Feb 12, 2018

Washington Healthcare Update

This Week: Budget Deal passes … Everyone looking at the Opioid Crisis … President’s budget to arrive Feb. 12 … Assisted living in Medicaid subject of GAO report …

Budget Deal Includes Extenders

In the early morning hours of Feb. 9, technically after the government funding had run out at midnight, Congress passed a two-year budget deal. The legislation funds the government through March 23, at which time it is expected the Congress will flesh out the details of the appropriations needed for the two-year budget and pass an omnibus bill. In addition, the debt ceiling was raised, avoiding another legislative crisis later this year. 

The legislation included a number of health care provisions. 

  • $6 billion in funding for treatment of mental health issues and opioid addiction.
  • $2 billion in extra funding for the National Institutes of Health.
  • An additional four-year extension of the Children’s Health Insurance Program, which builds on the six years approved by Congress last month.
  • Repeal of the Medicare Independent Payment Advisory Board, which had never been staffed and whose function has never been used because Medicare spending had not triggered it.
  • Accelerated the closing of the Medicare Part D “donut hole.”
  • Included the Medicare “extenders” package—narrow health policies that are often included in larger legislative packages. 
  • Created a permanent fix for the issue of therapy caps and the exceptions process by repealing the limit on Medicare’s coverage of physical, speech-language treatment and outpatient therapy. Repeal scheduled disproportionate share payment reductions. 
  • Funding for community health centers.
  • Funded for five years the Maternal, Infant and Early Childhood Home Visiting Program, a program that helps guide low-income, at-risk mothers in parenting. It served about 160,000 families in fiscal year 2016.

Health care offsets used to pay for the bill include increasing premiums for wealthy Medicare beneficiaries, requiring drug companies to pay more in Medicare coverage, cutting Medicare payments to home health agencies by 1 percent and reducing the Prevention and Public Health Fund.

1. Congress



2. Administration

3. Reports

1. Congress


Menu Labeling Passes House

On Feb. 6, the House of Representatives passed the Common Sense Nutrition Disclosure Act, HR 722, which loosens menu-labeling requirements on grocery stores and chain restaurants, in a 266 to 157 vote. The FDA’s menu-labeling requirements are scheduled to take effect in May after years of delay. The legislation stills needs to be considered in the Senate. The legislation would change how businesses have to present calorie labels for various foods. It would also limit liability for businesses.

Consumer advocates are opposed to the legislation, arguing that businesses have had more than enough time to prepare for the labeling requirements, which Congress called for in 2010 as part of the Affordable Care Act.

More Hearings on Opioids

The Ways & Means Committee held a hearing Feb. 6 on the opioid crisis in Medicare. Both Ways & Means and Energy & Commerce each announced their own series of hearings on the epidemic in the coming months. To see the Ways and Means hearing

In addition, Democratic House committee leaders are asking insurers for their plans to fight the opioid epidemic, as well. House Ways & Means ranking Democrat Richard Neal (MA) and Energy & Commerce ranking Democrat Frank Pallone (NJ) sent a letter to 14 insurers on Friday (Feb. 2) asking how to deal with the opioid epidemic, particularly in Medicare. They also asked about the growth in Part D opioid spending. They say the impact of the opioid epidemic in Medicare is often overlooked. For example, Part D spending on opioids grew 165 percent from 2006 to 2015, outpacing enrollment.

Pallone and Neal asked insurers to respond, and to include input on potential legislative or regulatory actions to stem the crisis, by Feb. 21.

The President’s Health Budget

President Donald Trump’s budget comes out on Feb. 12, and new HHS Secretary Alex Azar will testify about his department’s request before the House Energy and Commerce Health Subcommittee on Feb. 15.


Finance Committee Asks for Input on Opioid Crisis

Senate Finance Committee Chair Orrin Hatch (R-UT) and ranking Democrat Ron Wyden (OR) are requesting Medicare and Medicaid policy advice for handling the opioid crisis. The letter asks for input, keeping in mind the committee’s jurisdiction, fiscally responsibility and the need to generate bipartisan support. Hatch and Wyden noted high Part D spending on opioids. They added that Medicaid covers three out of 10 people who abuse opioids, and that the program spent $9 billion on services for those with opioid use disorder in 2015. The deadline for responding is Feb. 16, and responses will be publicly posted on the committee’s website. To see the letter

Senate Aging Committee Holds Hearing on Rheumatoid Arthritis Biologics

The Senate Aging Committee held a hearing on RA Biologics Feb. 7. Chair Susan Collins (R-ME) raised concerns  over price hikes associated with two best-selling drugs, both of which treat rheumatoid arthritis (RA), as well as the patent issues that have kept lower-price competitors off the market.

Collins also promised to raise with CMS her concerns about its existing policy that incentivizes patients that are steady on a self-administered drug when covered by private insurance to switch to a physician-administered drug when transitioning to Medicare.

While committee members did little by way of promising policy changes, witnesses at Wednesday’s panel pitched a number of potential fixes to rising prices of RA drugs, including: a policy slate endorsed by the Medicare Payment Advisory Commission (MedPAC), pharmacy benefit manager (PBM) transparency, mandatory standardization of the prior authorization process and the Patients’ Access to Treatments Act, which would establish cost-sharing limits for drug plans and would bar imposing higher cost sharing for specialty drugs than for other drugs in a non-preferred tier.

2. Administration

White House Releases Ideas for Reducing Drug Prices

The White House Council of Economic Advisers (CEA) released a report on Feb. 9 that lists ideas they argue could reduce U.S. drug prices while simultaneously increasing innovation.

The report, “Reforming Biopharmaceutical Pricing at Home and Abroad,” includes possible changes to nearly all government health programs, including Medicaid, Medicare and the 340B drug discount program. It also suggests reforms to FDA and calls for increased pressure on other countries to pay more for drugs.

To decrease the price of physician-administered drugs, the report suggests moving Medicare Part B drug coverage into Medicare’s prescription drug program, Part D. Currently Part B drugs are reimbursed at a set formula, while in Part D, private payers negotiate with drug companies to bring prices down. The report also suggests paying doctors less for new Part B drugs.

The report suggests lowering Part D copays for generic drugs, so patients aren’t incentivized to use higher-priced medicines to move faster into the program’s catastrophic coverage phase, in which patients pay very little. The CEA also suggests requiring drug plans to share manufacturer discounts with patients and decreasing concentration in the pharmacy benefits manager market and other parts of the supply chain to increase competition and reduce prices. However, it doesn’t propose how to do this.

FDA reforms floated include giving expedited review for brand drugs that are the second or third in their class, to create more market competition, to drive down prices.

The report suggests using trade policy to push other countries to pay more for drugs or tying public U.S. reimbursement to prices paid by foreign governments.

To read the report:

CMS to Hold Multiple Open Door Forums on Bundled Payments for Care Improvement Advanced

CMS recently announced the launch of a new voluntary bundled payment model called Bundled Payments for Care Improvement Advanced (BPCI Advanced). In BPCI Advanced, participants will be expected to redesign care delivery to keep Medicare expenditures within a defined budget while maintaining or improving performance on specific quality measures. Participants bear financial risk, have payments under the model tied to quality performance and are required to use Certified Electronic Health Record Technology. By meeting these requirements, the model qualifies as an Advanced Payment Model. The Model Performance Period for BPCI Advanced starts on Oct. 1, 2018, and runs through Dec. 31, 2023.

The CMS Innovation Center will be holding a second Open Door Forum to answer questions regarding the BPCI Advanced Model and the Application Process on Thurs., Feb. 15, 2018, from 12 p.m.–1 p.m. EST. This event is open to those who are interested in learning more about the model. Additional information and registration access are now available. The audio file and transcript of the first Open Door Forum held on Jan. 30 is now available.

For more information about the model and its requirements, or to download a request for applications document (RFA), the application template and the necessary attachments, please visit BPCI Advanced web page. Applications must be submitted via the Application Portal, which will close on 11:59 p.m. EST on March 12, 2018. Applications submitted via email will not be accepted.

3. Reports

GAO: Medicaid Assisted Living Services: Improved Federal Oversight of Beneficiary Health and Welfare is Needed GAO18-179: Published: Jan 5, 2018. Publicly Released: Feb. 5, 2018.

The GAO found that 26 states could not report to the GAO the number of “critical incidents” occurring in assisted living facilities in their state. Twenty-two states that did track this information used different definitions of critical incidents, complicating effective oversight of assisted living facilities.

GAO: Medicare Fee-For-Service: Modernizing Cost-sharing Design Would Involve Trade-offs, the Results of Which Would Depend on Time Horizon

GAO-18-100, Jan. 9

To address concerns with the current Medicare fee-for-service cost-sharing design, various organizations have proposed modernizing the design to make it simpler and include features found in private plans. This report describes implications of the current cost-sharing design, options for modernizing and how modernized cost-sharing designs directly and indirectly affect beneficiary cost-sharing responsibilities.

Substance-Affected Infants: Additional Guidance Would Help States Better Implement Protections for Children
GAO-18-196, Jan. 19

Under CAPTA, states perform a range of prevention activities addressing the needs of infants with prenatal drug exposure. The GAO was asked to examine the steps states are taking to implement CAPTA requirements on substance-affected infants and related amendments enacted in 2016. The GAO recommends that HHS provide additional guidance to states to address known challenges and enhance their understanding of requirements. HHS did not concur with the recommendations. 

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

Stephanie Kennan, Senior Vice President
Anne Starke, Research Associate

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