Washington Healthcare Update

March 11, 2019

Pardon Our Dust

We recently launched this new site and are still in the process of updating some of our archived content. Some details of this article may be incomplete, links may be broken, and other elements may not display properly yet. We appreciate your patience and understanding.

Coming Week’s Highlights: CMS seeks recommendations that allow Americans to purchase health insurance across state lines, House to hold hearings on the 2020 HHS budget and lowering the cost of prescription drugs.

Upcoming Hearings

Congress

Hearings

Administration

Courts

Regulations

Reports

Upcoming Hearings

Tuesday, March 12, 2019

House Committee on Energy and Commerce: “The Fiscal Year 2020 HHS Budget”
The Health Subcommittee will hold a hearing with Health and Human Services Secretary (HHS) Alex Azar on President Trump’s budget request related to the U.S. Department of Health and Human Services (HHS) and its agencies for fiscal year (FY) 2020. Find a link to witness testimonies, member statements and the hearing live feed here.

Wednesday, March 13, 2019

House Committee on Energy and Commerce: “Lowering the Cost of Prescription Drugs: Reducing Barriers to Market Competition”
The Health Subcommittee will hold a hearing on rising prescription drug costs and the obstacles faced by market competition. Find a link to witness testimonies, member statements and the hearing live feed here.

Congress

Hearings

House Committee on Energy and Commerce: “Strengthening Our Health Care System: Legislation to Lower Consumer Costs and Expand Access”

Wednesday, March 6, 2019: The House Committee on Energy and Commerce held a hearing on lowering consumer costs and expanding access to health care. Find a link to witness testimonies, member statements and the hearing live feed here.

Why this is important: Using testimonies from the states of Massachusetts and California as prime examples, the Health Subcommittee outlined how three pieces of legislation could incentive and aid states to create insurance exchanges. Republican members of the subcommittee were collectively against this addition to the Affordable Care Act (ACA), while Rep. Buddy Carter (R-GA) asked that the subcommittee shift its focus to drug prices, much like a majority of other Congressional committees.

  • H.R. 1425, the “State Health Care Premium Reduction Act”, introduced by Reps. Angie Craig (D-MN) and Scott Peters (D-CA), provides $10 billion annually to states to establish a state reinsurance program or use the funds to provide financial assistance to reduce out-of-pocket costs for individuals enrolled in qualified health plans. The bill also requires the Centers for Medicare and Medicaid Services (CMS) to establish and implement a reinsurance program in states that do not apply for federal funding under the bill.
     
  • H.R.1385, the “State Allowance for a Variety of Exchanges (SAVE) Act,” introduced by Rep. Andy Kim (D-NJ) and Rep. Brian Fitzpatrick (R-PA), provides states with $200 million in federal funds to establish state-based Marketplaces. Under current law, federal funds are no longer available for states to set up state-based Marketplaces.  
     
  • H.R.1386, the “Expand Navigators’ Resources for Outreach, Learning, and Longevity (ENROLL) Act,” introduced by Rep. Kathy Castor (D-FL), would provide $100 million annually for the federally facilitated Marketplace (FFM) navigator program. The bill would reinstate the requirement that there be at least two navigator entities in each state and would require the Department of Health and Human Services (HHS) to ensure that navigator grants are awarded to entities with demonstrated capacity to carry out the duties specified in the Affordable Care Act. The bill would also prohibit HHS from considering whether a navigator entity has demonstrated how it will provide information to individuals relating to association health plans or short-term, limited-duration insurance plans.

House Ways and Means Committee, Subcommittee on Health: “Promoting Competition to Lower Medicare Drug Prices”

Thursday, March 7, 2019: The House Ways and Means Subcommittee on Health held a hearing on lowering Medicare drug prices by promoting competition among manufacturers. Find a link to witness testimonies, member statements and the hearing live feed here.

Why this is important: Facilitating competition in health care markets to bring down drug prices is currently a popular topic in Congress. The hearing marked the first time since Democrats took control of the House that this panel has held a hearing on drug pricing issues. Among the topics discussed was legislation introduced by Rep. Lloyd Doggett (D-Texas), the health subcommittee’s chair, and Sen. Sherrod Brown (D-Ohio). The Medicare Negotiation and Competitive Licensing Act (S.377) that would allow Medicare to negotiate for lower drug prices by setting a price for a drug based on a number of market-based factors, such as clinical effectiveness and cost.

House Committee on the Judiciary: “Diagnosing the Problem: Exploring the Effects of Consolidation and Anticompetitive Conduct in Health Care Markets”

Thursday, March 7, 2019: The House Committee on the Judiciary held a hearing on the issue of anticompetitive conduct affecting health care markets. Find a link to witness testimonies, member statements and the hearing live feed here.

Why this is important: Members and witnesses criticized consolidation among hospitals and other healthcare sectors. According to the committee members, the public is told these deals will lead to improved efficiency and higher quality care, and those purported benefits frequently fail to materialize. The hearing grouped payer and provider consolidation with anticompetitive concerns about the pharmaceutical industry, topics that have gained interest from both parties.

Senate Committee on Health, Education, Labor and Pensions (HELP): “Vaccines Save Lives: What is Driving Preventable Disease Outbreaks?”

Tuesday, March 5, 2019: The Senate Committee on Health, Education, Labor and Pensions (HELP) held a hearing on the outbreak of preventable diseases and the debate on vaccinations. Find a link to witness testimonies, member statements and the hearing live feed here.

Why this is important: The hearing sought answers to the antivaccination movement that has led to a reduction in immunization rates in the United States. Unvaccinated individuals were cited by the Centers for Disease Control and Prevention (CDC) as the root cause of recent measles outbreaks in the state of Washington and in other regions across the country. There was consensus on the panel and amongst Members that the movement could become detrimental if it continues to grow.

Senate Finance Committee: “Not Forgotten: Protecting Americans from Abuse and Neglect in Nursing Homes”

Wednesday, March 6, 2019: The Senate Committee on Finance held a hearing on the issue of abuse and neglect in nursing homes. Find a link to witness testimonies, member statements and the hearing live feed here.

Why this is important: Chairman Grassley has a long history in performing oversight of nursing homes from his days as a member of the Senate Special Committee on Aging and as a member of the Senate Finance Committee. Senators on both sides of the aisle also raised concerns with the closure of rural nursing homes, which one expert testified could be exacerbated by low Medicaid pay rates, and Finance Committee ranking Democrat Ron Wyden (OR) raised concerns with CMS’ proposal to roll back emergency preparedness requirements.

Senate Committee on Aging: “The Complex Web of Prescription Drug Prices, Part I: Patients Struggling with Rising Costs”

Wednesday, March 6, 2019: The Senate Committee on Aging held two hearings.The first hearing on rising costs of prescription drug prices. Find a link to witness testimonies, member statements and the hearing live feed here.

Senate Committee on Aging: “The Complex Web of Prescription Drug Prices, Part II: Untangling the Web and Paths Forward”

Thursday, March 7, 2019: This hearing was the second of a two-part hearing on drug prices. Find a link to witness testimonies, member statements and the hearing live feed here.

Why this is important: The two-part hearing series held last week had the Senate Aging committee join the topic of lowering drug prices. Senate Aging Committee Chair Susan Collins (R-ME) predicted that President Trump will have legislation on his desk late this year on the topic. Collins is considering legislation that would apply a proposed Medicare rebate policy to the commercial market, The Medicare proposal would ban rebates or make insurers subtract them from list prices when people buy drugs at the pharmacy. However, Senate Finance Chair Chuck Grassley (R-IA), whose committee has jurisdiction over rebate legislation, said he is not yet ready to discuss rebate legislation.

Administration

CMS Seeks Recommendations that Allow Americans to Purchase Health Insurance Across State Lines

On March 6, the Centers for Medicare and Medicaid Services (CMS) issued a request for information (RFI) for recommendations on how to eliminate regulatory, operational and financial barriers to enhance issuers’ ability to sell health insurance coverage across state lines.  This announcement builds on President Trump’s Oct. 2017 Executive Order, “Promoting Healthcare Choice and Competition across the United States,” which intends to provide Americans relief from rising premiums by increasing consumer choice and competition. 

In particular, CMS requests feedback on how states can take advantage of Section 1333 of the Patient Protection and Affordable Care Act, which provides for the establishment of a regulatory framework that allows two or more states to enter into a Health Care Choice Compact to facilitate the sale of health insurance coverage across state lines. CMS is primarily looking for input on how to expand access to health insurance coverage across state lines, effectively operationalize the sale of health insurance coverage across state lines, and understand the financial impacts of selling health insurance coverage across state lines.

Find the RFI here; the RFI will be officially published on March 11, 2019.

CMS: Medicare Advantage – Value-Based Insurance Design (VBID) Model Application Process

As Medicare Advantage Organizations (MAOs) are preparing VBID Model applications, the Centers for Medicaid and Medicare Services (CMS) requests that plans reach out to the VBID Model team with any questions, as well as any requests for technical support to assist with the application portal and process.

MAOs interested in applying to the VBID Model should fill out an application in the VBID application portal by March 15, 2019. MAOs may also choose to add components to their original application by 11:59 p.m. EDT on April 30, 2019. If the MAO wishes to amend its application with additional components, it must email the VBID Model team.

Find more details and contact information here.

Gottlieb Resigns as FDA Commissioner

On March 5, Scott Gottlieb announced he is leaving the Food and Drug Administration (FDA) after 23 months as FDA Commissioner. Gottlieb sent a resignation letter to the Secretary of the Department of Health and Human Services (HHS), Alex Azar, and did not include why he was resigning.

Courts

Judgement in ACA Subsidy Case Put on Hold While CMS Verifies Claims

As of March 8, insurers seeking nearly $2.4 billion for missed 2018 cost-sharing reduction (CSR) payments have to wait a few more months for a judgment. U.S. District Court Judge Margaret Sweeney sided with the federal government in holding off until the Centers for Medicare and Medicaid Services (CMS) has a chance to verify the amount that insurers in the class-action lawsuit would have received in 2018 if the administration had not cut off the payments.

Sweeney set a new deadline for notifying the court of the final amount seven days after that reconciliation process is completed. Sweeney also set a March 22 deadline for the parties to indicate whether she should award damages of just over $100 million for missed 2017 CSR payments.

Regulations

FDA: Update on Nonproprietary Naming of Biological Products

On March 7, the Food and Drug Administration (FDA) issuing draft guidance that proposes to apply the naming convention only to new originator biologics and interchangeable biosimilars and to exempt currently licensed or approved biologics or products that are in the process of being licensed, including insulin. The draft guidance is a reversal of the FDA’s 2017 decision to require that all biologics follow a nonproprietary naming protocol.

The FDA cited brand-biologic industry concerns that changing the names of older biologics would impose costs on the health care system that could then be passed onto patients, and could create confusion among patients and health care providers.

Comment period ends on May 7, 2019; comments can be submitted here.

Find the draft guidance here.

FDA: Quality Considerations for Continuous Manufacturing

On Feb. 26, the Food and Drug Administration (FDA) released a draft guidance on what factors brand and generic drug manufacturers should consider when setting up and using a continuous manufacturing system to produce their products. The guidance outlines the benefits of continuous manufacturing over traditional batch manufacturing, including the efficiency that comes with continuous manufacturing that could eventually lead to lower drug prices for consumers.

Comment period ends on May 28, 2019; comments can be submitted here.

Find the draft guidance here.

FDA: Competitive Generic Therapies Draft Guidance

On Feb. 19, the Food and Drug Administration (FDA) published a draft guidance on how drug manufacturers can apply for the competitive generic therapy (CGT) pathway, intended for generic versions of drugs that have little-to-no competition in the market. This guidance encourages more generic drug manufacturing and explains how exclusivity would work under the CGT pathway, including exclusivity given to multiple CGT pathway-approved drugs that fit certain criteria.

Comment period ends on April 22, 2019; comments can be submitted here.

Find the draft guidance here.

CMS Updates Overall Hospital Star Ratings, Asks for Feedback

On Feb. 28, the Centers for Medicare and Medicaid Service (CMS) updated the overall hospital star ratings, while announcing that it is looking at possible changes to how ratings are calculated for both the short and long term. Proposed changes help patients make more “like-to-like” comparisons, meaning they could compare similar hospitals. The CMS would accomplish this by placing hospitals into peer groups—meaning small rural hospitals would not be compared to larger, academic hospitals.

Comment period ends on March 29, 2019.

Find the proposed changes and submit comments here.

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.

ONC/CMS: Interoperability; Exceptions to Information Blocking

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 ends on May 3, 2019.

Read the proposed rule and submit comments 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.

Reports

National Academies Affirms Long-Standing Sodium Recommendations

On March 5, the National Academies of Sciences, Engineering, and Medicine released a report on ideal levels of sodium consumption. The report largely held up long-standing advice that Americans are still consuming too much sodium and need to cut back to reduce disease risk. The report also recommended lowered levels for potassium consumption. The academies set what is called a Chronic Disease Risk Reduction Intake (CDRR) for sodium for people 14 and older, at 2,300 milligrams a day, which is in line with the federal government’s current sodium advice.

Find the full report here.

GAO: Drug Policy – Preliminary Observations on the 2019 National Drug Control Strategy

On March 7, the Government Accountability Office (GAO) released preliminary observations on the 2019 National Drug Control Strategy and related findings from select GAO reports on

Federal opioid-related efforts, all intended to help coordinate more than a dozen agencies’ efforts to address illicit drug use. The GAO has made prior recommendations to the Office of National Drug Control Policy (ONDCP), the Department of Health and Human Services (HHS), and other federal agencies to address drug misuse, including establishing performance measures with targets to better gauge progress.

The GAO is concerned about the lack of information in the 2019 National Drug Control Strategy on measuring progress toward its objective to reduce lives lost. The GAO continues to recommend that federal agencies establish performance measures to better determine progress toward their goals. While federal agencies have taken some action to implement these recommendations, such as establishing performance measures for access to medication-assisted treatment, additional actions to measure the effectiveness of related drug control efforts would further help to gauge agencies’ success, determine if new approaches are needed, and efficiently target resources.

Find the full report 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.

To sign up for the Weekly Washington Healthcare Update, use our onlinesubscription form.

McGuireWoods Consulting LLC
2001 K Street
Suite 400
Washington, DC 20006-1040
+1 202 857 1700