May 1, 2017
Washington Healthcare Update
This Week: Congress passes short-term spending bill to keep the federal government
open… Despite health care “deal,” House leadership is still looking for
votes to bring repeal/replace to the floor…FDA nominee gets a vote.
4. State Activities
5. Regulations Open for Comment
House Delays Obamacare Repeal Vote
On April 27, House Republican leaders decided to delay a vote on their
Obamacare repeal bill until this week at the earliest. After a late-night
meeting on Thursday, Speaker Paul Ryan determined that at least 15 House
Republicans are opposed and another 20 are leaning to no or are
undecided. Republicans who backed earlier versions of the proposal,
including Reps. Mike Coffman of Colorado and Adam Kinzinger of Illinois,
said they were now undecided.
In order to pass the legislation Republicans cannot lose more than 22
votes. Democrats remain unified in opposition.
Judiciary Committees Reintroduce Bipartisan Bill to Expand Generic Competition
Leaders of the Senate and House judiciary committees
reintroduced a bill
on April 27 meant to make it harder for brand drug companies to keep
generic competitors off the market.
The CREATES Act of 2017 would help generic manufacturers obtain access to
drug samples they need to bring cheaper versions to market. The bill would
also make it harder for drug companies to use FDA-mandated safety programs
to keep generic competition off the market.
Sponsors of the Senate bill include Patrick Leahy (D-VT), Chuck Grassley
(R-IA), Dianne Feinstein (D-CA), Amy Klobuchar (D-MN) and Mike Lee (R-UT).
In the House, the bill is sponsored by Reps. Tom Marino (R-PA) and David
The Congressional Budget Office (CBO) has estimated the bill would decrease
the federal deficit by $3.3 billion. Savings to consumers and insurers
would likely be much greater, the bill sponsors say.
The legislation has been endorsed by the generic drug lobby, the
Association for Accessible Medicines, America’s Health Insurance Plans, the
American Hospital Association, the American College of Physicians and a
number of consumer groups like AARP.
FDA commissioner nominee Scott Gottlieb indicated in written responses to
the Senate he could support the bill. “If manufacturers inappropriately
refuse to provide their product to prospective generic competitors, this
would be a concern to FDA and become a matter for potential enforcement
action by the Federal Trade Commission,” he wrote.
The brand drug industry has previously lobbied hard against this bill. It
was dropped as a pay-for in the 21st Century Cures Act last year because of
Appropriators Offer One-Week Stopgap Spending Bill
The House and Senate passed a short-term spending bill that would give
lawmakers an extra week to strike a final deal on spending and avert a
In announcing the
stopgap bill, top Republican
appropriators in both chambers said lawmakers are close to an agreement
that would fully fund the government through September, however they need
more time to hash out final details before the deadline for fiscal 2017
Both spending committee chairmen—Rep. Rodney Frelinghuysen (R-NJ) and Sen.
Thad Cochran (R-MS)—said lawmakers have made “substantial progress” toward
an agreement. Democrats this week said they would refuse to back a
short-term continuing resolution until it became clear both parties would
reach a deal on updated spending levels for the remainder of fiscal 2017.
Democrats Question CMS Decision to Fund Florida’s LIP Medicaid Payments
House Energy and Commerce ranking member Frank Pallone and Senate Finance
ranking member Ron Wyden sent a letter last week to CMS Administrator Seema
Verma asking for information on the agency’s decision to give Florida $1.5
billion for its Low-Income Pool program.
“CMS has cited significant concerns with the structure and functioning of
the Florida LIP in the past,” they wrote. “We are deeply concerned with
CMS’s lack of transparency and documentation around the approval of the
additional funds and the absence of a clear plan moving forward to ensure
that the statutory objectives of the Medicaid program are met.”
To see the letter,
Senate Finance Committee Plans CHIP Hearing May 9
The Senate Finance Committee is expected to hold a hearing May 9 about the
future of the Children’s Health Insurance Program (CHIP).
Congress faces a Sept. 30 deadline to extend funding for the program.
CMS data, CHIP covered roughly 5.6 million children as of February. Without an
extension, states are set to run out of federal funds beginning in October,
with the majority of states exhausting their money between January and
March, according to the Medicaid and CHIP Payment and Access Commission.
Governors from both parties have urged Congress to quickly approve new
funds for the program, as states set their budgets for the next fiscal
year. The federal government provides the majority of funds for the
program, with match rates ranging from 88 percent to 100 percent.
There has been no official announcement for the hearing as of yet.
Senate HELP Committee Votes to Advance FDA Nominee Gottlieb
On April 27, the Senate HELP Committee voted 14-9 to advance Scott
Gottlieb’s nomination for FDA commissioner, with two Senate Democrats
breaking with their party to support him.
The vote, originally scheduled for April 26, was delayed a day after
ranking member Patty Murray said the committee needed more time to review
new information about Gottlieb’s financial ties, which have been an issue
Democrats have contested the doctor’s ties to some of the largest players
in the health care industry. In an agreement with the Office of Government
Ethics, Gottlieb said that he would recuse himself from more than 20
companies for one year, though Democrats were pushing for longer.
Sens. Michael Bennet (D-CO) and Sheldon Whitehouse (D-RI) voted by proxy to
support Gottlieb’s nomination.
Gottlieb was the FDA’s deputy commissioner for scientific affairs from 2005
to 2007 and chief policy adviser to the CMS administrator in 2004 during
implementation of Medicare’s prescription drug program. He has since served
on the board of various companies, including GlaxoSmithKline’s research and
development board, and he advised numerous others through the venture
capital firm New Enterprise Associates.
Governors Ask Congress to Fund Obamacare Subsidies
In a new letter, the National Governors Association asked
Congress to fully fund Obamacare’s cost-sharing subsidies through 2018,
making a rare show of bipartisan support from governors for an Obamacare
The association is urging lawmakers to include funding for the subsidies in
the fiscal year 2017 spending bill that lawmakers are negotiating to keep
the government open, as well as full funding for 2018.
“Already, many states have seen significant reductions in insurer
participation in their individual insurance markets in addition to large
increases in unsubsidized premiums,” NGA executive director Scott Pattison
writes. “Currently, insurers across the country are developing their rates
and deciding whether to participate in the individual marketplaces in
State insurance regulators, insurers and other health care groups are
urging Congress to act, warning that the Obamacare markets could collapse
next year if uncertainty about the funding continues.
However, House Speaker Paul Ryan said Congress will not provide the funding
in the spending bill, while White House officials are telling lawmakers the
administration will continue making the payments.
If Congress refuses to fund the subsidies, the Trump administration must
decide by next month whether to fight the House lawsuit that lawmakers
filed to block the payments.
The letter was written to House Speaker Paul Ryan (WI), House Minority
Leader Nancy Pelosi (CA), Senate Majority Leader Mitch McConnell (KY) and
Senate Democratic Leader Charles Schumer (NY).
Molina Threatens Immediate Exchange Exit If CSRs Not Funded
Molina Healthcare CEO J. Mario Molina warned congressional leaders April 27
that the issuer would have no choice but to immediately send a default
notice to the government and seek to withdraw from the exchange markets if
the government fails to continue the ACA’s cost-sharing reduction payments.
Also, a coalition of issuers, providers and business groups said the
payments must be funded for at least two years in order to provide needed
clarity and stability.
Molina’s move comes after Anthem CEO Joseph Swedish said April 26 that the
company will file preliminary rates under the assumption that the CSRs will
be funded. He added, however, if there is no certainty by early June,
Anthem would need to consider adjustments, including reducing service
areas, increasing rates, ending some products or exiting certain markets
Molina points out that the company entered into the contracts with CMS with
the expectation that payments would continue to be fully funded. “If the
CSR is not funded, we will have no choice but to send a notice of default
informing the government that we are dropping our contracts for their
failure to pay premiums and seek to withdraw from the Marketplace
immediately,” Molina said. “That would result in about 650,000-700,000
people losing insurance coverage in 2017, and we would not participate in
CMS included in the 2017 exchange contracts a clause that acknowledges
their filings were based on assumptions that the CSRs would be in place,
and thus their disappearance would be a cause for termination subject to
President Trump Names Charmaine Yoest to Top HHS Post
On April 28, President Donald Trump said he would name Charmaine Yoest to
be assistant secretary of public affairs at HHS.
Charmaine Yoest is a senior fellow at American Values and previously served
as president and CEO of Americans United for Life, a public interest law
firm. She began her career serving in the White House under Ronald Reagan
in the Office of Presidential Personnel.
The assistant secretary of public affairs shapes communications efforts for
the entire agency.
CMS Office of Minority Health Releases Medicare Advantage Reports on Disparities in Care
The CMS Office of Minority Health released new Medicare Advantage (MA) data
on racial and ethnic disparities in care. The data helps reveal the
connections between a person’s race, ethnicity and gender and the health
care that they receive.
Two new reports focus on the treatment and patient care experiences for a
variety of conditions. The
first report looks at racial and ethnic disparities by gender and examines differences
between black, Hispanic, Asian and Pacific Islander and white MA
beneficiaries in rates of colorectal cancer screening, treatment for
chronic lung disease and other conditions as well as their ability to
access needed care.
looks at racial and ethnic minorities; people with disabilities; members of
the lesbian, gay, bisexual and transgender community; and rural populations
in quality of treatment for certain conditions among MA beneficiaries. It
shows that women receive better treatment for chronic lung disease and
rheumatoid arthritis and are more likely than men to receive proper
follow-up care after being hospitalized for a mental health disorder.
For more information,
Anthem Continues Consideration of 2018 Obamacare Option
Anthem is still evaluating how aggressively to compete for Obamacare
customers next year as Republicans struggle to repeal the health care law.
“We will continue to focus on participating in only those markets which are
on a visible path toward sustainability,” Anthem CEO Joseph Swedish said on
an April 26 call with investors to discuss first quarter earnings.
Anthem officials applauded a recent Trump administration regulation meant
to stabilize the Obamacare marketplaces. But they expressed concerns about
whether Washington will continue funding cost-sharing subsidies and called
for elimination of Obamacare’s health insurance tax.
Anthem had 1.1 million exchange customers at the end of March—or roughly 10
percent of the total market. An additional 500,000 individual market
customers are in Obamacare plans purchased outside the marketplaces, and
300,000 are in non-compliant plans.
Anthem is the largest Blue Cross Blue Shield plan in the country,
dominating the Obamacare marketplaces in many of the 14 states where it
primarily does business.
Anthem officials continue to seek approval of the company’s proposed $54
billion acquisition of Cigna, even though Cigna tried to terminate the
merger after a federal judge blocked it. The merger case is on appeal.
FDA May Need to Weigh In to Solve Biosimilar Dispute, Supreme Court Justices Say
The U.S. Supreme Court heard arguments April 26 in a case that pitted
branded biologic maker Amgen against biosimilar maker Sandoz. Sandoz was
the first company to get a biosimilar approved in the U.S.—a copycat of
Amgen’s Neupogen, which is used to prevent infections in cancer patients.
The case will have broad consequences for how fast cheaper versions of
biologic medicines—near copycats of some of the most expensive drugs
available today—reach patients.
Sandoz is protesting a Federal Circuit decision that said a biosimilar
manufacturer must await FDA approval before providing the brand company a
legally mandated 180-day notice of intent to market a competing product.
Sandoz says this ruling gives brand biologics an additional six months of
marketing exclusivity that was not intended by Congress. The U.S.
government agreed with Sandoz and argued in its favor at the Supreme
Amgen, meanwhile, is protesting a Federal Circuit decision that arose from
the same case—that biosimilar companies do not have to engage in a
patent-sharing process with the branded biologic manufacturer. Amgen argues
this ruling makes it difficult for companies to determine whether they want
to file patent infringement lawsuits before a biosimilar is sold. The U.S.
government disagreed with Amgen and argued in favor of the Federal
Supreme Court justices suggested that the best way to resolve disputes
between brand and biosimilar companies over a law that allows the FDA to
approve copycat biologics may be to have the agency issue regulations
before the disputes are interpreted by the high court.
Justice Stephen Breyer said there seems to be a lot of ambiguity in the
biosimilar pathway that was created by Obamacare, and that he felt FDA was
best placed to help interpret the conflicts at hand through regulation. He
said there are “many things he did not understand,” and that FDA rulemaking
as a first step would likely lead to a better outcome than if the justices,
who are unfamiliar with the intricacies of the biosimilar process, try and
make sense of the law without the agency’s input.
Breyer said that if FDA weighs in on the law through rulemaking first, then
the drug companies could go back to the courts if they felt the agency’s
interpretation didn’t align with Congress’s intent. He also was not
persuaded that the testimony of the assistant to the solicitor general
could take the place of FDA’s interpretation of the process, as
Breyer’s approach got the support of his much more conservative colleague
Anthony Kennedy, while fellow liberal Justice Ruth Bader Ginsburg asked
whether the U.S. Patent and Trademark Office would perhaps have a role in
clarifying the law.
However, Sandoz’s attorney said she did not think FDA or the PTO would have
any ability to intervene.
But Breyer disagreed. He said FDA wouldn’t need “explicit regulatory
authority,” noting there are many situations in which it would be
appropriate to defer to an agency’s informal interpretation.
Anthony Yang, the assistant to the solicitor general, said FDA had
previously been petitioned to do rulemaking on some of these topics and
Many of the justices did not ask questions; Samuel Alito and the almost
always quiet Clarence Thomas were completely silent, making it hard to
interpret how the court will ultimately rule.
Other justices, including Sotoymayor, seemed to agree with Sandoz’s
position—that the law did not mandate that patent information be shared,
making the practice optional.
4. State Activities
California: California Regulator Asks Insurers to File Two Sets of Premiums
California insurance commissioner Dave Jones
insurers to file two sets of premium requests for 2018 to account for
uncertainty about Obamacare’s future.
The California Department of Insurance wants insurers to file rates
assuming continued implementation of the Affordable Care Act, as well as a
separate set that anticipates the Trump administration halts enforcement of
the individual mandate and gets rid of the law’s cost-sharing subsidies.
Without a congressional appropriation for the cost-sharing subsidies, state
regulators and insurers have warned of significant rate increases for next
year that could destabilize the health law’s markets.
The Trump administration told lawmakers last week that it would continue
funding the cost-sharing subsidies.
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.
FDA Submits Interim Final Rule on Long-Delayed Menu Labeling Rule
On April 27, FDA submitted an
interim final rule
to the White House Office of Management and Budget concerning a
long-delayed menu labeling rule. By submitting an interim final rule to OMB
they are delaying its existing final rule, slated to take effect May 5. The
apparent change in course follows a
by the National Association of Convenience Stores and the National Grocers
Association asking FDA to push back the final rule’s effective date.
The move to submit the interim final rule follows years of controversy and
debate about the menu labeling requirements, which stem from a
little-noticed provision in the Affordable Care Act that calls for
mandatory calorie disclosure on menus at chains that have 20 or more
The agency’s notice to OMB offers no detail about whether it is seeking
other changes to the rule, but says FDA will be taking comments.
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,
CMS is Accepting Measure Submissions for the Advancing Care Information
Performance Category until June 30
CMS is still accepting measures for the Advancing Care Information
performance category of the Merit-based Incentive Payment System (MIPS).
The Annual Call for Measures and Activities ends June 30, 2017.
CMS encourages providers to identify and submit measures for the MIPS
Advancing Care Information performance category. To be considered,
proposals must include specific criteria including, but not limited to,
measure description, measure type and numerator and denominator
CMS requests that stakeholders consider outcome-based measures, patient
safety measures and cross-cutting measures that use certified EHR
technology to support the improvement activities and quality performance
categories of MIPS.
Advancing Care Information Submission Form
to propose measures for inclusion, and send the form to
To learn more about the process for submitting measures, please visit the
Call for Measures
webpage, and review the
Call for Measures and Activities fact sheet.
CMS Looks to Boost Medicare Payments to Rehab Hospitals, Nursing
Facilities and Hospices
CMS could boost Medicare payments to a swath of rehabilitation hospitals,
nursing facilities and hospices under a trio of new proposed rules.
On April 27, the agency floated a
$390 million bump
in federal payments to skilled nursing facilities in 2018—or roughly 1
percent higher than this year. Hospices, meanwhile,
a 1 percent increase worth $180 million.
to increase reimbursement to rehab hospitals by $80 million for 2018, in
addition to eliminating a penalty on facilities that don’t submit certain
data to the federal government on time.
proposed payment rules for other
providers, CMS is asking the industries for input on regulations it should
overhaul or eliminate. CMS Administrator Seema Verma and HHS Secretary Tom
Price have pledged to review all of the agency’s rules in a bid to cut
unnecessary or burdensome regulations.
Comments on the trio of rules must be received no later than 5 p.m. on June
CMS Seeking Comments on Data Elements in IMPACT Act
CMS has contracted with the RAND Corporation to develop standardized
patient/resident assessment data elements in alignment with the Improving
Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act).
CMS seeks comments from stakeholders on data elements that meet the IMPACT
Act domains of cognitive function and mental status; medical conditions and
co-morbidities; impairments; medication reconciliation; and care
preferences. The public comment period opens on April 26, 2017, and closes
on June 26, 2017.
For more information, view the
CMS Issues 2018 IPPS Proposed Rule
CMS issued the FY 2018 Inpatient Prospective Payment System (IPPS) and Long
Term Acute Care Hospital (LTCH) rule on April 14, which proposes a number
of changes to the Medicare and Medicaid Electronic Health Record (EHR)
The proposals include:
For CY 2018, modifying the EHR reporting period from the full calendar
year to a minimum of any continuous 90-day period for new and returning
participants in the Medicare and Medicaid EHR Incentive programs.
Adding a new exception from the Medicare payment adjustments for
Eligible Professionals (EPs), Eligible Hospitals and Critical Access
Hospitals (CAHs) that demonstrate through an application process that
complying with the requirement for being a meaningful EHR user is not
possible because their certified EHR technology has been decertified
under ONC’s Health IT Certification Program.
Implementing a policy in which no payment adjustments will be made for
EPs who furnish “substantially all” of their covered professional
services in an ambulatory surgical center (ASC); applicable for the
2017 and 2018 Medicare payment adjustments.
Using Place of Service (POS) code 24 to identify services furnished in
an ASC as well as requesting public comment on whether other POS codes
or mechanisms should be used to identify sites of service in addition
to or in lieu of POS code 24.
Comments must be submitted by 5 p.m. on June 13, 2017.
To learn more, review the
GAO Report Examines Availability, Outcomes of Pediatric Trauma Centers
new report, GAO examined what is known about the availability of trauma centers for
children, the outcomes for children treated at different types of
facilities and how federal agencies are involved in supporting pediatric
GAO found that 57 percent of the nation’s 74 million children lived within
30 miles of a pediatric trauma center that can treat pediatric injuries,
regardless of severity.
More children die of injury each year than from all other causes combined.
Although most traumatic injuries are treated in hospital emergency
departments, hospitals may not have the resources needed to treat injured
children. For example, they may lack specially sized medical equipment.
Pediatric trauma centers, however, have these resources.
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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