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May 15, 2017

Washington Healthcare Update

This Week: FDA administrator confirmed…HELP Committee reports out a User Fee bill…Chronic Care bill hearing coming…Senate Republicans create work group to develop repeal/replace legislation.

1. Congress



2. Administration

3. Courts

4. Other

5. State Activities

6. Regulations Open for Comment

7. Reports

1. Congress


NGA Asks Congress to Extend Federal CHIP Funding

Virginia Gov. Terry McAuliffe and Massachusetts Gov. Charlie Baker, co-chairs of the National Governors Association (NGA), wrote in a bipartisan letter to leaders of the House Energy and Commerce and Senate Finance committees urging Congress to extend federal funding for the Children’s Health Insurance Program (CHIP) another five years at current levels. Congress faces a Sept. 30 deadline to extend funding for the program, which covered roughly 5.6 million children as of February, according to the latest CMS data. Without an extension, states will start running out of federal funds in October, with the majority of states exhausting their money between January and March, according to the Medicaid and CHIP Payment and Access Commission. McAuliffe and Baker said states quickly need funding certainty for their budgets.

Energy and Commerce Leaders Want Response to Alleged Pill Dumping in West Virginia

On May 9, both Republican and Democratic leaders of the House Energy and Commerce Committee sent letters to the Drug Enforcement Administration (DEA) and distributers regarding reports of unusually large quantities of opioids being distributed in West Virginia—one of the states hit hardest by the opioid epidemic.

To see the letters, click here.


Senate GOP Looks at Medicaid Expansion States in Health Reform

Sen. Rob Portman (R-OH), among those working on the Senate version of health reform, said the group discussed a softer landing for Medicaid expansion states than that provided by the House bill during a meeting May 9 on Medicaid policy.

Senate Majority Leader Mitch McConnell’s (R-KY) select group of lawmakers working on health reform legislation met to discuss Medicaid policy prior to a meeting that included all the Senate Republicans as well as Vice President Mike Pence. Majority Whip John Cornyn (R-TX) said Medicaid is an area where Senate Republicans can negotiate a compromise in order to pass their own version of the American Health Care Act (AHCA).

Under the House-passed version of the AHCA, increased federal funding for the Medicaid expansion population would stop by 2020. Should states choose to continue covering childless adults with annual incomes up to 138 percent of poverty, they would receive only the state’s traditional matching rate. On top of that, the federal contribution would be further limited to the designated per-person amount laid out under AHCA’s per-capita caps system.

Medicaid advocates have said that states are unlikely to extend coverage for that population beyond 2020 because they won’t be able to afford it. Several states have triggers in place to end expansion if federal financing is reduced.

Senate Finance Committee to Hold Hearing on Bipartisan Chronic Care Bill

The Senate Finance Committee announced plans to hold a hearing on Medicare chronic care legislation on May 16. Committee Chair Orrin Hatch (R-UT) has touted the legislation as the first major bipartisan health care bill of this Congress. The committee postponed a hearing on the Children’s Health Insurance Program (CHIP).

The legislation would expand testing of the CMS Innovation Center’s Value-Based Insurance Design model, ease telehealth restrictions and change beneficiary assignment to accountable care organizations. It would extend the Independence at Home demonstration for two years and increase the cap on the total number of beneficiaries from 10,000 to 15,000. The bill also would permanently authorize dual-eligible special needs plans, chronic condition SNPs and institutional SNPs, if certain requirements are met.

Democrats may use the platform provided by the hearing to talk about AHCA.

Senate Democrats Demand HHS Enforce Obamacare Anti-Discrimination Rules

On May 10, twenty-one Democratic senators wrote to HHS Secretary Tom Price demanding that HHS’s Office of Civil Rights continue enforcing Obamacare requirements that prevent discrimination in health programs, after what they describe as troubling signals that HHS will undermine them.

The issue centers on a lawsuit brought last year by several GOP states and provider organizations that challenged Section 1557 of the Affordable Care Act, which prohibits discrimination on the basis of race, color, national origin, sex, age or disability in health care programs.

Under the Obama administration, HHS issued final regulations that prevented insurers from having blanket bans on coverage for gender reassignment services and that forbade providers from refusing care to transgender patients, among other protections. But several red states and provider groups argued that the regulation required doctors to perform gender transition procedures even when doing so is against the physician’s medical judgment. A federal judge in late December blocked enforcement nationwide of certain pieces of the Obama-era regulation, and in recent court filings, the Trump administration has suggested it may rework it.

Senate Democrats previously wrote HHS protesting Trump’s decision to appoint Roger Severino as the head of the HHS civil rights office.

Senate HELP Committee Advances FDA User Fee Bill

On May 11, the Senate HELP Committee voted 21-2 to advance the FDA user fee reauthorization bill out of committee with minimal changes. The markup was originally scheduled for May 10 but was postponed.

The committee agreed by voice vote to add two amendments, including a provision from Sens. Susan Collins and Al Franken requiring the FDA to review generic drug applications in about eight months if at least three versions of the treatment are not already on the market.

The panel also agreed by voice vote to a bipartisan amendment led by Sen. Orrin Hatch that would expand clinical trial criteria to allow sicker patients to participate. It would also make it easier for patients to use an FDA program to receive unapproved drugs when they don’t qualify for trials.

The committee voted 13-10 to table an amendment by Sen. Bernie Sanders that would have allowed drug importation from Canada. Committee Chairman Lamar Alexander described the amendment as controversial and asked to delay a vote on it until the bill reaches the floor, to keep the committee process bipartisan.

Sanders and Rand Paul were the only members who voted against the bill.

Sen. Michael Bennet offered but then withdrew an amendment that would require companies to conduct more clinical trials of cancer medicines in pediatric patients.

Seventeen amendments were filed in advance of the hearing, but most were not offered, including Democratic amendments that would have tried to preserve key parts of Obamacare. Many Democrats used the hearing to protest the Senate process for developing a counterpart to the House-passed Obamacare repeal bill, calling on committee Republicans to hold hearings.

The committee also advanced by voice vote S. 1028, the RAISE Family Caregivers Act, out of committee. It would direct the HHS secretary to develop a national strategy to support family caregivers.

To see the 17 proposed amendments, click here.

Scott Gottlieb Confirmed as FDA Chief

On May 9, the Senate confirmed Scott Gottlieb as FDA commissioner, thrusting the conservative drug industry insider into the heated debate over rising drug costs that President Donald Trump has pledged to address.

Gottlieb, a former FDA and CMS official in the George W. Bush administration, sailed through confirmation on a 57-42 vote. He will lead a 15,000-person, $5 billion agency that approves drugs, vaccines and medical devices and regulates tobacco, cosmetics and food.

The position will make Gottlieb an important player in the Trump administration’s plans to speed up the drug approval process and cut back on regulations and red tape, which the president has argued will bring down drug prices.

Democrats Agree to Work With GOP on Health Care, But Not Repeal

Senate Democrats are demanding that Republicans have a “bipartisan, open and transparent” debate on health care.

All 48 Senate Democrats—including two independents who caucus with them—in a new letter say they will work on health care legislation as long as Republicans drop their pledge to repeal Obamacare.

The pitch is unlikely to sway the GOP from their seven-year-long promise to do away with the Affordable Care Act. Now that the House has passed its repeal bill, Senate Republicans are starting to figure out how they would repeal and replace the health law.

Republicans are operating under the assumption that no Democrat will cross party lines to support Obamacare repeal.

“Democrats stand ready—as we always have—to develop legislation with Republicans that will improve quality, lower costs, and expand coverage for all Americans,” the lawmakers wrote to Majority Leader Mitch McConnell and committee chairmen Lamar Alexander and Orrin Hatch. “But Republicans need to set aside their current partisan efforts and work with us to get this done.”

Democrats outlined a number of areas of improvement in health care. They said they want to work on reducing drug prices, decreasing premium and out-of-pocket costs, stabilizing the insurance market and increasing coverage for families and small businesses.

Sen. Wyden Asks FDA to Delay Opioid Workshop Due to Conflicts of Interest

Democratic Sen. Ron Wyden, concerned about conflicts of interest at an FDA workshop on opioids last week, asked HHS Secretary Tom Price to delay the meeting until a more thorough review of meeting participants can be conducted. The meeting went on as planned.

In a letter to Price sent May 5, Wyden detailed the connections to drugmakers of six groups participating in the workshop on May 9 and 10. The meeting looked at ways to improve health care provider training in pain management and safe opioid use.

Wyden said the financial relationships between opioid manufacturers and the pain advocacy groups raise “concerns that could undercut efforts to curb over-prescribing.” Pain groups funded by opioid companies “have worked, oftentimes in concert with other industry-funded groups, to steer state and federal policy toward favoring opioids as a treatment for pain,” Wyden said.

The letter discusses the drug industry connections of the American Academy of Integrative Pain Management, the American Chronic Pain Association, the American Pain Society, the National Fibromyalgia and Chronic Pain Association, the Pain Action Alliance to Implement a National Strategy and Project Lazarus.

2. Administration

CMS Releases Checklist for Stakeholders for High-Risk Pool/Section 1332 Waivers

On May 11, CMS and the U.S. Department of the Treasury released a checklist to help states interested in pursuing Section 1332 waivers. CMS believes this checklist will be particularly helpful for 1332 waivers implementing a high-risk pool/state-operated reinsurance program. The agency is encouraging states interested in applying for Section 1332 waivers to reach out promptly for assistance in formulating an approach that meets the requirements of Section 1332.

The final checklist can be found here.

Sen. Grassley, Rep. Chaffetz Argue HHS Memo Restricting Staff Communication With Congress Is Illegal

Key GOP lawmakers allege a memo by HHS Secretary Tom Price’s chief of staff restricting his agency’s communications with Congress is potentially illegal and unconstitutional, and they demand HHS quickly make all department staff aware of their right to communicate directly and independently with Congress. The HHS memo tracks with White House regulatory affairs-nominee Neomi Rao’s past calls for all contact between lawmakers and agency staff to be documented.

The May 3 memo by Price’s chief of staff, Lance Leggitt, states all HHS communication with lawmakers and congressional staff needs to go through the department’s legislative affairs shop to “help us avoid unnecessary problems in our relationships with Congress.”

The memo drew criticism from Senate Judiciary Chair Charles Grassley (R-IA) and House Oversight Chair Jason Chaffetz (R-UT), who ask HHS to promptly provide all agency staff with specific, written guidance laying out their right to communicate with lawmakers. The guidance should inform agency staff of whistleblower protections and make it clear that the agency won’t retaliate against those who exercise their right to communicate with Congress, the lawmakers say.

“Absent such a clear communication from you, agency management may seek to intimidate whistleblowers from providing information to Congress. We will not allow that to happen and trust that nor will you. Protecting whistleblowers is crucial to effective government and the oversight process,” Grassley and Chaffetz wrote to Price on May 4.

The lawmakers say the HHS memo would force HHS staff to expose communications with Congress to agency management, which would necessarily subject them to an increased risk of reprisal, and the effect of the memo would be to “substantially chill those communications.” Leggitt states in the memo, which he says he wrote on behalf of Price, that the restrictions restate longstanding department policy.

The lawmakers ask for all documents and communication referring or relating to the directive no later than May 18.

CMS Issues New Guidance to States and Manufacturers

CMS recently released guidance to states and manufacturers through State Release #180 and Manufacturer Release #104 to provide clarification on Medicaid reimbursement and rebates for drugs purchased through the Federal Supply Schedule (FSS).

These releases are now available for download here.

President Trump Announces Four Additional Members of Opioids Commission

On May 10, President Donald Trump officially designated New Jersey Gov. Chris Christie to be head of the White House commission on opioids and named four other members to the group:

  • North Carolina Gov. Roy Cooper, a Democrat
  • Massachusetts Gov. Charlie Baker, a Republican
  • Former Democratic Rep. Patrick J. Kennedy, who was addicted to opioids for several years and is now a leader of the Advocates for Opioid Recovery group
  • Bertha Madras, a Harvard biopsychologist and former deputy director in the White House’s Office of National Drug Control Policy

The White House’s commission is poised to play a key role in the administration’s effort to confront the opioid epidemic. Trump also announced that he would appoint Rich Bagger, a former chief of staff to Christie and an executive at the biopharmaceutical company Celgene, as a member of the Commission on White House Fellowships. Bagger was part of Trump’s transition team until being dismissed along with Christie in November when Vice President Mike Pence took over the effort.

Randy Pate Named Director of CCIIO

Randy Pate is now director of CCIIO, the agency that oversees the Obamacare marketplaces. Pate previously served as vice president of public policy for Health Care Service Corporation, which operates Blue Cross Blue Shield plans in five states, including Texas and Illinois. Prior to that, Pate was a health policy fellow at the conservative Heritage Foundation.

He replaces Jeff Wu, who had been serving as acting director during the transition to the Trump administration. The agency spokeswoman did not immediately respond to a question about Wu’s current duties.

CCIIO is charged with overseeing the Obamacare insurance markets, which face an uncertain future under unified Republican control of the federal government. The biggest looming question is whether the Trump administration will continue paying cost-sharing subsidies, which insurers rely on to reduce costs for their poorest Obamacare customers.

Aetna Withdrawing From Obamacare Marketplaces

Aetna recently announced it will not sell coverage in individual marketplaces in Nebraska or Delaware, marking the company’s complete withdrawal from the Obamacare exchanges.

Both states will potentially be left with just one remaining insurer in 2018. Further, Nebraska’s lone insurer, Medica, has already warned it would leave Iowa after becoming the sole option in that state’s marketplace.

Aetna cited losses totaling $700 million in the individual market in the last three years as the reason for its withdrawal. The company expects to lose an additional $200 million despite shedding almost three-quarters of its individual market members since last year. The insurer had 255,000 individual members at the end of March.

Aetna is now the second-largest national insurer to completely withdraw from the exchanges. Humana announced its total exit in February.

Despite the big losses in the Obamacare markets, Aetna continues to see revenue growth in other government programs, primarily Medicare and Medicaid. Roughly half of its premium revenues came from government programs last year, up from 38 percent prior to full implementation of the Affordable Care Act.

Pence, Price Meet With Biotech Industry at the White House

During a recent meeting with industry representatives, Vice President Mike Pence, HHS Secretary Tom Price and other administration officials sketched out how NIH and other agencies can maintain U.S. preeminence in biotechnology. The White House meeting included: Cori Bargmann, president of the Chan Zuckerberg Initiative; Bill Ford, General Atlantic CEO; and Craig Thompson, president and CEO of the Memorial Sloan Kettering Cancer Center. Officials from Celgene, Royalty Pharma, Vertex Pharmaceuticals and Regeneron represented the industry. President Donald Trump later greeted attendees in the Oval Office.

White House press secretary Sean Spicer told reporters that the meeting reinforced the cooperation necessary for the industry to succeed.

MSF Argues Exclusive DOD License for Zika Vaccine Violates Bayh-Dole Act

Doctors Without Borders (MSF) alleges the Department of Defense may have violated the Bayh-Dole Act by issuing Sanofi Pasteur an exclusive license to a DOD-developed Zika vaccine without ensuring the vaccine is accessible to patients. However, DOD says the exclusive license is warranted given the capital needed to bring the drug through FDA approval, and says the department has no means or authority to make determinations on vaccine affordability or access.

“The deal gives Sanofi a blank check to charge high prices for the vaccine and contains no known guarantee that the vaccine will be developed in a timely and appropriate manner and made available in the US and all countries where it is needed,” MSF writes in a press release. Instead, MSF calls on DOD to make the vaccine candidate available for an open non-exclusive patent license. Such a license, the group says, should include terms that ensure further development of the vaccine prioritizes all health needs and offers affordable access to any resulting product.

The doctors group says the exclusive license may violate Section 209 of the Bayh-Dole Act. The law requires that exclusive licenses be granted by the government only in cases where the exclusivity is a “a reasonable and necessary incentive to call forth the investment capital needed to bring the invention to practical application; or otherwise promote the invention’s utilization by the public,” MSF argued in comments to DOD.

But DOD told MSF that the license is in accordance with federal law, and that exclusivity is “a reasonable and necessary incentive to call forth the substantial investment capital, exercise, and capabilities required to bring our nascent and unproven technology through FDA licensure to practical application for public use.”

Comey Pledged New Approach to Cybersecurity in Hospitals

The FBI needs much deeper collaboration with the private sector to mitigate the threats posed by criminals and nation-states to hospital networks, then-director James Comey said in a speech to the American Hospital Association.

“A vast majority of intrusions are not shared with law enforcement,” Comey said, and hospitals hacked with ransomware often pay up and hope that solves the problem. “I understand that instinct, but it is horribly short-sighted,” he said.

The FBI needs to be more effective at sharing information related to cyber-borne threats, and industry needs to share more. It does not have to be an onerous process, he said.

Comey also said the FBI needs to recruit more private-sector tech talent, and to practice deterrence against criminals and other malicious actors by arresting them or otherwise disrupting their schemes.

3. Courts

Anthem Appeals $54B Cigna Merger Case to Supreme Court

In a last-ditch effort to save its troubled $54 billion merger with Cigna, Anthem asked the U.S. Supreme Court to review a circuit court ruling siding with the government in its challenge to the deal.

The D.C. Circuit in its April 28 split ruling relied on outdated, decades-old case law and the court did not adequately take into account more than $2 billion in cost savings the merger would unleash, Anthem said.

“Anthem urges that 1960s-era merger precedents relied upon by the courts below must be updated to reflect the modern understanding of economics and consumer benefit,” the company said in a statement.

The health insurance giant cited a dissenting opinion penned by Circuit Judge Brett M. Kavanaugh in the case, who said the deal would be beneficial for the merged company’s customers. The D.C. Circuit’s ruling is evidence of a circuit split on the question of how merger efficiencies should factor into an analysis of a transaction’s effects on competition, Anthem said.

The suit presents the high court with the opportunity to take up its first merger case in several decades and provide much-needed guidance on efficiencies, Anthem argued in its petition for certiorari. Since 1967’s FTC v. Procter & Gamble Co., when the Supreme Court said economies could not be used as a defense against illegality in merger cases, economic thinking in the area has progressed, and courts are confused on how to interpret that precedent, the company said.

On May 11, a Delaware chancery judge rejected Anthem’s bid for a 60-day block on Cigna’s declared intent to terminate the merger of the two health insurers, saying Anthem’s prospects for overcoming multiple challenges to the deal are slim.

4. Other

PhRMA Sheds 22 Companies After Approving New Membership Criteria

05/09/2017 01:33 PM EDT

On May 9, PhRMA said 22 companies are no longer members after the drug lobby formally approved new criteria requiring companies to devote a portion of their resources to research and development.

The new requirements may allow one of the most recognizable industry lobbying groups to reduce negative headlines from members’ contributing to the high cost of prescription drugs.

The list of departing companies includes five that have voluntarily left the organization since Jan. 1. That includes Marathon Pharmaceuticals, which was widely criticized for its initial price tag of $89,000 for a drug treating Duchenne muscular dystrophy.

Fifteen of the companies were associate members, which will still have the opportunity to apply for full membership under the new rules.

PhRMA’s revised membership criteria require companies to spend at least 10 percent on research and development based on a three-year average of total global sales. That spending must be at least $200 million per year.

The seven former full members are: AMAG Pharmaceuticals, Horizon Pharma, Jazz Pharmaceuticals, Leadiant Biosciences, Mallinckrodt Pharmaceuticals, Orexigen Therapeutics and The Medicines Company.

The former 15 associate members are: ACADIA Pharmaceuticals, Aerie Pharmaceuticals, Avanir Pharmaceuticals, BioMarin Pharmaceutical, CSL Behring, Esperion Therapeutics, Ferring Pharmaceuticals, Grifols USA, Ipsen Biopharmaceuticals, Marathon Pharmaceuticals, Shionogi Inc., Sucampo Pharmaceuticals, Theravance Biopharma, Vifor Pharma and VIVUS.

5. State Activities

California: Gov. Brown Releases New Proposed Budget

California Gov. Jerry Brown’s revised 2017-18 budget continues to rely on Obamacare and Medicaid as they now exist. The new proposed budget, which he released May 11, indicates the Medicaid shortfall has been reduced by $620 million, largely due to savings from drug rebates in managed care and slower-than-expected caseload growth.

But the Medicaid program still has a deficit, and there is ongoing tension between Brown and Medi-Cal providers. The governor still plans to use funds from the state’s new $2-per-pack tobacco tax to close the Medicaid deficit instead of boosting provider rates, restoring services—such as adult dental care—or extending coverage to undocumented young adults. The Legislature has until June 15 to approve the budget.

Illinois: Illinois Senate Approves Abortion Access Bill

The Illinois Senate approved a bill that allows state Medicaid dollars to be used for elective abortion services and protects abortion access in the event that the Supreme Court overturns Roe v. Wade. The bill, which passed the House last month, now heads to Republican Gov. Bruce Rauner’s desk.

Rauner, who has previously claimed to support abortion rights, has vowed to veto the bill—putting him in a tough political position ahead of his reelection effort next year.

Four other states already allow state Medicaid dollars to be used for elective abortions. Federal Medicaid dollars are prohibited from covering abortion, with narrow exceptions including rape, incest or threats to a mother’s life. There are currently 15 states that pay for medically necessary abortion, according to the Guttmacher Institute.

Louisiana: Department of Health Seeking Comment on Drug Pricing Strategies

Louisiana’s Department of Health is seeking comment on two strategies for the federal government to help lower prices for drugs treating hepatitis C, which affects more than 70,000 people in the state. The first idea is for HHS to strike a voluntary licensing agreement with drug makers to make discounted treatments available to Louisianans. The second idea is to use an existing federal patent law to obtain medications at a much lower cost.

In an interview, Health Secretary Rebekah Gee said there are roughly 35,000 Louisianans with hepatitis C who are uninsured or enrolled in Medicaid, but the state is only able to treat around 320 patients per year because of the exorbitant cost of medications.

Gee argues that these approaches could benefit the state for a wide range of treatments, including medications to prevent premature births and a Zika vaccine.

New Jersey: Lawmakers Introduce Bills to Preserve ACA Provisions

Democratic state lawmakers recently introduced three bills meant to preserve Affordable Care Act provisions if the federal health care law is repealed. Two of the bills aim to prohibit New Jersey from applying for certain waivers included the MacArthur amendment, such as the prohibition on charging sicker people higher premiums and coverage of essential health benefits. The third bill would establish a publicly funded and state-run health insurance plan known as the “New Jersey Public Option Health Care Act.” New Jersey law already requires protections for pre-existing conditions, including guaranteed issue and community rating, in the individual and small group insurance markets.

Oregon: Lawmakers Considering Raising Health Care Taxes

Oregon Gov. Kate Brown and state lawmakers are considering raising health care taxes to close a Medicaid budget shortfall that threatens the state’s Obamacare Medicaid expansion. The revenue boost would come from two places: raising an existing provider tax on hospitals and creating a new tax on insurance premiums. A joint legislative committee had considered ending the Medicaid expansion to help plug a $1.6 billion budget gap, along with several other potential options. Expansion covers roughly 350,000 people in Oregon.

6. 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 Notification

On March 14, FDA took one of its first actions to begin implementing the 21st Century Cures Act, by proposing 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 draft guidance outlining how biosimilar sponsors can demonstrate that their products are interchangeable with other biologics, following extension requests from top trade associations.

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 pharmacodynamics.

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 recent petition 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 locations.

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 health records.

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, 2017.

CMS Proposes 2018 Payment and Policy Updates for Medicare Hospital Admissions

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 proposing 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 2018.

For more information, click here.

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 descriptions.

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.

Use the 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, would receive a 1 percent increase worth $180 million.

CMS is planning 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.

Similar to 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 26, 2017.

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 public comment webpage.

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) Incentive Programs.

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 proposed rule or click here.

CMS Publishes Post-Acute Care Proposed Rules

On May 11, CMS published the following proposed rules:

7. Reports

GAO Reviews USDA Actions to Reduce Risks of Avian Influenza

In a new report, GAO reviewed several issues related to avian influenza. GAO found that the U.S. Department of Agriculture (USDA) has taken actions to address lessons learned from its responses to the outbreaks, such as encouraging states to form response teams. However, it does not have a plan to evaluate the effectiveness of its efforts. GAO recommended that USDA develop such a plan.

Avian influenza is an extremely infectious and potentially fatal disease in poultry. In 2014 and 2016, outbreaks in the U.S. led to the death of more than 50 million chickens, turkeys and other birds, and cost billions of dollars. Controlling avian influenza viruses in poultry is crucial to preventing those viruses from evolving to infect people.

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

Stephanie Kennan, Senior Vice President
Charlie Iovino, Vice President
Caroline Perrin, Research Assistant

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