if not enacted, it
would cripple the agency’s drug and device review functions. However, it
appears both the Senate and House are interested in a timely
reauthorization, with Energy and Commerce Committee Chairman Greg Walden
(R-OR) stating that the House is committed to a timely reauthorization of
the agreements. Senate HELP Committee Chairman Lamar Alexander (R-TN) also
stated they would like the agreements to be reauthorized quickly.
Walden’s statement on the draft’s release hinted that additional policies
could still make it into the bill.
Senate HELP Committee to Vote on Scott Gottlieb Nomination to Run the FDA
The Senate HELP Committee
this Wednesday on Scott Gottlieb’s nomination to run the FDA.
Gottlieb is widely expected to gain approval, despite concerns about
widespread ties to companies regulated by the agency. Gottlieb has
indicated that he will recuse himself for one year from any FDA decisions
involving about 20 health care companies he has worked with.
Republicans, including HELP Committee Chairman Lamar Alexander (R-TN), have
heaped praise on Gottlieb, who served as a deputy commissioner at the
agency during the George W. Bush administration.
Senate HELP Committee to Consider Four Health Care Bills
The Senate HELP Committee recently announced that it will consider four
health care bills with bipartisan support at a hearing on April 26. The
bills include proposals to improve screening for hearing loss in kids and
to bolster efforts to prepare for new public health threats like the Zika
virus. The bills to be considered are as follows:
S. 652, Early Hearing Detection and Intervention Act of 2017
H.R. 309, National Clinical Care Commission Act
- S. ___, Protecting Patient Access to Emergency Medications Act of 2017
- S. 849, SMASH Act
- Nomination of Scott Gottlieb to serve as the commissioner of Food and
To view the hearing,
Sen. Grassley Raising Concerns Over Insurer’s Brand Drug Penalties
Sen. Chuck Grassley (R-IA) is raising concerns about an insurance company’s
practice of charging patients a penalty when they are prescribed a brand
name drug and a cheaper generic product is available.
Grassley is concerned that patients in CareFirst BlueCross BlueShield plans
are being charged a “brand penalty”—the difference between the price of the
brand drug and its generic—instead of the typical copay or coinsurance,
even though a physician prescribed the brand version for medical reasons.
In addition, according to Grassley’s office, the brand penalty does not
count toward a patient’s deductible.
to the insurer sent April 17, Grassley
requests more information on how CareFirst is applying the brand penalty
and whether this is a common industry payment tactic. Grassley’s office
wants to look at the use of brand penalties across the industry.
Grassley questions whether this practice violates CareFirst’s policies, as
well as federal law. Grassley’s letter says the Public Health Service Act
requires plans to waive cost sharing for the brand drug when medically
necessary, according to the Department of Labor Employee Benefits Security
Grassley is also concerned that in some cases CareFirst is overcharging
pharmacies when they give a patient a brand drug because a generic is no
Trump Nominates Two for Top HHS Positions
On April 21, the Administration nominated Elinore McCance-Katz as
HHS assistant secretary for mental health and substance use and Brett
Giroir as HHS assistant secretary for health.
McCance-Katz, who was previously the chief medical officer at the Substance
Abuse and Mental Health Services Administration, would oversee SAMHSA and
coordinate the nation’s mental health and substance abuse treatment
programs at other agencies throughout the federal government. The position
was created by last year’s 21st Century Cures Act. McCance-Katz blasted
SAMHSA last year, saying that she left after two years because it was “time
Giroir, a former CEO of the Texas A&M Health Science Center, was most
recently president and CEO of ViraCyte, a biopharmaceutical company.
Surgeon General Terminated
U.S. Surgeon General Vivek Murthy, a holdover from the Obama
Administration, was let go by the Administration on April 21. Trump has
repeatedly vowed to turn over his agencies’ leadership, firing officials
from across different departments with ties to the previous administration.
Murthy also had been visibly excluded from the White House’s public health
efforts. Days after the election, Murthy released the surgeon general’s
first-ever report on addiction, which was months in the making. However, the Trump administration is planning its own months-long study, and
Murthy was disinvited from the White House’s planned opioids commission.
Rear Admiral Sylvia Trent-Adams, a nurse who’s been with the Commissioned
Corps since 1992, replaced Murthy immediately as Acting Surgeon General.
President Trump Signs VA Choice Program Extension Bill
On April 19, President Donald Trump signed legislation extending the
Veterans’ Choice Program, ahead of its anticipated expiration in August.
The legislation removes the program’s August sunset date and allows the
Veterans Affairs Department to spend nearly $1 billion in remaining
emergency funding to subsidize non-VA medical care for veterans who face
long wait times or distances to access VA medical facilities.
The bill easily passed the House and Senate earlier this month, over
criticisms from members of both parties that the emergency program has been
poorly implemented and is in need of major reform.
The extension Trump signed allows more time for the VA to provide medical
care through the program while lawmakers and the department hammer out a
long-term fix. VA Secretary David Shulkin has said he aims to roll out a
replacement for the Choice program this fall.
HHS Keeps Hiring Ban, Leaving FDA With Nearly 1,000 Vacancies to Fill
The administration will continue on with a hiring freeze, despite a memo
sent by OMB that lifted the government-wide ban instituted at the beginning
of the Trump administration. Instead, it directed the agencies to develop
plans for deep personnel cuts. HHS said it will leave the hiring
restrictions in place until it develops strategies to address the OMB memo.
FDA has nearly 1,000 vacancies to fill. According to the documents, FDA is
permitted to hire certain staff, including some positions paid for by user
fees, which are funded by industry rather than taxpayer dollars. However,
an agency staffer was still concerned about FDA’s ability to hire because
many of the positions exempted from the freeze were lower on the government
payscale. This could make it difficult for the agency to hire the type of
senior scientists Congress intended when it gave the agency new hiring
power in the Cures Act.
FDA Holding Public Workshop to Discuss Pain Management and Safe Use of Opioid Analgesics
The FDA recently announced it will hold a public workshop on May 9th and
10th with experts from a variety of federal and state agencies to discuss
the role of federal training on pain management and prescribing of opioids.
The meeting comes in the wake of a May 2016 meeting of two FDA advisory
committees where it was recommended that the training program for an
opioid-related Risk Evaluation and Mitigation Strategy (REMS) be broadened,
as well as a July 2016 request from HHS for information on the most
promising approaches for educating prescribers on opioids.
The public workshop, “Training Health Care Providers on Pain Management and Safe Use of
Opioid Analgesics-Exploring the Path Forward,” will include speakers from FDA, CMS, the Drug Enforcement Administration
(DEA) and the departments of Veterans Affairs and Defense, among other
federal and state agencies.
The meeting will explore: the role of federal training in improving pain
management; the merits and challenges of federal and state governments’, as
well as public-private partnerships’, providing education on pain
management; and the aspects of the opioid epidemic that can be most
impacted by training providers, and how to measure those improvements.
The meeting will also build on HHS’s request for information on the most
promising approaches in opioid prescriber education and ways to leverage
HHS programs to expand these promising programs.
Persons interested in attending the workshop must register online before
May 1, 2017.
FDA Advisory Committee to Meet to Consider Biosimilar to Amgen’s
on April 17 that it will convene an advisory committee meeting on May 25 to
consider what could become the first FDA-approved biosimilar to Amgen’s
Epogen/Procrit (epoetin alfa). Amgen’s Epogen/Procit biologic was first
licensed in 1989, according to the Purple Book. FDA currently has no
biosimilar approved for the product, but the European Medicines Agency has
had a licensed biosimilar for epoetin alfa since 2007.
The agency’s Oncologic Drugs Advisory Committee will consider whether to
recommend FDA approve the product for four indications related to anemia.
Hospira’s application for an epoetin alfa biosimilar lists the following
indications: “(1) For the treatment of anemia due to chronic kidney
disease, including patients on dialysis and not on dialysis, to decrease
the need for red blood cell (RBC) transfusion; (2) for the treatment of
anemia due to zidovudine administered at [less than or equal to] 4,200
mg/week in HIV-infected patients with endogenous serum erythropoietin
levels of [less than or equal to] 500 m units/mL; (3) for the treatment of
anemia in patients with nonmyeloid malignancies where anemia is due to the
effect of concomitant myelosuppresive chemotherapy, and upon initiation,
there is a minimum of 2 additional months of planned chemotherapy; and (4)
to reduce the need for allogeneic RBC transfusions among patients with
perioperative hemoglobin > 10 to [less than or equal to]13 g/dL who are
at high risk for perioperative blood loss from elective, noncardiac, and
Supreme Court Refuses to Hear Obamacare Case
On April 17, the Supreme Court said it will not hear a lawsuit challenging
an Obama administration policy allowing insurers to continue offering
health plans not compliant with the Affordable Care Act.
West Virginia sued the Obama administration three years ago over its
decision to let states determine whether insurers could extend these health
plans. The Obama administration crafted the policy to tamp down the outcry
over millions of health plan cancellations in fall 2013, just before
Obamacare’s major insurance rules took effect. West Virginia argued that
the Obama administration didn’t have the authority to force states to
decide whether to enforce the federal rules.
The Supreme Court’s refusal to hear the case, West Virginia v. HHS,
was expected. The U.S. Court of Appeals for the District of Columbia last
West Virginia lacked standing to bring the case.
The Obama administration extended the phase-out date for the “transitional”
health plans several times. In February, the Trump administration again
extended the policy through 2018.
4. State Activities
New York: Mayor de Blasio Proposes Raising the Price of Cigarettes
New York Mayor Bill de Blasio wants to raise the minimum price of a pack of
cigarettes to $13, up from $10.50. The move, if passed by the City Council,
would once again make New York City the most expensive place in the country
to buy a pack of cigarettes. The goal is to reduce the smoking rate to 12
percent by 2020, down from 14.3 percent. The bill is expected to receive a
hearing on Thursday.
Oregon: Joint Legislative Committee Considering Ending Medicaid Expansion
A joint legislative committee
ending Obamacare’s expansion of Medicaid to help plug a $1.6 billion budget
gap, along with several other potential options. The legislative committee
on Ways and Means, which is tasked with setting budget policy, estimated
that eliminating Medicaid expansion would save $256 million between 2017
and 2019. At the same time, Oregon would also lose roughly $5 billion in
federal Medicaid funding. Oregon appears to be the first blue state
considering ending the program because of budgetary pressures. However, it
remains to be seen whether winding down Medicaid expansion—which covers
roughly 350,000 low-income adults—would garner support from the
Democratic-controlled legislature, as well as from Democratic Gov. Kate
Texas: 10 Percent of Texans Rank Health Care as Most Important Issue
Even as congressional Republicans prioritize repealing the ACA, Texas
voters don’t seem to have health care on their minds. About 10 percent of
Texans ranked health care as the most important issue facing the country,
according to the newly released figures
from the annual Texas Lyceum poll, an independent survey of 1,000 adults in
early April. More Texans surveyed thought immigration and education were
most important. Health care came in fourth place.
5. Regulations Open for Comment
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.
CMS Releases Proposed Hospital Pay Rule
In a new proposed
2018 Medicare payment rule, CMS
says it will look to cut hospital industry regulations and streamline
oversight, and it’s asking hospitals themselves for help. The agency is
soliciting ideas for changes to rules and procedures governing acute-care
and long-term care hospitals. The initiative aims to “relieve regulatory
burdens for providers,” as well as promote flexibility and innovation, CMS
said in a statement.
The new proposed rule would suspend for one year a provision penalizing
long-term care hospitals that receive more than 25 percent of patients from
a single acute-care hospital. It would also reduce certain quality
reporting requirements for hospitals that have implemented electronic
CMS projects the rule would increase Medicare spending on inpatient
hospital services by $3.1 billion in 2018, with operating payments to
hospitals increasing 2.9 percent. Long-term care hospitals’ Medicare
payments are projected to decrease by $173 million, or 3.75 percent, over
the same period.
Comments on the rule must be submitted no later than 5 p.m. EDT on June 13,
CMS Proposes 2018 Payment and Policy Updates for Medicare Hospital
CMS is offering hospitals a 90-day meaningful use reporting period in 2018,
according to a
proposed payment rule
released April 14.
The first major payment regulation released under HHS Secretary Tom Price
marks a change from the back-and-forth over electronic health records
meaningful use requirements seen under the Obama White House. The previous
administration would typically propose a yearlong reporting period, then
scale it back at the last minute after intense lobbying pressure. As a
Republican congressman from Georgia, Price often pushed the Obama
administration hard for 90-day meaningful use reporting periods.
In connection with the 21st Century Cures Act, CMS also is
to remove from meaningful use clinicians who see most of their patients at
ambulatory surgery centers.
Price and CMS are also changing previously finalized requirements from
electronic clinical quality measures. Under the proposed rule, hospitals
can select six measures and report on them for the first three quarters of
For more information,
JAMA Study Finds CDC Guidelines Omit Major Cause of Opioid Use
A new study published in JAMA Surgery found that despite sharp focus
on the opioid epidemic following the 2016 release of the CDC Guideline for
Prescribing Opioids for Chronic Pain, the guidelines fail to
address—and little attention has been paid overall to—prescribing practices
that lead to the persistent use of opioids after elective, outpatient
surgery. However, more than two million people—about 6 percent of patients
who undergo both minor and major surgeries—continued using opioids for
longer than 90 days after their procedure, making new and persistent use of
opioids “one of the most common complications after elective, outpatient
surgery,” according to researchers with the University of Michigan Medical
School, Ann Arbor.
Researchers found no difference in opioid use among people who had both
major and minor surgical procedures, leading them to conclude that patients
likely continue using opioids for reasons other than intensity of surgical
pain. More must be done, they said, to understand and address the issue.
To see the study,
IRS Releases Mid-Season Report for 2017 Filing Season
According to a
from the Treasury Inspector General for Tax Administration (TIGTA),
one-third fewer Americans told the IRS that they had minimal essential
coverage compared to the same time frame last year, but IRS has collected
20 percent more in penalties.
The report comes amid concerns that the Trump administration will not
proactively implement the ACA’s individual mandate, which could further
undermine the insurance markets.
There were 47 million people who submitted a tax return to indicate
essential coverage for all their family members in 2016, but only 44.1
million reported such coverage in 2017, a 33.3 percent decrease. Six
million people reported an exemption from essential coverage in 2016 and
that dropped to 5.3 million in 2017. The amount of individuals reporting
shared responsibility payments (SRPs) also decreased from 2.7 million in
2016 to 1.8 million in 2017. But the amount of SRPs jumped 20 percent from
$1 billion in 2016 to $1.2 billion in 2017.
The IRS says that it will be enforcing the mandate as it has in earlier
GAO Examines CMS Oversight and Support of States’ Medicaid Program Integrity Efforts
In a new report, GAO examined CMS’s oversight and support of states’
Medicaid program integrity efforts. GAO studied, among other issues: (1)
how CMS tailors its reviews to states’ circumstances; (2) states’
experiences with collaborative audits; and (3) CMS’s steps to share
promising program integrity practices. GAO reviewed CMS documents,
including state program integrity reports, and data on collaborative
audits. GAO interviewed officials from CMS and eight states selected based
on expenditures, managed care use and number of collaborative audits, among
CMS reviews states’ efforts to reduce improper Medicaid payments, and
encourages them to use collaborative audits—where CMS contractors and
states work together to review the accuracy of payments made. However, some
states have reported barriers (such as staff burden) to participating in
GAO found that CMS lacks a systematic approach to collecting and
communicating information about state practices to reduce Medicaid improper
payments and recommended that the agency collect and share these practices,
and work to increase states’ participation in collaborative audits.
To read the report,
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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