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Aug 28, 2017

Washington Healthcare Update

This Week: HELP committee prepares for hearings on market stabilization. President signs FDA user fee bill. Congress asks more questions on many drug issues.

Due to Labor Day, the next newsletter will be Sept. 11. Happy Labor Day!

1. Congress



2. Administration

3. Regulations Open for Comment

1. Congress


Reps. Cummings and Welch Ask Questions on MS Drug Prices

On Aug. 17, Reps. Peter Welch (D-VT) and Elijah Cummings (D-MD) sent letters to seven drug companies in an effort to gather information on profits and sales of drugs for multiple sclerosis (MS). The companies are: Bayer, Biogen, EMD Serono, Novartis, Roche, Sanofi’s Genzyme unit and Teva Pharmaceuticals. The representatives are also seeking any analysis the corporations have on pricing strategies for these drugs, documents that attempt to extend patent life and contracts with wholesalers, insurers and pharmacy benefit managers. MS drug sales doubled from 2008 to 2012, jumping to roughly $9 billion. The lawmakers also cite the annual cost per patient was $60,000 in 2015. The letters request information be delivered by Aug. 31.

To view the press release and all letters delivered, click here.


Senators Urge Removal of Menthol Cigarettes

On Aug. 22, a group of eight senators led by Sen. Ed Markey (D-MA) sent a letter to FDA Commissioner Gottlieb calling for the removal of menthol cigarettes, as they serve as a “starter product” for younger Americans and target African American communities. The letter requests information on the FDA’s trajectory to address menthol cigarettes since the Advanced Notice of Proposed Rulemaking in 2013 suggested menthol cigarettes present a public health risk. The letter further questions why the FDA hasn’t finalized action to remove menthol.

To view the letter, click here.

HELP Committee to Hold Hearings on Marketplace Stability

On Aug. 22, the Senate Committee on Health, Education, Labor, and Pensions announced it will hold two hearings in September on marketplace stability. Committee Chairman Lamar Alexander (R-TN) stated “we will hear testimony from state insurance commissioners and governors—those closest to the problem—on steps Congress can take to make insurance available at affordable prices. Any solution that Congress passes for a 2018 stabilization package will have to be small, bipartisan and balanced. It should give states more flexibility in approving insurance policies by improving section 1332 of the Affordable Care Act as well as fund the cost-sharing reduction payments to help stabilize premiums for 2018.”

Ranking Member Patty Murray (D-WA) stated, “I’m pleased to announce with Chairman Alexander that our first two bipartisan hearings in the HELP Committee will be dedicated to hearing from state insurance commissioners and governors from across the country. These state leaders understand full well the challenges facing health care today and many have been outspoken about how the uncertainty caused by this Administration has impacted the individual insurance market and therefore families’ premiums for 2018.”

The first hearing will be held on Sept. 6 and is entitled “Stabilizing Premiums and Helping Individuals in the Individual Insurance Market for 2018: State Insurance Commissioners,” at 10 a.m. in SD-430.

The second hearing will be held on Sept. 7 and is entitled “Stabilizing Premiums and Helping Individuals in the Individual Insurance Market for 2018: Governors,” at 9 a.m. in SD-430.

For more information on these hearings, click here.

Democratic Senator Asks FTC to Tackle Drug Shortages

On Aug. 23, Sen. Richard Blumenthal (D-CT) wrote the current acting chairmen of the FTC asking questions about whether the FTC is doing enough to ensure consumers are protected against drug shortages due to pharmaceutical company mergers. Following the 2015 merger of Pfizer and Hospira, there were several shortages and the practice of merging has become more common in the pharmaceutical industry. Specifically, Sen. Blumenthal asked about FTC authority to require safeguards against potential drug shortages as a part of a merger agreement and whether the FTC has a policy to consult with the FDA.

To view the letter, click here.

2. Administration

Federal Appeals Court Orders Lower Court to Look at HHS Claims in Medicare Appeals Backlog Case

On Aug. 16, the federal appeals court for Washington, D.C., said a lower court needs to look closer at the U.S. Department of Health and Human Services’s (HHS) claim that it would be impossible for the agency to lawfully reduce the Medicare appeals backlog at the administrative law judge level by 2021, though the court said the burden should fall on HHS to prove that is so once the case goes back to the district court.

This decision is a continuation of the American Hospital Association suit against HHS over the appeals backlog because decisions at the ALJ level were not turned around within 90 days as required by statute. This is the second time the appeals court has looked at the case and sent it back to the district court: first, the AHA appealed a dismissal of the case and the court decided in the hospital’s favor; then, when the district court laid out a timetable to eliminate the backlog of Medicare appeals at the third level of the process, HHS appealed. The appeals court vacated the timetable laid out by the district court and again sent the case back to the district court to “evaluate the merits of the Secretary’s claim that lawful compliance would be impossible.”

The majority on the appeals court said the district court can’t give relief to hospitals without responding to HHS’s claims that lawful compliance with the timetable is impossible. HHS had argued that the mandate would compromise the Medicare trust fund by forcing CMS to pay claims that may have been appropriately denied just to empty the appeals queue. However, the appeals court also chastised HHS for not explaining how it will fix the problem.

CMS Releases Hospice Compare Website to Improve Consumer Experiences, Empower Patients

On Aug. 16, CMS released the Hospice Compare website as authorized by Section 1814(i)(5) of the Social Security Act for quality reporting programs for hospices. The act requires that hospice providers report data on quality measure through notice and comment rulemaking. The goal of the website is to provide consumer information on quality of care provided. The Hospice Quality Reporting Program (HQRP) includes data from Hospice Item Set (HIS) and Hospice Consumer Assessment of Healthcare Providers and Systems (Hospice CAHPS®).

To access the website, click here.

CMS Reduces Mandatory Participation in Comprehensive Care for Joint Replacement Demonstration and Cancels Cardiac Rehab Payment Models

On Aug. 15, CMS released a rule that proposes reducing by half the number of geographic areas that participate in the currently mandatory Comprehensive Care for Joint Replacement. The rule will also make the model voluntary for the remaining areas, and proposed canceling the Episode Payment Models and Cardiac Rehabilitation Incentive Payment Models. Making the hip and knee programs voluntary for certain providers will decrease participating hospitals by almost half and have a cost savings of $90 million.

By canceling both cardiac care bundles and episode payment models, CMS will have more flexibility to test other innovations. CMS noted in the proposed rule that “review and reevaluation of policies and programs, as well as revised rulemaking are within an agency’s discretion, and that discretion is often exercised after a change in administration occurs.” CMS also said it considered changing the design of the episode payment models and bundles to make them voluntary, but due to time constraints is unable to do so.

To read the proposed rule, click here.

FDA Pediatric Advisory Committee to Hold Product-Specific Discussion Around Drugs and Devices for Children

On Aug. 21, the FDA announced the Pediatric Advisory Committee will overview the benefits and safeguards of using opioid products to treat cough in children. This examination will take place as part of a two-day meeting on Sept. 11 and 12 that will include discussion on other pediatric drugs. The committee will also look at opioids that contain hydrocodone or codeine to treat cough and will hold product-specific discussions on drugs and devices as mandated by the Best Pharmaceuticals for Children Act and the Pediatric Research Equity Act. The panel is also scheduled to discuss CDRH-approved devices including Contegra pulmonary valved conduits, the Enterra therapy system, the Pleximmune test and the Elana Surgical Kit.

To view the 2017 Advisory Committee tentative meetings schedule, click here.

Trump Signs FDA Bill

On Aug. 18, President Donald Trump signed the FDA Reauthorization Act of 2017, H.R. 2430. The law is a disappointment to lawmakers who had higher hopes for the bipartisan healthcare bill that helps pay for hundreds of FDA jobs and starts the process on drug pricing, as the administration had wanted the drug and device companies to pay more in user fees.

To view the language of the new law, click here.

Opioid Emergency Left Hanging

Earlier this summer, President Trump’s opioid commission recommended the president declare a national emergency on the opioid epidemic, followed by the president announcing his intention. Nevertheless, the official declaration has yet to be made, leaving state health officials unsure of next steps. The details of this are laid out in the Public Health Service Act or in the Stafford Act. This declaration has potential to increase federal personnel to help states, fast track funding and facilitate access to supplies and drugs through the National Strategic Stockpile. This would potentially include the overdose reversal agent naloxone or medication-assisted therapies for misuse. A declaration would also give HHS Secretary Tom Price the ability to provide flexibility for granting state waivers to move patients to programs such as Medicaid or CHIP. Currently, six states have declared an opioid emergency, yet without a federal declaration, access to resources is limited.

To view the Public Health Service Act, click here.

To view the Stafford Act, click here.

CMS Advisory Panel Recommended Dropping 340B Proposal

On Aug. 21, the CMS Advisory Panel on Hospital Outpatient Payment suggested that CMS prepare a proposal to cut Medicare reimbursement for drugs that are purchased through the 340B program. CMS has estimated that the proposal would lead to a $900 million cut, but would be implemented to be budget-neutral. CMS has also estimated that the redistribution of cash would increase outpatient payments by 1.4 percent. The panel also recommended CMS not finalize the policy but gather comments and sources about its impact. The rules on outpatient hospitals are due in the beginning of September.

3. Regulations Open for Comment

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.

CMS Proposes 2018 Policy and Rate Changes for Hospital Outpatient, Ambulatory Surgical Center Payment Systems

The Centers for Medicare & Medicaid Services (CMS) on July 13, issued a proposed rule that updates payment rates and policy changes in the Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System.

Among the provisions in this rule, CMS is proposing to change the payment rate for certain Medicare Part B drugs purchased by hospitals through the 340B program. The proposed rule also requests comment on how CMS can best implement the proposal to pass savings on to beneficiaries and providers, and to allow seniors to save money on their drug costs. The 340B Drug Pricing Program allows certain hospitals and other health care providers to purchase drugs and biologicals (other than vaccines) that are administered in a hospital outpatient department from drug manufacturers at discounted prices.

The proposed rule also includes a provision to address rural hospitals recruiting physicians by placing a two-year moratorium on the direct supervision requirement currently in place at rural hospitals and critical access hospitals.

In addition, CMS is releasing within the proposed rule a request for information to welcome continued feedback on flexibilities and efficiencies in the Medicare program.

Comments are due 5 p.m. Sept. 11, 2017.

To view a fact sheet on the proposed rule, click here.

To view the proposed rule, click here .

CMS Proposes 2018 Payment and Policy Updates for the Physician Fee Schedule

The Centers for Medicare & Medicaid Services (CMS) on July 13 issued a proposed rule that would update Medicare payment and policies for doctors and other clinicians who treat Medicare patients in calendar year (CY) 2018. This proposed rule seeks public comment on reducing administrative burdens for providing patient care, including visits, care management and telehealth services. The rule takes steps to better align incentives and provide clinicians with a smoother transition to the new Merit-based Incentive Payment System under the Quality Payment Program (QPP). The rule also attempts to encourage fairer competition between hospitals and physician practices by promoting greater payment alignment, and it would improve the payment for office-based behavioral health services that are often the therapy and counseling services used to treat opioid addiction and other substance use disorders. In addition, the proposed rule makes additional proposals to implement the Center for Medicare & Medicaid Innovation’s Medicare Diabetes Prevention Program expanded model starting in 2018.

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. This will inform the discussion on future regulatory action related to the Physician Fee Schedule.

Comments are due by 5 p.m. on Sept. 11, 2017.

For a fact sheet on the proposed rule, click here.

To view the proposed rule, click here.

CMS Proposes 2018 and 2019 Payment Changes for Medicare Home Health Agencies

The Centers for Medicare & Medicaid Services (CMS) on July 25 issued a proposed rule that would update payment rates and the wage index for home health agencies (HHAs) serving Medicare beneficiaries in 2018; it also proposes a redesign of the payment system in 2019. Comments are due Sept. 25, 2017.

CMS is planning a slight pay cut for home health agencies in 2018, by reducing Medicare payments to the agencies by 0.4 percent next year, saving the federal government an estimated $80 million. That change is driven in part by CMS’s planned phase out of a provision boosting pay rates for certain home health services delivered to rural patients. The agency is also floating a series of changes to the payment methodology beginning in 2019, which could result in a pay cut of up to 4.3 percent. That would translate to as much as $950 million in reduced Medicare payments to home health agencies.

Under the proposed rule, the home health payment update percentage for HHAs that submit the required quality data for the Home Health Quality Reporting Program would be 1 percent in 2018. The proposed rule also includes proposals to refine the HH PPS case-mix adjustment methodology, including a change in the unit of payment from 60-day episodes of care to 30-day periods of care, to be implemented for periods of care beginning on or after Jan. 1, 2019. Additionally, the proposed rule includes proposals for the Home Health Value-Based Purchasing Model and the Home Health Quality Reporting Program.

To view the proposed rule, click here.

For more information on the Home Health Prospective Payment System, 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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