Washington Healthcare Update

February 18, 2019

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Coming Week’s Highlights: Congress is in recess this week

Upcoming Hearings

Upcoming Events

Congress

House Hearings

Senate Hearings

House

Senate

Administration

Courts

Regulations

Upcoming Hearings

Tuesday, Feb. 26, 2019
Senate Finance Committee: “TBA Hearing on Drug Pricing”
The second hearing in a series on drug pricing in the Senate Finance Committee will include the testimonies of seven drug company executives. More information on timing, location and witnesses will be announced in the next week.

Wednesday, Feb. 27, 2019
House Committee on Energy and Commerce: “TBA Hearing on Measles Outbreak”
The House Energy and Commerce leadership announced that the Oversight and Investigations Subcommittee will hold a hearing on the current measles outbreak and response efforts.More information on timing, location and witnesses will be announced next week.

Upcoming Events

March 7-8, 2019: Medicare Payment Advisory Commission (MedPAC) Public Meeting
Find the meeting agenda and more details as they become available here.

March 7-8, 2019: Medicaid and CHIP Payment and Access Commission (MACPAC) Public Meeting
Find the meeting agenda and more details as they become available here.

Congress

House Hearings

House Ways and Means Committee: The Cost of Rising Prescription Drug Prices

On Feb. 12, the House Ways and Means Committee held a hearing on the work that would need to be done to pass Medicare price negotiation. Find a link to witness testimonies, member statements and the hearing live feed here.

Why is this important: Health subcommittee Chair Rep. Lloyd Doggett (D-TX) promoted his price-negotiation proposal (H.R.1046), yet maintained his stance that he is open to other negotiation models, including compulsory arbitration.

Doggett’s price-negotiation bill is the highest-profile proposal thus far with more than 100 House cosponsors. It allows the Department of Health and Human Services (HHS) to negotiate prices for all drugs, though Republicans largely inquired about how to address the costs of expensive, single-source drugs. House Republicans oppose Medicare negotiation, especially if the plan were to let the government exclude coverage of drugs.

House Committee on Energy and Commerce: Strengthening Our Health Care System—Legislation to Reverse ACA Sabotage and Ensure Pre-Existing Conditions Protections

On Feb. 13, the House Energy and Commerce committee held a hearing on threats to the Affordable Care Act (ACA) and how to protection patients with pre-existing conditions as a result of ongoing legislation and federal court cases that could dismantle the law.

Why this is important: The House Energy & Commerce Committee identified three pieces of legislation to reverse the Trump administration’s actions to unravel the Affordable Care Act (ACA). The package, which the health subcommittee reviewed at the hearing, would revoke the administration’s short-term plan rule, strike the revised state innovation waiver guidance and restore ACA outreach funding. In addition, there appeared to be bipartisan interest in legislation introduced by Rep. Anna Eshoo (D-CA) to inform consumers about the shortcomings of short-term plans. 

The bills reviewed include:

  1. The Protecting Americans with Pre-existing Conditions Act of 2019, (H.R.986), introduced by Democratic Reps. Ann Kuster (NH), Joe Courtney (CT) and Don Beyer (VA).
  2. Legislation to restore ACA market and outreach funding back to $100 million and disallow the money from being used to promote products that do not comply with the ACA (H.R.987), introduced by Democratic Reps. Lisa Blunt Rochester (DE), Dan Kinder (MI), Lucy McBath (GA) and Kathy Castor (FL).
  3. Legislation to overturn the Trump administration’s expansion of short-term health plans (H.R.1010), introduced by Democratic Reps. Lauren Underwood (IL), Kathy Castor (FL), Mark DeSaulnier (CA) and Gwen Moore (WI).

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

Senate Hearings  

Senate HELP Committee: Managing Pain During the Opioid Crisis

On Feb. 12, the Senate committee on Health, Education, Labor and Pensions held a hearing on the opioid crisis, discussing research and approaches to pain management amid efforts to curb opioid abuse.

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

Why is this important: Chair Lamar Alexander (R-TN) shared during the hearing a report released in 2018 from the Centers for Disease Control and Prevention (CDC) that says about 50 million Americans have chronic pain and nearly 20 million of those have high-impact chronic pain. This hearing is part of an effort to make dramatic reductions in the supply and use of opioids, while taking care of Americans who are in pain.

House

House Members Praise MA Supplemental Benefits in Letter, Request More Work from CMS

On Feb. 6, more than 300 House representatives and over 60 senators praised supplemental benefits for the chronically ill in Medicare Advantage (MA) as part of an annual letter addressing the program. The letter also urged the Centers for Medicare and Medicaid Services (CMS) to build on the broader category of supplemental benefits CMS authorized last year. At the same time, the members also asked CMS to give MA plans enough time to evaluate and put into place substantive changes to the program.

Read the bipartisan House letter here.
Read the bipartisan Senate letter here.

Senate

Sen. Schatz, Rep. Luján Reintroduce Legislation to Create Public Health Care Option

On Feb. 14, Sen. Brian Schatz (D-HI) and Rep. Ben Ray Luján (D-NM) reintroduced the State Public Option Act, bicameral legislation to create a Medicaid-based public health care option within the Affordable Care Act (ACA). The act allows states to create a Medicaid buy-in program for all their residents regardless of income, giving everyone the option to buy into a state-driven Medicaid health insurance plan. At least 14 states are exploring implementing a Medicaid public option within their legislatures. The bill now has 61 cosponsors.

Read the full bill here.

HHS Secretary Alex Azar Meets with Senate Finance Democrats

On Feb. 13, the Department of Health and Human Services (HHS) Secretary, Alex Azar, visited Democratic members of the Senate Finance Committee, similar to a meeting held a month ago with committee Republicans. The topic of discussion was drug prices, ahead of the Feb. 26 hearing where seven drug company executives will testify to the committee. The hearing has yet to be officially posted on the Senate Finance Committee website.

Wyden Introduces Three Bills for Drug-Pricing Transparency

On Feb. 12, Ranking Senate Finance Democrat Ron Wyden (OR) released three bills to bring transparency to the drug-pricing system and increasing consumer protections for seniors with high drug costs. The Stopping the Pharmaceutical Industry from Keeping Drugs Expensive (SPIKE) Act discourages drug makers from significantly increasing prices without justification. The Creating Transparency to Have Drug Rebates Unlocked (C-THRU) Act aims to improve transparency in the way drugs are priced. The Reducing Existing Costs Associated with Pharmaceuticals for Seniors Act (RxCAP) limits seniors’ out-of-pocket spending on retail drugs.

Administration

HHS Launches Emergency Triage, Treat and Transport (ET3) Payment Model

On Feb. 14, the Department of Health and Human Services’ (HHS) Center for Medicare and Medicaid Innovation (Innovation Center) announced a new payment model for emergency ambulance services that allows Medicare Fee-For-Service (FFS) beneficiaries to receive the most appropriate level of care at the right time and place with the potential for lower out-of-pocket costs.

The new model, the Emergency Triage, Treat and Transport (ET3) model, makes it possible for participating ambulance suppliers and providers to partner with qualified health care practitioners to deliver treatment in place and with alternative destination sites to care for Medicare.

Find more information on the ET3 model here.

U.S. Preventive Services Task Force: Perinatal Depression; Preventive Interventions

On Feb. 12, the U.S. Preventive Services Task Force proposed guidance for health plans to cover counseling services for pregnant women and new mothers with risk factors for depression, such as a history of depression, anxiety, abuse or partner violence, young age, low income or pregnancy complications. The guidance follows evidence that counseling interventions such as cognitive behavioral therapy and interpersonal therapy were effective in preventing perinatal depression.

Most insurance plans are required to comply with guidance from the Task Force panel, which is advising doctors to screen women during their pregnancy and in the first year after giving birth.

Read the recommendation here.

Courts

House Democrats Allowed to Intervene in Texas ACA Case; Expedited Hearing Denied

On Feb. 14, the 5th Circuit Court of Appeals approved a request from the Democratic members of the House of Representatives to intervene in Texas v. Azar, the federal court ruling that threatens the constitutionality of the Affordable Care Act (ACA). Four additional states, Nevada, Iowa, Michigan and Colorado, gained approval to join the 17 Democratic attorneys general who are already leading the appeal. The court also denied the request of the attorneys general to expedite proceedings.

On Feb. 11, plaintiffs in the Texas v. Azar case filed a brief opposing a request by the Democratic attorneys general to expedite the appeal process, arguing more time is necessary for such an important case and that there is no urgency since the initial ruling has been put on hold. The plaintiffs also argued the proposed early July date for oral arguments is unworkable since their lead attorney has longstanding vacation plans.

Multiple CSR Cases Won by Issuers for Federal Reimbursement

On Feb. 15, the U.S. Court of Federal Claims handed issuers major wins in four cost-sharing reduction (CSR) cases, including a class action suit brought by Wisconsin’s Common Ground Health Cooperative in which Judge Margaret Sweeney ruled that the government is responsible for reimbursing plans unpaid CSRs in 2017 and 2018. This ruling is despite the silver-loading workaround, which allows insurers to offset the cost of the unfunded CSR subsidies by raising premium prices for middle-tier plans on the Affordable Care Act (ACA) exchanges. On the same day, Sweeney ruled in favor of Texas non-profit Community Health Choices and Maine Community Health Options with the same concern.

In all of the rulings, Sweeney determined that the government violated the ACA’s statute that created the CSRs and breached an implied contract. Sweeney disregarded the government’s argument that the silver-loading practice precludes recovery of CSRs for the 2018 plan year. Because Maine Community Health Options had only asked for recovery for 2017, the issuer quickly amended its complaint to request another $36 million for 2018. The cases are likely to be appealed by the government, and end up in the Supreme Court.

Regulations

CMS: Coverage with Evidence Development for Chimeric Antigen Receptor (CAR) T-cell Therapy

On Feb. 15, the Centers for Medicare and Medicaid Services (CMS) proposed Medicare coverage of approved CAR-T cell therapies that use the patient’s immune system to fight cancer. The proposed rule requires Medicare to cover the therapy nationwide when it is offered in a CMS-approved registry or clinical study, in which patients are monitored for at least two years post-treatment. The evidence from these studies and registries allows CMS to identify the patients who benefit from CAR-T cell therapies.

Currently, there is no national Medicare policy for covering CAR T-cell therapy. Local Medicare administrative contractors have discretion over whether to pay for the treatment.

Comment period ends on March 17, 2019; comments can be submitted here.

Find the proposed rule here.

CMS Upcoming Rule: Revision of Requirements for Long-Term Care Facilities: Arbitration Agreements

A final rule from the Centers for Medicare and Medicaid Services (CMS) is expected to clarify that long-term care facilities can require residents or their families to agree, before disputes arise, to settle complaints through arbitration rather than litigation. The rule arrived at the Office of Management and Budget (OMB) for review on Jan. 30, and could end the fight over legal protections for senior citizens in the health care system.

The administration’s proposed rule includes new transparency measures for pre-dispute arbitration agreements, such as requirements for facilities to clearly explain the terms to prospective residents and that those residents acknowledge they understand.

The rule, found here, is still being reviewed at the OMB.

CMS Proposes Innovations in Technology to Promote Patient Access; Make Health Data Exchange a Reality

On Feb. 11, the Centers for Medicare and Medicaid Services (CMS) and the Office of the National Coordinator (ONC) released proposed rules to support secure access, exchange and use of electronic health information. The Interoperability and Patient Access Proposed Rule from CMS outlines opportunities to make patient data more useful and transferable through open, secure, standardized and machine-readable formats while reducing restrictions on health care providers. The ONC rule calls on the health care industry to adopt standardized application programming interfaces (APIs), which will allow individuals to securely and easily access structured electronic health information (EHI) using smartphone applications.

In addition to the policy proposals, CMS released two Requests for Information (RFIs) to obtain feedback on interoperability and health information technology (health IT) adoption in post-acute care (PAC) settings, and the role of patient matching in interoperability and improved patient care.

Comment period for the proposed rules and the RFIs closes in early April; exact date will be updated when the rules are posted to the Federal Register. 

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.

ONC: Interoperability; Exceptions to Information Blocking

On Feb. 11, the Office of the National Coordinator for Health IT (ONC) released a proposed rule requiring patient electronic access to electronic health information (EHI) be made available at no cost. The rule provides guidance for a 21st Century Cures Act provision to prevent information blocking. The rule includes seven exceptions to what Congress defined as blocking the sharing of electronic information. ONC also asks for information on what pricing information could be included as part of electronic health information to help the public see what they are paying for health care. The proposed rule supplements the rule on interoperability released by the Centers for Medicare and Medicaid Services (CMS) on the same day.

Comment period closes in early April; exact date will be updated when the rules are posted to the Federal Register.

Read the proposed rule here.

HHS Proposal Calls for Reforming Drug-Rebate System

Published on Feb. 6, a proposal by the Department of Health and Human Services (HHS) called for 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.

Comment period ends on April 8, 2019.

Read the proposed rule here.

If you have any questions, contact the following individuals atMcGuireWoods 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 andeconomic development, strategic communications & grassroots, and governmentrelations services. McGuireWoods Consulting is a subsidiary of theMcGuireWoods LLPlaw firm and has been named in The National Law Journal’s special annualreport, “The Influence 50,” for the past several years. In the most recentreport, McGuireWoods Consulting was ranked 15th of the 1,900 governmentrelations firms in Washington, D.C.

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