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Feb 4, 2019

Washington Healthcare Update

Coming Week’s Highlights: State of the Union scheduled for Feb. 5; House committees continue discussion on pre-existing conditions.

Congress

House Hearings

Senate Hearings

Senate

Administration

Regulations

Courts

Reports


Congress

House Hearings

Oversight and Reform Committee: Examining the Actions of Drug Companies in Raising Prescription Drug Prices

On Jan. 29, the House Committee on Oversight and Reform held a hearing to determine business practices of pharmaceutical manufacturers as well as possible explanations for and solutions to rising drug prices.

Find a link to witness testimonies, member statements and the entire hearing here.

Why this is important: Committee members emphasized major concerns that are widespread in both the House and Senate—a lack of transparency surrounding pharmaceutical drugs manufacturers, pharmacy benefit managers (PBMs) and the negotiation process for these costs, the same concerns raised in the Senate Finance committee held on the same day. However, members disagreed on methods to intervene and the extent to which the federal government should play a role in this process.

Ways and Means Committee: Protecting Americans with Pre-Existing Conditions

On Jan. 29, the House Ways and Means Committee held a hearing to discuss pre-existing conditions and their impact on health care coverage. With the Texas federal court ruling that the Affordable Care Act (ACA) should be struck down, protecting individuals with pre-existing conditions is high on the docket of multiple committees.

Find a link to witness testimonies and member statements here.

Watch the hearing here.

Why this is important: Protections related to pre-existing conditions are the most popular part of the Affordable Care Act. Prior to the 2018 election, Republicans introduced legislation stating that it would provide individuals with protections from pre- existing conditions. However, these bills had significant shortcomings in comparison to the ACA. Republican committee members expressed support for guaranteeing coverage for people with pre-existing conditions and called on Congress to lower health care costs. Democrats on the panel pushed back on that, criticizing Republicans for a previous lack of support for pre-existing conditions protections in the ACA. One witness testified concerning the benefits of Association Health Plans, which the Administration supports and many Republicans see as part of the answer to the coverage problem. 

Budget Committee: CBO’s Budget and Economic Outlook: FY 2019-2029

On Jan. 29, the House Budget Committee held a hearing on the Congressional Budget Office’s (CBO) updated budget and economic outlook.

Watch the hearing here.

Why this is important: Chairman John Yarmuth (D-KY) highlighted that the CBO projects a deficit this year that is $118 billion higher than last year’s. Average deficits over the next decade are projected to rise. The national debt is expected to reach 93 percent of GDP by 2029, before rising to an unprecedented 150 percent of GDP in 2049. CBO Director Keith Hall testified before the committee.

Senate Hearings  

Finance Committee: Drug Pricing in America: A Prescription for Change, Part I

On Jan. 29, the Senate Finance committee held the first in a series of hearings for a bipartisan reform effort and increased transparency in the face of rising drug prices.

Find a link to witness testimonies, member statements and the entire hearing here.

Why this is important: Witnesses suggested reforms to the Medicare Part D program, the 340B program and rebate programs as a few methods to lower prices. Chairman Chuck Grassley (R-IA) discussed his bipartisan bill with Sen. Amy Klobuchar (D-MN), the Safe and Affordable Drugs from Canada Act of 2019 (S.64). This legislation would permit the importation of prescription drugs from approved pharmacies in Canada. There was frustration on both sides of the aisle because drug manufacturers refused to testify. 

Health, Education, Labor and Pensions (HELP) Committee: Access to Care: Health Centers and Providers in Underserved Communities

On Jan. 29, the Health, Education, Labor and Pensions (HELP) Committee held a hearing to learn more about community health centers, the National Health Service Corps and the Teaching Health Center Graduate Medical Education programs, which all currently receive mandatory funding from the federal government that is set to expire at the end of this fiscal year.

Find a link to witness testimonies, member statements and the entire hearing here.

Why this is important: With the federal funding to the highlighted programs expiring at the end of the fiscal year, the HELP committee’s hearing gave a platform to better  understand the importance of these programs. Chair Lamar Alexander (R-TN) introduced S. 192, the Community and Public Health Programs Extension Act, to the floor last week.

Budget Committee: CBO’s Budget and Economic Outlook: FY 2019-2029

On Jan. 29, the Senate Budget Committee held a hearing on the Congressional Budget Office’s (CBO) updated budget and economic outlook.

Watch the hearing here.

Why this is important: The CBO outlook projects a deficit this year that is $118 billion higher than last year’s. Average deficits over the next decade are projected to rise. The national debt is expected to reach 93 percent of GDP by 2029, before rising to an unprecedented 150 percent of GDP in 2049. CBO Director Keith Hall testified before the committee.

Upcoming Hearings

Tuesday, Feb. 5, 2019

  • Senate Health, Education, Labor and Pensions (HELP) Committee: How Primary Care Affects Health Care Costs and Outcomes

Full committee hearing held at 10:00 a.m. in Room 430 of the Dirksen Senate Office Building.

Find a link to witness testimonies, member statements and the hearing live feed here.

Wednesday, Feb. 6, 2019

  • House Committee on Energy and Commerce, Subcommittee on Health: Texas v. U.S.: The Republican Lawsuit and Its Impacts on Americans with Pre-Existing Conditions

Find a link to witness testimonies, member statements and the hearing live feed here.

  • House Committee on Education and Labor: “Examining Threats to Workers with Preexisting Conditions."

Find a link to witness testimonies, member statements and the hearing live feed here.

Senate

Cassidy, Warner Seek Feedback on Draft Outcome-Based Contract Bill

On Jan. 29, Sens. Bill Cassidy (R-LA) and Mark Warner (D-VA) requested comments on a draft bill to exempt performance-based drug-reimbursement contracts from the Medicaid best price rule, anti-kickback law and the “Stark law” against doctor self-referrals. The draft bill, the Patient Affordability, Value and Efficiency Act, encourages contracts based on patient outcomes, clinical circumstances or other measures of value. The draft bill also applies to medical devices.

Feedback is due to the senators’ offices by Feb. 19.

Read the draft bill here.

Bipartisan Bill Extends Community Health Center Funding for Five Years

On Jan. 29, Senate Health, Education, Labor and Pensions (HELP) members pushed for a five-year funding package for community health centers, more than double the funding provided the last time Congress extended funding for those providers. This support follows the Senate HELP Chair Lamar Alexander (R-TN) and ranking Democrat Patty Murray’s (WA) bill, introduced last week, funding the Community Health Center program, the National Health Service Corps, the Teaching Health Center Graduate Medical Education program, the Special Diabetes Program at the National Institutes of Health (NIH) and the Special Diabetes Program for Indians. The new bipartisan bill would provide five years of stable funding for community health centers, giving centers $4 billion a year in mandatory funding, as well as extend funding for teaching health centers and the National Health Service Corps, which encourages medical students and doctors to work in underserved communities.

Read and monitor the progress of S. 192 here.

Administration

CMS Releases New App Displaying What Original Medicare Covers

On Jan. 28, the Centers for Medicare and Medicaid Services (CMS) released the “What’s Covered” app, allowing individuals with original Medicare, caregivers, providers and others to see whether Medicare covers a specific medical item or service. The goal of the app is to make accurate, consistent original Medicare coverage information readily available on mobile devices.

The app is available free in both Google Play here and in the Apple App Store here.

Read the CMS press release here.

HHS Proposal Calls for Reforming Drug-Rebate System

On Jan. 31, the Department of Health and Human Services (HHS) proposed a ban on drug rebates, unless shared directly with seniors at the pharmacy counter, significantly lowering out-of-pocket retail-drug spending for the minority of seniors on expensive drugs. The proposal would raise premiums for all Medicare beneficiaries. Part of the administration’s plan is set to take effect in a year and an anticipated legal challenge by pharmacy benefit managers (PBMs) could delay implementation.

The proposal cuts rebates tied to a percentage of list price that drug manufacturers pay to Part D plans, Medicaid managed care and PBMs by taking away the long-standing exemption for rebates in anti-kickback law. The administration proposed two new safe harbor protections: one that would allow rebates that are shared with patients at the point of sale, and another that would let PBMs charge flat fees for their services. The proposed rule is scheduled to be published officially on Feb. 6.

Read the proposal here.

White House Drug Control Office Releases First National Strategy during Trump Presidency

On Jan. 31, the Office of National Drug Control Policy (ONDCP) released its first national strategy to combat the opioid epidemic, calling on the administration to expand its efforts to reverse escalating drug crises. The strategy, released about a year behind schedule, endorses the Department of Health and Human Services’ (HHS) assessment of the Centers for Disease Control and Prevention’s (CDC) 2016 prescribing guidelines.

The ONDCP reports that the CDC guidelines, which sought to limit the use of prescription opioids among chronic pain patients in primary care settings, should be expanded to treatment for acute and post-surgical pain, especially for patients with a history of substance use disorder. The HHS is currently working on expanding upon those guidelines. The strategy also calls for more research on viable non-opioid alternatives for treating pain. Earlier that day, Jim Carroll was sworn in as the first permanent director of ONDCP during the Trump presidency.

Read the report here.

Regulations

CMS Proposes Medicare Advantage and Part D Payment and Policy Updates to Maximize Competition and Coverage

On Jan. 30, the Centers for Medicare & Medicaid Services (CMS) released Part II of the 2020 Advance Notice of Methodological Changes for Medicare Advantage (MA) Capitation Rates and Part D Payment Policies (the Advance Notice), and the Draft Call Letter. CMS released Part I of the Advance Notice on Dec. 20. The proposed updates will continue to modernize and maximize competition among Medicare Advantage and Part D plans, as well as include actions to address the nation’s opioid crisis. The final 2020 Rate Announcement and final Call Letter will be published by April 1, 2019.

The proposed regulation topics include:

  • 2020 Part C Risk Adjustment Model Proposals.
  • 2020 Draft Call Letter.
  • Encouraging plans to take advantage of the new flexibilities to offer targeted benefits and cost-sharing reductions for patients with chronic pain or undergoing addiction treatment.
  • Encouraging Part D sponsors to provide lower cost sharing for opioid-reversal agents.
  • Proposing steps to advance opioid-related measures through the Star Ratings development process.

Comment period for Part I and Part II ends on March 1, 2019.

Find the proposed regulation for Part II here.

Courts

Government Reopens; Texas ACA Suit Appeal Begins Again With Pending Addition of Four AGs

On Jan. 28, the Department of Justice (DOJ) filed a motion to lift the stay on the appeal of Texas U.S. District Judge Reed O’Connor’s ruling to strike down the Affordable Care Act (ACA). The next morning, the court issued the briefing order to begin the process again now that the government has reopened.

The parties appealing the Texas ACA ruling have until Feb. 8 to respond to House Democrats’ motion to intervene at the U.S. Court of Appeals for the 5th Circuit. These parties include a group of Democratic attorneys general defending the law in court, as well as the DOJ, concerned that O’Connor’s ruling rejects their argument: pre-existing conditions provisions are tied to the mandate and should be struck, while the rest of the ACA law should stay in place.

The attorneys general in the California-led coalition of states appealing the ruling may gain four new states if the court grants the request from Colorado, Michigan, Nevada, and Iowa. If so, the states appealing will outnumber the Texas-led coalition of states suing to overturn the law.

Federal Judge Dismisses Maryland ACA Lawsuit

On Feb. 1, a federal judge in Maryland dismissed a lawsuit that sought to rule the Affordable Care Act (ACA) as lawful even without the individual mandate once enforced under the law.

U.S. District Judge Ellen Hollander’s decision called the accusations in Maryland v. U.S. et all as speculative, citing no “plausible interference” that the administration “will cease enforcement of part of all of the ACA,” as of right now.

Find Judge Hollander’s opinion here.

Reports

GAO: Health Insurance Exchanges—Claims Costs and Federal and State Policies Drove Issuer Participation, Premiums and Plan Design

On Jan. 28, the Government Accountability Office (GAO) released a report on the factors driving insurer participation in exchanges, interviewing representatives of nine insurers and reviewing data on profits and losses. Insurers told the GAO they generally raised their premiums from 2014-2018 and projected more increases in 2019. Reasons for this included higher costs to the insurers to provide services than first estimated and the end of several federal risk mitigation and cost-sharing programs. Looking to 2018 and 2019, selected issuers said that changes in federal and state policies would continue to affect decisions, particularly on premium changes.

Read the full report here.

CBO/JCT: Coverage Effects of New Rules for Association Health Plans and Short-Term Plans

On Jan. 31, the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) assessed the administration’s issued final rules governing coverage through association health plans (AHPs) and short-term, limited-duration insurance. The report determined how those rules would affect the CBO and JCT’s projections of the number of people who obtain health insurance and the costs of federal subsidies for that coverage.

The main findings from the report:

  • Each year over the next decade, roughly 5 million more people are projected to be enrolled in AHPs or short-term plans.
  • Once the two rules take full effect, premiums for coverage in the fully regulated small-group and nongroup markets are projected to be roughly 3% higher than without the rules.
  • Premiums for fully regulated coverage are projected to rise— people who continue to purchase coverage in the fully regulated markets are expected to have higher average health care costs than those who purchase AHPs or short-term plans.

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

Stephanie Kennan, Senior Vice President
Mariam Eatedali, 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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