Washington Healthcare Update

May 20, 2019

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This week in Washington: House to hold hearings on surprise medical billing, drug pricing transparency and a single-payer health system.

Upcoming Hearings/Markups

Congress

Hearings/Markups

House

Senate

Administration

Courts

Final Regulations

Proposed Regulations

Reports

 

Upcoming Hearings/Markups

Tuesday, May 21, 2019

House Ways and Means Committee: “Protecting Patients from Surprise Medical Bills”
The House Ways and Means committee will hold a hearing on surprise medical billing, following an announcement from the Trump administration urging Congress to focus on the issue.

Related to the subject,  on May 14, House Energy and Commerce Committee Chairman Frank Pallone (D-NJ) and Ranking Member Greg Walden (R-OR) released a draft bill to prohibit surprise charges not only for emergency care when a patient ends up at a hospital that is out of their insurance plan’s network, but also for nonemergency care when the facility might be in-network but certain providers are not. Find witness testimonies, live feed and other information here.

House Committee on Energy and Commerce: “Improving Drug Pricing Transparency and Lowering Prices for American Consumers”

The House Committee on Energy and Commerce will hold a hearing on drug pricing transparency and prescription drug costs, another hearing in a series.

The hearing will discuss:

  • H.R. 2296, the Fair Accountability and Innovative Research Drug Pricing Act or the “FAIR Drug Pricing Act,” sponsored by Reps. Schakowsky (D-IL) and Rooney (R-FL)
  • H.R. 2069, Stopping the Pharmaceutical Industry from Keeping drugs Expensive Act, or the “SPIKE Act,” introduced by Reps. Horsford (D-NV) and Reed (R-NY)
  • H.R. 2087, the Drug Price Transparency Act, introduced by Reps. Doggett (D-TX) and Buchanan (R-FL)
  • H.R. 2115, the Public Disclosure of Drug Discounts Act, sponsored by Reps. Spanberger (D-VA), Arrington (R-TX), and Boyle (D-PA)
  • H.R. 2376, the Prescription Pricing for the People Act of 2019, introduced by Reps. Nadler (D-NY) and Collins (R-GA)
  • H.R. 2064, the Sunshine for Samples Act of 2019, introduced by Reps. Chu (D-CA) and Nunes (R-CA)
  • H.R. 2757, the Creating Lower cost Alternatives for Your prescription drugs Act, introduced by Reps. Cunningham (D-SC) and Bilirakis (R-FL)

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.

TBA
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.

Congress

Hearings/Markups

House Ways and Means Committee: “Overcoming Racial Disparities and Social Determinants in the Maternal Mortality Crisis”

The House Ways and Means Committee held 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.

Why this is important: Approximately 700 women die annually in the United States from pregnancy-related complications, according to the Centers for Disease Control and Prevention (CDC). The CDC’s report included results that showed significant racial/ethnic disparities in pregnancy-related mortality exist.

House

Pallone, Walden Draft Bill to End Surprise Billing

On May 14, Reps. Frank Pallone (D-NJ) and Greg Walden (R-OR), the chairman and ranking member of the Energy and Commerce Committee, respectively, released a draft bill to prevent patients from facing unexpected charges after they go to the emergency room or receive other nonemergency medical care.

The draft legislation follows an announcement from President Trump calling on Congress to end surprise medical bills for Americans. The plan would prohibit surprise charges not only for emergency care when a patient ends up at a hospital that is out of their insurance plan’s network, but also for nonemergency care when the facility might be in-network but certain providers are not. Read the draft bill here.

House Passes Bundled Drug Pricing and ACA-Related Bill

On May 15, the House passed, 234-183  legislation that combines drug pricing and Affordable Care Act (ACA)-related bills. The legislative package, 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.

The amendments that passed despite Republican opposition add specific requirements to the Affordable Care Act’s (ACA) outreach and navigator programs, such as targeting low-income areas and supporting veterans. An amendment from Rep. Donna Shalala (D-FL) blocks the Department of Health and Human Services (HHS) from taking any action to stop silver loading.

There was bipartisan support for Rep. Lucy McBath’s (D-GA) amendment requiring the secretaries of HHS and Education to provide outreach to pharmacy schools about generic drugs, and Rep. Stephen Lynch’s (D-MA) measure requiring the Government Accountability Office (GAO) to conduct a study for any state seeking to implement a public option.

The Senate will likely find opposition to the ACA-related provisions included in H.R. 987, although the bipartisan drug-pricing bills could end up in a larger Senate package.

Senate

Senate Passes Pandemic Preparedness Bill Without OTC Reform Language

On May 16, the Senate passed Sen. Richard Burr’s (R-NC) pandemic preparedness bill, which reauthorizes the hazard preparedness programs at the Department of Health and Human Services (HHS). The Pandemic and All-Hazards Preparedness and Advancing Innovation Act of 2019, unlike its House counterpart, does not include language to reform the Food and Drug Administration’s (FDA) over-the-counter (OTC) monograph regulations. The House will now have to pass a revised version of the bill in order to reconcile it with the Senate bill. Monitor S.1379 here.

Senate Releases Surprise Medical Bills Legislation with Arbitration

On May 16, Sens. Bill Cassidy (R-L) and Maggie Hassan (D-NH) released a bipartisan draft bill to curb surprise billing costs for emergency services. The bill follows an announcement from President Trump calling on Congress to end surprise medical bills for Americans.

The STOP Surprise Medical Bills Act addresses three scenarios in which surprise medical billing (also known as “balance billing”) would be prohibited—emergency services, nonemergency services following an emergency service at an out-of-network facility, and nonemergency services performed by an out-of-network provider at an in-network facility. Find the bill breakdown here.

Wyden Introduces Bill Requiring Plans, Medicare to Create Price Tools

On May 15, Senate Finance Committee Ranking Member Ron Wyden (D-OR) introduced a bill requiring traditional Medicare, Medicare Advantage (MA) plans, Medicare Part D plans and insurance companies to provide information to individual enrollees about the costs, including out-of-pocket costs, of services and prescription drugs via online tools. The bill follows moves by both the Centers for Medicare and Medicaid Services (CMS) and the Office of the National Coordinator for Health IT (ONC) to increase price transparency via electronic health records (EHRs). Monitor S.1497 here.

Administration

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.

Courts

Five AGs File Lawsuit After CMS Final Rule on Medicaid Home Health Unions

On May 13, the attorneys general for California, Connecticut, Massachusetts, Oregon and Washington filed a lawsuit against the Trump administration after the Centers for Medicare and Medicaid Services (CMS) issued a final rule to appeal the ability to deduct union dues from Medicaid payments made to independent home health workers.

Opposition to the rule began with a letter sent by California Attorney General Xavier Becerra in Aug. 2018 to the Department of Health and Human Services (HHS) Secretary Alex Azar, noting concern for the rule when first released.

Final Regulations

CMS Finalizes Drug Pricing Rule, Omits Price Concessions

On May 16, the Centers for Medicare and Medicaid Services (CMS) issued a final rule on the Medicare Advantage and Part D programs. The final rule allows Medicare Advantage plans to negotiate better prices for physician-administered medicines in Part C, and requires Part D plans to adopt tools that provide clinicians with information that they can discuss with patients on out-of-pocket costs for prescription drugs at the time a prescription is written.

CMS omitted the proposal allowing insurers to exclude certain drugs if prices rise faster than inflation. Instead, the final rule leaves in place the current policy about Medicare’s “protected classes” of drugs. Under current law, private Medicare health plans are required to cover all or “substantially all” drugs in six “protected” classes, such as HIV treatments, antidepressants, drugs to treat epileptic seizures and cancer drugs, regardless of cost. The final rule will be published here, on May 23, 2019.

Read the final rule 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.

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.

Proposed Regulations

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

Find the bundled proposals 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 Facility 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 year 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.

Reports

GAO: Medicaid Demonstrations – Approvals of Major Changes Need Increased Transparency

On May 17, the Government Accountability Office (GAO) released a report on Medicaid demonstrations and found that only sometimes do states and the federal government remain transparent about the demonstrations that are proposed or give the public a chance to weigh in. While the report shows transparency has improved, gaps remain, such as the federal government not always requiring states to share the projected effects of proposals, even when they could significantly affect beneficiary eligibility.

The GAO recommends:

  • The Administrator of CMS develop and communicate a policy that defines when changes to a pending section 1115 demonstration application are considered major and should prompt a new review of the application against the transparency requirements applicable to the pending application.

Agency Affected: Department of Health and Human Services: Centers for Medicare and Medicaid Services

  • The Administrator of CMS develop and communicate a policy whereby applications for section 1115 demonstration amendments that may have significant impact are subject to transparency requirements comparable to those for new demonstrations and extensions.

Agency Affected: Department of Health and Human Services: Centers for Medicare and Medicaid Services

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

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