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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!

1. Congress



2. Administration

3. Regulations Open for Comment

4. Reports

1. Congress


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 measure yet.

The bill can be found here.

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 here.

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 acceptable.

The bill has roughly five areas that could be changed.

  1. 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.
  2. 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.
  3. 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 implementing it.
  4. 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.
  5. 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 senators.

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 opioid treatment.

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.

2. Administration

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 here.

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 here.

The Orphan Drug Modernization Plan can be found here.

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 here.

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 removed.
  • 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 its designee.
  • 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, click here.

CMS Proposes MACRA Rule

On June 19, CMS issued a proposed rule 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 (MACRA).

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 patients.

Comments on the rule are due no later than 5 p.m. on Aug. 21, 2017. For a fact sheet on the proposed rule, click here.

CMS Proposes 2018 Policy and Payment Rate Changes for End-Stage Renal Disease Facilities

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 Improvement Program.

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 here.

For the ESRD proposed rule (CMS 1674-P), please click here.

4. Reports

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, click here.

Physician Workforce: Locations and Types of Graduate Training Were Largely Unchanged, and Federal Efforts May Not Be Sufficient to Meet Needs

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, click here.

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

Stephanie Kennan, Senior Vice President
Anne Starke, Research Associate

Founded in 1998, McGuireWoods Consulting LLC (MWC) is a full-service public affairs firm offering infrastructure and economic development, strategic communications & grassroots, and government relations services. McGuireWoods Consulting is a subsidiary of the McGuireWoods LLP law firm and has been named in The National Law Journal's special annual report, "The Influence 50," for the past several years. In the most recent report, McGuireWoods Consulting was ranked 15th of the 1,900 government relations firms in Washington, D.C.

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