Jul 3, 2017
Washington Healthcare Update
This Week: By Oct. 1, federal funding runs out, the Children’s Health
Insurance Program needs to be renewed and the FDA user fee legislation needs to
be reauthorized (or the FDA has to lay off staff). Were you looking for repeal
and replace legislation? So is the Senate.
Because Congress will be in recess for the Fourth of July, the next
newsletter will be July 17. Happy Fourth of July!
3. Regulations Open for Comment
House Appropriations Subcommittee Moves FY 2018 Spending Bill
The House Appropriations Subcommittee for Agriculture, Rural Development,
Food and Drug Administration (FDA), and Related Agencies released their
spending bill for the 2018 fiscal year. The bill increases spending for
FDA, appropriating $5.1 billion, an increase from FY 2017. Included in the
bill are riders that target the FDA’s regulation of tobacco products like
electronic cigarettes and premium cigars. Riders would slow down the FDA’s
regulation of these products. A markup has not been scheduled for this
The bill can be found
House Passes Bill to Address Malpractice Awards
On June 28, the House passed
H.R.1215, a bill that would cap at $250,000 the amount of damages of medical
malpractice lawsuits that involve government-subsidized health care. The
bill narrowly passed through the chamber by a vote of 218 to 210, with many
conservatives and Democrats opposing it. Conservatives raised issues of
federalism and preemption of states’ rights.
The bill’s language can be found
House to Vote on FDA User Fees in July
Following the July 4th recess, the House hopes to vote on the FDA user fee
package. The Senate Health, Education, Labor and Pensions Committee and the
House Energy & Commerce Committee have been working together to marry
the bills in order to get a vote. Should reauthorization not happen before
the end of July, the FDA will have to lay off employees.
Senate Postpones Repeal and Replace Vote
The Senate Republican Leadership faces a tough road to get a repeal and
replace bill launched. After much anticipation, the Congressional Budget
Office released its score of the
Better Health Care Reconciliation Act. It rapidly became clear that conservatives and moderates both had
significant issues with the bill, and a number of them would not vote for
the motion to proceed, a procedural measure needed to begin debate on the
floor of the Senate. It was also clear that simply “tweaking” provisions of
the bill would not be enough to bring 50 Republican senators along to
support the legislation.
On June 27, Senate Majority Leader Mitch McConnell announced that he was
going to postpone the vote until after the Fourth of July recess. Senate
Republicans spent the rest of the week shuttling to and from the majority
leader’s office in the hopes of changes to the bill that would be
The bill has roughly five areas that could be changed.
- Medicaid: The Senate health bill would gut Medicaid by rolling
back the Affordable Care Act’s expanded coverage and reducing its funding
by $772 billion over 10 years.
- Subsidies: The current bill scales back the Affordable Care
Act’s subsidies and cuts off eligibility at 350 percent of the federal
poverty line (compared with the ACA’s 400 percent threshold). The
restructuring disproportionately benefits younger and healthier enrollees.
- Leaving too much of the ACA structure/rolling back regulations:
Conservatives were concerned that the legislation did not do enough to
repeal the Affordable Care Act’s structure or roll back regulations
- Planned Parenthood: The legislation would “defund” Planned
Parenthood for a year. Both Senators Murkowski and Collins were concerned
that this would reduce access for women to health care services. Senators
Murkowski and Collins had drafted an amendment related to this.
- Sweeteners: The Senate bill achieves more in savings toward
deficit reduction than it needs to, therefore, funds can be added back in
for such items as opioid treatment, or into tax credits to reduce the
burden of particularly expensive insurance markets, or other requests of
By the end of the week it was clear that as the majority leader moved to
address the concerns of one group, it opened up other divides. For example,
one proposal now being considered is to maintain the net investment tax and
use those funds toward making health care affordable for low-income
individuals. For some conservatives, not repealing this tax is a deal
breaker. That proposal along with two others were sent to the Congressional
Budget Office (CBO) to be scored. The other two provisions are a proposal
to expand health savings accounts and to add $45 billion to the bill for
CBO will use the week to score the proposal. When members return they will
regroup. However, the Senate has only 13 legislative days before the August
recess. Congress has other pressing issues including funding the government
for the next fiscal year, CHIP renewal and FDA User Fee Reauthorization to
address in September.
FDA Submits Nutrition Facts Label Rule to OMB
Following the announcement earlier this month to push back the compliance
deadline for regulations updating nutrition facts and serving sizes, the
FDA formally filed an extension of compliance to the White House OMB. The
FDA did not give a timeline for when it would be officially in compliance.
The formal submission from the FDA can be found here.
The earlier announcement can be found
FDA Releases Orphan Drug Modernization Plan
The FDA has released the Orphan Drug Modernization Plan that looks to
review all orphan drug designations in the past 120 days and aims to
respond to new requests in 90 days by establishing a special SWAT team.
Following this addition, the FDA will additionally put an Orphan Drugs
Council in place.
The press release for the plan can be found
The Orphan Drug Modernization Plan can be found
President Nominates Surgeon General
On June 29 President Trump nominated Jerome Adams to be the next surgeon
general. Previously, Adams served as state health commissioner appointed by
then-Governor Mike Pence and was also on the board of the Indiana
University School of Medicine. Adams is a trained anesthesiologist.
The press release can be found
3. Regulations Open for Comment
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,
CMS Proposes 2018 Policy and Payment Rate Changes for End-Stage Renal
On June 29, the Centers for Medicare & Medicaid Services (CMS) issued a
proposed rule that would update payment policies for the End-Stage Renal
Disease (ESRD) Prospective Payment System (PPS). The rule covers payment
rates for renal dialysis services, including updates to acute kidney injury
(AKI), furnished to beneficiaries on or after Jan. 1, 2018.
The ESRD Quality Incentive Program (QIP) proposed changes are for payment
years 2019, 2020 and 2021, and a number of key dialysis data methodologies
and quality measures. The proposed rule also requests comment on how to
include individuals with acute kidney injury in the ESRD Quality
In addition to the proposed rule, CMS is releasing a request for
information to welcome continued feedback on the Medicare program. CMS is
committed to maintaining flexibility and efficiency throughout Medicare.
Through transparency, flexibility, program simplification and innovation,
CMS aims to transform the Medicare program and promote the availability of
high-value and efficiently provided care for its beneficiaries.
Comments are due no later than 5 p.m. on Aug. 28, 2017.
For a fact sheet on the proposed rule, please click
For the ESRD proposed rule (CMS 1674-P), please click here.
Generic Drug User Fees: Application Review Times Declined, But FDA
Should Develop a Plan for Administering Its Unobligated User Fees
A new GAO report found that nearly 90 percent of the prescription drugs
dispensed in the United States are generics. The FDA must approve these
drugs before they are marketed.
In 2012, a law allowed FDA to collect fees from drug manufacturers to
support the review process. FDA committed to improving its process and
meeting specific performance goals such as decreasing review times.
GAO found that FDA’s reliance on user fees increased and that it surpassed
many of its performance goals. However, GAO recommended that FDA make a
plan for the fees it does not spend in the same year they are collected.
To read the report,
Physician Workforce: Locations and Types of Graduate Training Were
Largely Unchanged, and Federal Efforts May Not Be Sufficient to Meet
In a recently released GAO report, the GAO found that, from 2005-2015, the
types and locations of residents generally remained unchanged, but there
was growth in certain areas. Residents were concentrated in the Northeast
and in urban areas. And, while many trained in primary care, primary care
residents often subspecialize in other fields. Federal efforts to increase
graduate medical education (GME) in rural areas and primary care were
limited. In 2015, the GAO had recommended HHS develop a plan for its health
care workforce programs—it has yet to do so.
The GAO also projects a deficit of over 20,000 primary care physicians by
2025. Residents in GME affect the supply of physicians. Federal GME
spending is over $15 billion/year.
To read the report,
If you have any questions, contact the following individuals at
Kennan, Senior Vice President
Anne Starke, Research Associate
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