Jun 26, 2017
Washington Healthcare Update
This Week: To vote for the Better Care Reconciliation Act of 2017 or to vote
against—that is the question facing senators this week…Magic number for
passage is 51 senators or 50 senators and the vote of the vice president.
4. State Activities
5. Regulations Open for Comment
Rep. Cummings and Rep. Welch Slam Trump on Drug Prices
House Oversight Committee ranking member Elijah Cummings (D-MD) and Rep.
Peter Welch (D-VT), who met with Trump on drug prices in March, say
recently leaked details of an upcoming executive order on drug prices
suggest that Trump has “abandoned these promises in favor of the very
pharmaceutical lobby you warned of.”
During the presidential campaign and early into his administration, Trump
expressed a willingness to allow consumers to import drugs from Canada and
to empower Medicare to negotiate with drug makers. However, a leaked draft
of the White House’s executive order would include a number of
“Simply put, Mr. President, these measures utterly fail to make good on
your promise to the American people to take aggressive action to cut the
skyrocketing price of prescription drugs,” Cummings and Welch
letter 6.23.pdf) to Trump. “Six months into your presidency, the pricing
power of the pharmaceutical industry continues—unabated and unchecked.”
Diabetes Caucus Writes PhRMA, AHIP, PCMA on Rising
Price of Insulin
Congressional Diabetes Caucus co-chairs Reps. Diana DeGette (D-CO) and Tom
Reed (R-NY) sent letters to the heads of the drug, insurance and pharmacy
benefits manager lobbies on June 22, requesting a meeting to discuss the
increasing cost of insulin and policy solutions to bring the price down
before the end of July.
“Both the underlying cost of insulin and the direct cost burden on patients
with diabetes have risen in recent years,” the pair wrote. “People skip
doses, fail to pay rent or buy groceries and even resort to an insulin
‘black market’ in order to afford their insulin. No one should be forced to
make these difficult choices,” they added.
To read the letter,
GOP Senate Releases Discussion Draft of Legislation to Repeal and Replace the Affordable Care Act
Amid complaints that the legislation was being written in secret, Senate
Majority Leader Mitch McConnell released the “Better Care Reconciliation
Act of 2017,” legislation to repeal and replace the Affordable Care Act. By
the afternoon, four conservative senators had come out against it: Ron
Johnson (R-WI), Ted Cruz (R-TX), Rand Paul (R-KY) and Mike Lee (R-UT).
Moderate GOP senators concerned about Medicaid were studying the bill and
waiting for the Congressional Budget Office score. Two GOP governors,
Kasich of Ohio and Sandoval of Nevada, in separate statements said they
were deeply concerned about the Medicaid portion of the bill. Sandoval made
clear he was in touch with Senator Dean Heller (R-NV), considered by some
to be the most vulnerable Republican senator up for re-election because
Nevada went for Clinton in the presidential race and the state has expanded
The necessary number for passage under reconciliation rules is 51.
McConnell can only afford to lose two from his caucus and the vice
president would vote to break the tie. It is expected that the bill will
have some changes made before it hits the floor of the Senate to address
concerns of some senators who are on the fence. However, key to some will
be the Congressional Budget Office score, which will likely be released
What does the bill do? Below is the legislation in a nutshell—but the bill
Medicaid expansion will stay as is under the Affordable Care Act for
three years, then a three-year phasedown of the enhanced funding will
States can choose their base years for per-capita caps based on eight
consecutive quarters from first quarter of 2014 through second quarter
of 2017. The annual inflator of the caps will remain at the House level
until 2025, and then will be reduced to the urban consumer price index.
Disabled kids will be carved out of the caps.
The House block grant option for states remains on the table, but
children, the elderly and the disabled would not be included under the
States that “underspend” within their caps will receive bonus “quality
States that didn’t expand Medicaid don’t hit the per-person national
average for disproportionate share hospital payments will get a funding
bump so that they hit the national average.
The House state innovation fund for nonexpansion states will stay.
Medicaid provider taxes will be cut by 0.1 percent every year, ending
The so-called “IMD exclusion” is amended to allow for opioid treatment
for 30 days, but not to exceed 90 days within a calendar year.
Cost-sharing reduction payments to insurers on the state exchanges will
be funded through 2019.
- Congress will fund short-term reinsurance pools for four years: $15
billion in 2018 and 2019; $10 billion in 2020 and 2021.
- Long-term funding for states will be flexible, but a percentage must be
used for reinsurance, and will be distributed from 2019 through 2026: $8
billion in 2019; $14 billion in 2020 and 2021; $6 billion in 2022 and 2023;
$5 billion in 2024 and 2025; and $4 billion in 2026.
- States will have to spend their money within three years, or their
appropriation will be redistributed to other states that need it.
The Senate language will codify a $2 billion incentive for states to
use 1332 waivers to redesign their insurance markets. This approach
gets around the controversial MacArthur amendment from the House.
States will be able to waive essential health benefits and subsidies
off the exchanges, but by using 1332 waivers instead.
ACA subsidies will remain in play for 2018 and 2019.
The GOP-proposed tax credits will be targeted toward low-income and the
Starting in 2020, people from 0-350 percent of poverty level will be
eligible for an advanceable, refundable tax credit unless they are
eligible for Medicaid.
No affordability test, so an employer offer will be counted as
The benchmark for the credits is 58 percent actuarial value of
qualified health plans with essential health benefits.
- A one-year defunding of Planned Parenthood
- Wipes out the Prevention Fund
For more detail see the
section by section
prepared by the Senate GOP staff.
HHS Pays CSRS for June
The Department of Health and Human Services (HHS) has paid insurers the
ACA’s cost-sharing reduction payments for June, but is still deciding
whether to make the payments going forward. Insurers were to file rates by
June 21 for next year.
Both Senator Lamar Alexander (R-TN), chairman of the Health Education,
Labor and Pensions Committee, and Rep. Kevin Brady (R-TX), chairman of the
Ways and Means Committee, have called for the payments to be made. In
addition, Sen. Ron Johnson (R-WI) has called for Congress to pass a
short-term market stabilization bill before moving forward with larger
health reform legislation. Former House Speaker Newt Gingrich penned an
op-ed calling for the same.
ONC Seeking Hospitals to Participate in Measure Development Feedback Opportunity
The Office of the National Coordinator for Health Information Technology
(ONC) is currently looking for hospitals to help this summer with initial
qualitative testing activities of their health information technology
The measure is focused on reducing potentially inappropriate duplicate
orders for medications, laboratory tests, radiological exams and
To assist with this activity, contact Emily Newton at
FDA to Create a Plan at Lowering Costs and Improving Trial Designs
In testimony before the Senate Appropriations Committee on June 20, FDA
Administrator Scott Gottlieb announced that the agency will create a
“Medical Innovation Development Plan” aimed at lowering health care costs
by facilitating development of drugs to treat costly rare diseases through
improved adaptive trial designs and statistical tools. The Biotechnology
Innovation Organization said Gottlieb’s commitment to streamline clinical
trials would improve outcomes and lower costs, but Public Citizen said the
plan would lower the evidentiary standard for drug approvals and pose new
risks to consumers.
Gottlieb also said FDA is working to clear a backlog of approximately 200
pending orphan drug designation requests within 90 days, and committed to
reviewing any new request within 90 days as part of the new plan.
Gottlieb told Senate appropriators that the upcoming innovation plan will
reduce health care costs by incentivizing development of new drugs for
costly diseases. The plan will “include a broad range of steps we’ll take
to make sure that our own regulatory tools and policies are modern and
risk-based and designed to facilitate the development of potentially
breakthrough new treatments.”
While the innovation plan appears more geared toward brand products, the
FDA administrator told House appropriators last month that FDA would also
create a drug competition plan with a focus of getting more generic drugs
FDA Issues Draft Guidance to Speed Some Generic Drug Applications
FDA issued draft guidance last week that sets up a new presubmission
process for certain generic drug applications. FDA Administrator Scott
Gottlieb says this process could cut two months off review times and
increase access to affordable drugs.
Under the draft guidance, applicants submitting a presubmission facility
correspondence (PFC) containing manufacturing and bioequivalence facility
information may be awarded priority review. The PFC will help FDA determine
whether facility inspections are necessary and potentially shorten the
“If ANDA applicant sends FDA Pre-Submission Facility Correspondence 2
months prior to ANDA submission, then ANDA can obtain priority review,”
Gottlieb tweeted. “Priority review means 8 month review goal. Standard
review is 10 months. Faster review of priority ANDAs expands access to
Supreme Court Rules to Limit “Forum Shopping” by Patients
The U.S. Supreme Court ruled on June 19 for Bristol-Myers Squibb’s effort
to limit where patients can sue to seek compensation for harm caused by
drugs. The justices ruled, 8-1, in a case that pitted Bristol-Meyers Squibb
against the state of California. The questions in the case centered around
whether plaintiffs residing outside California who claim they were harmed
by the company’s blood thinner Plavix could join in a lawsuit in
California brought by California residents against the New York-based
company. The out-of-state residents didn’t buy the drug or take it in
California, and the product wasn’t manufactured in the state. California is
thought to be a particularly friendly state for injured plaintiffs.
“The mere fact that other plaintiffs were prescribed, obtained, and
ingested Plavix in California—and allegedly sustained the same injuries as
did the non-residents—does not allow the State to assert specific
jurisdiction over the nonresidents’ claims,”
Justice Samuel Alito in the court’s opinion.
4. State Activities
California: Bill Allowing “Safe Space” for Injections to Be Heard in State Legislature
A bill designed to help reduce overdose deaths could make California the
first state where intravenous drug users could have a “safe space” for
injections. Coming up for a key committee vote in the state Legislature,
A.B. 186 would authorize eight California counties—Alameda, Fresno,
Humboldt, Los Angeles, Mendocino, San Francisco, San Joaquin and Santa
Cruz—to pilot these so-called safe injection sites. Drug use supervised by
health care professionals would be allowed on site. The bill is slated to
be heard in the state Senate health committee on July 5. A similar bill
died in committee last year.
Ohio: Republican Senators Want a Freeze on Medicaid Expansion Enrollment
Republicans in the Ohio Senate want to freeze Medicaid expansion enrollment
starting in July 2018. The provision made it into the state budget the Ohio
Senate approved earlier this week. Lawmakers must resolve the issue by June
30, when Ohio’s current fiscal year ends and the Legislature has to pass a
new budget. Kasich has not stated his position on the enrollment freeze but
continues to advocate for preserving Medicaid expansion, which covers
roughly 700,000 people in Ohio.
5. Regulations Open for Comment
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 Publishes Post-Acute Care Proposed Rules
On May 11, CMS published the following proposed rules:
CMS Issues Proposed Revision Requirements for Long-Term Care
Facilities’ Arbitration Agreements
On June 5, CMS issued proposed revisions to arbitration agreement
requirements for long-term care facilities. The proposed revisions would
help strengthen transparency in the arbitration process, reduce unnecessary
provider burden and support residents’ rights to make informed decisions
about important aspects of their health care.
The Reform of Requirements for Long-Term Care Facilities Final Rule,
published on Oct. 4, 2016, listed the requirements facilities need to
follow if they choose to ask residents to sign agreements for binding
arbitration. The final rule also prohibited predispute agreements for
binding arbitration. The American Health Care Association and a group of
nursing homes sued for preliminary and permanent injunction to stop CMS
from enforcing that requirement. The court granted a preliminary injunction
on Nov. 7, 2016. After that decision, CMS reviewed and reconsidered the
arbitration requirements in the 2016 Final Rule.
The proposed rule focuses on the transparency surrounding the arbitration
process and includes the following proposals:
The prohibition on predispute binding arbitration agreements is
All agreements for binding arbitration must be in plain language.
If signing the agreement for binding arbitration is a condition of
admission into the facility, the language of the agreement must be in
plain writing and in the admissions contract.
The agreement must be explained to the resident and his or her
representative in a form and manner they understand, including that it
must be in a language they understand.
The resident must acknowledge that he or she understands the agreement.
The agreement must not contain any language that prohibits or
discourages the resident or anyone else from communicating with
federal, state or local officials, including federal and state
surveyors, other federal or state health department employees, or
representatives of the State Long-Term Care Ombudsman.
If a facility resolves a dispute with a resident through arbitration,
it must retain a copy of the signed agreement for binding arbitration
and the arbitrator’s final decision so it can be inspected by CMS or
The facility must post a notice regarding its use of binding
arbitration in an area that is visible to both residents and visitors.
This proposed rule is scheduled to be published in the Federal Register on June 8, 2017, and comments are due by Aug. 7,
2017. For more information,
CMS Proposes MACRA Rule
On June 19, CMS issued a
that would make changes in the second year of the Quality Payment Program
as required by the Medicare Access and CHIP Reauthorization Act of 2015
The 1,058-page rule continues the “pick-your-pace” option in year two of
the program, letting doctors report a limited amount of quality data to be
exempted from Medicare’s penalties.
CMS creates a “virtual group” reporting option, allowing doctors to pool
the information on how they care for patients and be subjected to
Medicare’s quality payment scheme.
CMS is also increasing the minimum number of patients doctors can treat
before being subject to the program’s Merit-based Incentive Payment System.
It establishes more flexibility for doctors who see limited numbers of
patients face to face or in a hospital. For 2017, roughly 800,000
clinicians were exempt from the MIPS program.
CMS will not require doctors to use 2015 certified EHRs next year, as it
had ordered during the Obama administration. However, clinicians are
offered bonuses for using new versions of the software. Medicare also will
delay for another year judging doctors for how much they spend for treating
Comments on the rule are due no later than 5 p.m. on Aug. 21, 2017. For a
fact sheet on the proposed rule,
GAO: VA Needs Improved Management Processes for IT Systems That Support Health Care
In a new report, GAO found that the Department of Veterans Affairs (VA) has
established information technology (IT) management processes that are
partially consistent with leading practices.
VA has issued strategic plans that identify goals and objectives related to
health IT; established investment review boards at the department level and
within the Veterans Health Administration (VHA) that are responsible for
selecting IT investments aligned to VHA priorities; and documented VHA’s
core business functions within an enterprise architecture. However, the IT
strategic plans do not include performance measures and targets for their
defined objectives, VA’s department-level IT investment board has been
inactive and its investment selection guidance lacks criteria, and the
department has not fully identified metrics aligned to core business
functions to inform investment decisions. The VA risks having IT systems
that may not fully support VHA’s mission until it can improve these
processes, GAO found.
To read the report,
If you have any questions, contact the following individuals at
Kennan, Senior Vice President
Caroline Perrin, Research Assistant
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