May 13, 2019

Washington Healthcare Update

This week in Washington: House to hold hearings on PFAS contamination and exposure, the maternal mortality crisis and single-payer issues.

Upcoming Hearings/Markups






Final Regulations

Proposed Regulations


Upcoming Hearings/Markups

Wednesday, May 15, 2019

House Committee on Energy and Commerce: “Protecting Americans at Risk of PFAS Contamination and Exposure”
The House Committee on Energy and Commerce will hold a hearing to examine a series of bills aimed to address perflourinated compounds (PFAS) contamination. Find witness testimonies, live feed and other information here.

Thursday, May 16, 2019

House Ways and Means Committee: “Overcoming Racial Disparities and Social Determinants in the Maternal Mortality Crisis”
The House Ways and Means Committee will hold a hearing to address racial disparities and other social factors in the current maternal mortality crisis. Find witness testimonies, live feed and other information here.

Wednesday, May 22, 2019

House Budget Committee: “Key Design Components and Considerations for Establishing a Single-Payer Health Care System”
The House Budget Committee will hold a hearing on designing a single-payer health system, with three analysts from the Congressional Budget Office (CBO) testifying about the recent CBO report outlining considerations Congress should take on the topic. Find witness testimonies, live feed and other information here.


House Ways & Means Committee: Hearing on Single-Payer Issue
The House Ways & Means Committee will hold a hearing on the single-payer issue, marking the first time in decades that one of the two main health care committees of jurisdiction will hold a hearing on the topic. The other health care panel, the House Energy and Commerce Committee, has so far declined to commit to holding a hearing on the issue. The House Rules Committee held a hearing on Medicare for All last week. The date of the hearing has yet to be announced.



Senate Judiciary Committee: "Intellectual Property and the Price of Prescription Drugs: Balancing Innovation and Competition"

Tuesday, May 7, 2019: The Senate Judiciary Committee held a hearing on practices by drug manufacturers to delay the patent system and extend monopolies on prescription drugs. Find witness testimonies, live feed and other information here.

Why this is important: There appeared to be broad agreement on the CREATES Act of 2019, as Judiciary Committee Chair Lindsey Graham (R-SC) said he expects the committee will move on legislation related to patents and prescription drug pricing this year.

Senate Health, Education, Labor and Pensions (HELP) Committee: "Implementing the 21st Century Cures Act: Making Electronic Health Information Available to Patients and Providers, Part II"

Tuesday, May 7, 2019: The Senate HELP committee held the second hearing in a series on electronic health information and further implementing the 21st Century Cures Act. Witnesses include Dr. Don Rucker, the national coordinator for Health Information Technology at the Department of Health and Human Services (HHS), and Dr. Kate Goodrich, the director and Center for Medicare and Medicaid Services (CMS) chief medical officer. Find witness testimonies, live feed and other information here.

Why this is important: Senate HELP Committee Chairman Sen. Lamar Alexander (R-TN) called on the Department of Health and Human Services (HHS) to consider delaying the implementation of two new interoperability rules with expectations to prohibition against information blocking and standardized criteria for application programming interface (API) development. Echoing the March hearing, senators expressed concern on how HHS will ensure patient data are protected once they can be shared with third-party apps.

Senate Committee on Finance: "Medicare Physician Payment Reform After Two Years: Examining MACRA Implementation and the Road Ahead"

Wednesday, May 8, 2019: The Senate Finance Committee held a hearing to evaluate how well the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 is meeting its goals in reforming physician payments and to discuss ways to improve the law’s implementation. Find witness testimonies, live feed and other information here.

Why this is important: The hearing examined the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 and assessed how well that reform legislation is meeting its goals of improving quality of care and value for taxpayers. Ranking Member Ron Wyden (D-OR) said that the committee was concerned about how rural areas will fit with respect to innovative payment models moving forward.

House Committee on Appropriations: "Full Committee Markup of FY2020 Labor, Health and Human Services, Education, and Related Agencies"

Wednesday, May 8, 2019: The House Committee on Appropriations held a markup to consider the Report on the Suballocation of Budget Allocations for FY 2020 and Full Committee Markup of the Labor, Health and Human Services, Education Appropriations Bill. Find a summary of the markup here.

House Committee on Energy and Commerce: "Lowering Prescription Drug Prices: Deconstructing the Drug Supply Chain"

Thursday, May 9, 2019: The House Committee on Energy and Commerce held a hearing on the drug supply chain, including drug manufacturers, pharmacy benefit managers (PBMs), insurers, hospitals, pharmacies and patients—all represented by the witnesses testifying. The purpose of the hearing was to discuss the root causes of high prescription drug costs, how prices are set and how each supply chain member can help lower prices. Find witness testimonies, live feed and other information here.

Why this is important: Witnesses from the pharmaceutical industry cited pharmacy benefit managers (PBMs) and the current rebate structure for high drug prices as part of the problem. PBM representatives called on the manufacturers to lower their list prices. The same debate took place in previous hearings in efforts to lower prescription drug prices.


House Passes Bill to Protect Preexisting Conditions and More to Come This Week

On May 9, the House approved H.R. 986, the Protecting Americans with Preexisting Conditions Act, in a vote of 230-183 that sought to reverse guidance issued by the Trump administration to loosen restrictions on states’ abilities to waive certain requirements of the Affordable Care Act (ACA). House Democrats argued that the administration’s guidance weakened protections for people with preexisting conditions by exempting short-term and association health plans from certain standards set by the ACA.

  • H.R. 986 – The Protecting Americans with Preexisting Conditions Act, introduced by Rep. Ann Kuster (D-NH), Rep. Don Beyer (D-VA) and Rep. Joe Courtney (D-CT), rolls back the administration’s expansion of short-term health plans and increases subsidies for ACA marketplace consumers. Find the bill here.

House Majority Leader Steny Hoyer (D-MD) announced the House will vote on legislation that combines drug pricing and Affordable Care Act (ACA)-related bills this week. The bundle, H.R. 987, the MORE Health Education Act, includes seven bills:

Drug-Pricing Bills:

  • H.R. 965 – The Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act, a ban on pay-for-delay settlements and a measure to discourage abuse of 180-day exclusivity for first generic applicants.
  • H.R. 1499 – The Protecting Consumer Access to Generic Drugs Act that makes future pay-for-delay settlements between brand and generic drug manufacturers illegal.
  • H.R. 938 – The Bringing Low-cost Options and Competition While Keeping Incentives for New Generics (BLOCKING) Act of 2019 discourages the practice, sometimes used by first generic applicants, of parking the drug with 180-day exclusivity to keep other generics off the market.

ACA-Related Bills:

  • H.R. 1385 – The State Allowance for a Variety of Exchanges (SAVE) Act 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 provides $100 million annually for the Federally Facilitated Marketplace (FFM) navigator program. The bill reinstates the requirement that there be at least two navigator entities in each state and requires 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 also prohibits 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.
  • H.R. 987 – The Marketing and Outreach Restoration to Empower (MORE) Health Education Act of 2019 restores outreach and enrollment funding to assist consumers in signing up for health care.
  • H.R. 1010 – A bill to provide that the rule entitled “Short-Term, Limited Duration Insurance” shall have no force or effect, reverses the Trump administration’s expansion of junk insurance plans, also known as short-term, limited-duration insurance plans.

House Passes Two Bill to Improve Prescription Drug Databases

On May 9, the House unanimously passed two bills aimed at increasing the accuracy and transparency of the FDA’s Orange Book and its Purple Book databases, H.R. 1503, the Orange Book Transparency Act of 2019, and H.R. 1520, the Purple Book Continuity Act of 2019. The bills were passed in the House by bipartisan votes of 422-0 and 421-0, respectively.

  • H.R. 1503 – The Orange Book Transparency Act of 2019, introduced by Rep. Robin Kelly (D-IL), makes changes to the Food and Drug Administration’s (FDA) “orange” book to provide better information on brand drug and patent exclusivity. Find the bill here.
  • H.R. 1520 – The Purple Book Continuity Act of 2019, introduced by the Energy and Commerce Health Subcommittee Chair Anna Eshoo (D-CA), updates the FDA’s “purple” book on patents and exclusivity for biologic medicines. Find the bill here.

CBO Releases Report on Single-Payer Health Care System Designs

At the request of House Budget Committee Chair John Yarmouth (D-KY), the Congressional Budget Office (CBO) created a report on design considerations and consequential factors of the single-payer health care debate. This report was released on May 1. The report provides Congress with a neutral framework for approaching single-payer proposals. While CBO’s assessment explicitly refrains from specifics, it did outline factors to consider, and possible issues faced, when designing, implementing or transitioning to single-payer health care.

Key considerations to note:

  • The report addresses whether or not unauthorized immigrants would be eligible for universal health care coverage, a population that averaged 11 million people per month in 2018.
  • A public plan means increased cost and provides a specified set of health care services to all eligible enrollees, meaning participants would not have a choice of insurer or health benefits like those that they do now.

Find the full report here.


President Trump Says U.S. Will Allow State Rx Imports If They Save Money

On May 9, President Trump said that his administration would allow prescription drug importation from foreign countries if the programs would create significant cost savings. He also said the administration will allow states to import prescription drugs if they can buy them at a substantially lesser price. Under current law, the Department of Health and Human Services (HHS) has the authority to allow drug imports if the HHS secretary certifies the imported drugs are safe and will save Americans money

Trump Administration Presses Congress to Act on Surprise Medical Bills

On May 9, the White House asked Congress to act to curb surprise medical bills and said it would support a solution that protects the patient in both emergency situations and when a facing a surprise bill after scheduling an in-network procedure. While laying out a set of guiding principles for the issue, the Trump administration said they are not enthused by the idea of an arbitration process, but they would work with Congress going forward. Senate Health Committee Chair Lamar Alexander (R-TN) stood beside President Trump as the administration’s plan was introduced, and told the president that the Senate would send a plan to the Oval Office by July of this year.

CMS: RFI to Spur State Interest in Eased 1332 Waiver Criteria

On May 3, the Centers for Medicare and Medicaid Services (CMS) and the Department of the Treasury released a request for information (RFI) asking for ideas on how to entice states to apply for Affordable Care Act 1332 waivers that take advantage of the more-flexible criteria set by the Trump administration last fall. Only eight states requested waivers under the Obama administration era’s guidance and all but one of those was to create a state-based reinsurance program. No states have requested waivers under the Trump administration’s updated guidance so far.

Find the RFI here.


Next Hearing in Short-Term Plans Lawsuit Scheduled for May 21

On May 3, federal D.C. District Court Judge Richard Leon announced that arguments will be heard on May 21 in the ongoing lawsuit to overturn the Trump administration’s expansion of short-term health plans. The lawsuit, Association for Community Affiliated Plans, et al. v. United States Department of Treasury, et al., includes seven stakeholders asking the court to suspend the short-term term health insurance rule, arguing it is arbitrary and an overreach of administrative authority.

Federal Asks CMS to Revisit 340B Pay Cuts from 2018, 2019

On May 6, federal D.C. District Court Judge Rudolph Contreras gave the Centers for Medicare and Medicaid Services (CMS) the first attempt to craft an appropriate remedial measure to fix the cut to hospitals’ pay for 340B drugs included in both the 2018 pay rule and the 2019 rule. The court ruled that CMS did not have authority to put forward the cuts in either regulation, and Judge Contreras’ opinion noted that CMS exceeded its authority in the 2019 outpatient hospital pay rule as it had in the 2018 rule.

In Dec. 2018, the court ruled that CMS did not have the authority to reduce reimbursement by nearly 30 percent for Part B drugs bought through 340B in 2018. Because that 2018 policy is budget neutral, as is the 2019 policy, the court asked hospitals and CMS to explain how to proceed and avoid repercussions of eliminating the 2018 pay rule on a retrospective basis.

Trump Administration Files Formal Request to Strike Down Entire Affordable Care Act

On May 1, the Trump administration formally declared its opposition to the entire Affordable Care Act (ACA), arguing in a federal appeals court filing that the law was unconstitutional and should be struck down, a position the Department of Justice (DOJ) took in March.

The formal announcement mirrored the switch from the first position taken by the administration, where some portions of the law, including the provision allowing states to expand their Medicaid programs, remained constitutional.

Final Regulations

FDA Finalizes Guidance on Interchangeable Biologics

On May 10, the Food and Drug Administration (FDA) finalized guidance on interchangeable biologics in an attempt to make it easier for biosimilar manufacturers to develop, and for patients to be able to purchase, more affordable prescription drugs. According to the final guidance, interchangeable biologics are now automatically substituted at the pharmacy counter like a generic drug. Once an application or supplement seeking licensure as an interchangeable product is submitted, the FDA will approve the biological product as interchangeable with the reference product if the information submitted in the application or the supplement is sufficient to meet the applicable statutory standard.

Find the final guidance here.

CMS Finalizes Rule to Protect Medicaid Provider Payments

On May 2, the Centers for Medicare and Medicaid Services (CMS) released the Medicaid Provider Reassignment Regulation final rule removing a state’s ability to divert portions of Medicaid provider payments to third parties outside of the scope of what the statute allows. The intention of the final rule is to ensure that providers receive their complete payment, and that any circumstance where a state redirects part of a provider’s payment is clearly allowed under the law.

Find the final rule here.

Proposed Regulations

CMS: Fiscal Year (FY) 2020 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Acute Care Hospital (LTCH) Prospective Payment System

On April 23, 2019, the Centers for Medicare and Medicaid Services (CMS) proposed to update Medicare payment policies for hospitals under the Inpatient Prospective Payment System (IPPS) and the Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) for fiscal year 2020. The proposals include a raise in pay for low-wage hospitals by cutting pay for high-wage hospitals, as part of the reforms to the hospital wage index, as well as raising the add-on pay for new technology and providing a path for breakthrough devices approved by the Food and Drug Administration (FDA) to access add-on payments. CMS also proposed policy changes to increase significantly Medicare pay to hospitals for administering expensive chimeric antigen receptor T-cell (CAR-T) cancer drugs and make it easier for hospitals to get the maximum possible reimbursement for administering the CAR-T cell therapies.

The bundled proposals will be published on May 3, 2019 here.

Find the unpublished proposed rule here.

CMS Proposes Fiscal 2020 Pay Rates for Inpatient Psychiatric Facilities

On April 17, 2019, the Centers for Medicare and Medicaid Services (CMS) proposed to modify the market basket used to calculate inpatient psychiatric facility payments. The rule would use 2016 instead of 2012 as a base year and add a new claims-based measure to the Inpatient Psychiatric Facility Quality Reporting Program starting in FY 2020.

The proposal increases Medicare payments to inpatient psychiatric facilities by 1.7 percent in fiscal year 2020 while adding a new quality measure intended to assess whether patients with certain diagnoses are filling their prescriptions after being discharged from such facilities.

Comment period ends on June 17, 2019.

Find the proposed rule here.

CMS Proposes Boosting Payments to Inpatient Rehabilitation Facilities

On April 17, 2019, the Centers for Medicare and Medicaid Services (CMS) proposed a rule to update Medicare payment policies for facilities under the Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS) and the Inpatient Rehabilitation Quality Reporting Program (IRF QRP) for fiscal year (FY) 2020.

CMS is proposing to raise the estimated payments per discharge for inpatient rehabilitation facilities in federal fiscal 2020 by 2.3 percent, or $195 million, compared to 2019. The proposal could boost payments in urban areas by 2.2 percent and rural areas by 4.3 percent compared to the year before.

Comment period ends on June 27, 2019.

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 June 3, 2019.

Read the proposed rule and submit comments 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.


GAO: Drug Policy – Assessing Treatment Expansion Efforts and Drug Control Strategies and Programs

On May 9, the Government Accountability Office (GAO) released a report on the work to access treatment for Americans who are addicted to or misuse opioids, including efforts by the Office of National Drug Control Policy (ONDCP). The GAO found that while the Department of Health and Human Services (HHS) established performance measures with targets to increase the number of prescription medication-assisted treatment (MAT) medications, HHS has not yet fully implemented this recommendation.

The GAO previously recommended that HHS establish performance measures with targets to better gauge progress toward achieving goals to expand access to MAT. HHS concurred and has taken some steps to address the recommendation.

Find the full report here.

CBO: Exchange Market Will Shrink, But Remain Stable Through 2029

The Congressional Budget Office (CBO) released a report on May 2, on federal health expenditures for the under 65 population, concluding that the health insurance exchange population is expected to fall from 14 million in 2019 to 11 million in 2029, but the marketplace will remain stable largely due to subsidies that shield many enrollees from premium increases. The CBO’s report predicts that about 30 million people will be uninsured in 2019 and that number will grow to 35 million by 2029. About 7 million people fewer people will be insured in 2019 than if the individual mandate penalty had not been repealed, including 4 million fewer in the individual market, 2 million fewer in Medicaid/CHIP and 1 million fewer in employer-sponsored coverage.

ONDCP: Drug Policy Will Reduce Overdose Deaths by 15 Percent in 5 Years

On May 3, the White House Office of National Drug Control Policy (ONDCP) reported that its national drug policy strategy will reduce drug overdose deaths by 15 percent in five years, two months after a Government Accountability Office (GAO) report said the strategy lacked key information. The goal of the strategy is to reduce the size of the drug-using population by preventing initiates to illicit drug use through education and evidence-based prevention programs; reducing barriers to treatment services so that access to long-term recovery is available for those suffering from substance use disorder; and reducing the availability of these drugs through law enforcement and cooperation with international partners to lessen the negative effects of drug trafficking.

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

Stephanie Kennan, Senior Vice President
Mariam Eatedali, Research Associate

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