Washington Healthcare Update

March 2, 2020

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This week in Washington: Hearings scheduled on the U.S. response to the Coronavirus. 

Upcoming Hearings/Markups

Congress

Hearings/Markups

House

Senate

Administration

Final Regulations/Guidance

Proposed Regulations/Guidance

Courts 

Reports

Upcoming Hearings/Markups

Tuesday, March 3, 2020

Senate Committee on Health, Education, Labor and Pensions (HELP): “An Emerging Disease Threat: How the U.S. Is Responding to COVID-19, the Novel Coronavirus”

The Senate Committee on Health, Education, Labor and Pensions (HELP) will hold a hearing to address the recent concerns surrounding the international spread of coronavirus.

Find more details on the hearing as they become available here.

House Committee on Energy and Commerce, Subcommittee on Health “Combating an Epidemic: Legislation to Help Patients with Substance Use Disorders”

The Subcommittee on Health of the House Energy and Commerce Committee will hold a legislative hearing on the following opioid epidemic-related bills:

  • H.R. 1329, the “Medicaid Reentry Act”
  • H.R. 2281, the “Easy MAT for Opioid Addiction Act”
  • H.R. 2466, the “State Opioid Response Grant Authorization Act”
  • H.R. 2482, the “Mainstreaming Addiction Treatment Act of 2019”
  • H.R. 2922, the “Respond to the Needs in the Opioid War Act” or the “Respond NOW Act”
  • H.R. 3414, the “Opioid Workforce Act of 2019”
  • H.R. 3878, the “Block, Report, And Suspend Suspicious Shipments Act of 2019”
  • H.R. 4141, the “Humane Correctional Health Care Act”
  • H.R. 4793, the “Budgeting for Opioid Addiction Treatment Act”
  • H.R. 4812, the “Ensuring Compliance Against Drug Diversion Act of 2019”
  • H.R. 4814, the “Suspicious Order Identifying Act of 2019”
  • H.R. 4974, the “Medication Access and Training Expansion Act of 2019” or the “MATE Act of 2019”
  • H.R. 5572, the “Family Support Services for Addiction Act of 2020”
  • H.R. 5631, the “Solutions Not Stigmas Act of 2019”

Find more details on the hearing as they become available here.

Wednesday, March 4, 2020

House Committee on the Budget: “Department of Health and Human Services FY 2021 Budget”

The House Committee on the Budget will hold a hearing on the Department of Health and Human Services’ (HHS) FY 2021 budget request, with witness testimony by Deputy Secretary of HHS Eric Hargan.

Find more details on the hearing as they become available here.

Thursday, March 5, 2020

Senate Committee on Homeland Security and Governmental Affairs: “The Federal Interagency Response to the Coronavirus and Preparing for Future Global Pandemics”

The Senate Committee on Homeland Security and Governmental Affairs will hold a hearing to address the recent concerns surrounding the international spread of coronavirus.

Find more details on the hearing as they become available here.

Hearings/Markups

Senate Committee on Appropriations, Subcommittee on Labor, Health and Human Services, Education, and Related Agencies: “Review of the FY2021 Budget Request for HHS”

Tuesday, February 25, 2020: The Subcommittee on Labor, Health and Human Services, Education, and Related Agencies of the Senate Committee on Appropriations held a hearing to discuss HHS’s budget request for fiscal year 2021. Alex Azar, secretary of HHS, served as witness.

Find more details on the hearing here.

Why this is important: HHS Secretary Azar fielded a bipartisan concern regarding the spread of coronavirus in every hearing he attended this week in Congress. In all separate budget hearings, Azar told members of Congress that the spread of coronavirus is contained at the moment, comments that seem to contradict the Centers for Disease Control and Prevention’s (CDC) warnings to prepare for a possible pandemic. Azar told members, however, that more cases of the coronavirus are likely, requesting $2.5 billion in funding to address the outbreak. Azar said the funding would help the U.S. expand surveillance systems for the fast-spreading virus, support state and local governments, help development of vaccines and therapies and expand stockpiles of protective equipment, such as masks.

House Committee on Appropriations, Subcommittee on Labor, Health and Human Services, Education, and Related Agencies: “Department of Health and Human Services (HHS) Budget Request for FY 2021”

Wednesday, February 26, 2020: The Subcommittee on Labor, Health and Human Services, Education, and Related Agencies of the House Committee on Appropriations held a hearing to discuss HHS’s budget request for fiscal year 2021. Alex Azar, secretary of HHS, served as witness.

Find more details on the hearing here.

Why this is important: Facing criticism on the HHS response to the coronavirus outbreak thus far, HHS Secretary Azar said that the risk right now is very low to Americans, and that from a public health perspective, there is technically a state of containment in the U.S. Members also expressed concern over the president’s budget cutting the Medicaid program by $1.5 trillion.

House Committee on Energy and Commerce, Subcommittee on Health: “The Fiscal Year 2021 HHS Budget and Oversight of the Coronavirus Outbreak”

Wednesday, February 26, 2020: The Subcommittee on Health of the Committee on Energy and Commerce held a hearing to address the recent concerns surrounding the international spread of coronavirus and cover the HHS budget request for FY 2021. HHS Secretary Alex Azar gave a witness testimony.

Find more details on the hearing here.

Why this is important: Health subcommittee Chairwoman Anna Eshoo (D-CA) told the committee and HHS Secretary Azar that the Trump administration’s lack of coordination for the coronavirus (COVID-19) outbreak response is on full display. Eshoo reiterated that contradicting statements are being released from the administration and that as such, financial markets are reacting to this lack of trusted information.

House

House Democrats Warn Trump Administration of Potential COVID-19 Drug Price Gouging

On Feb. 26, 46 House Democrats cautioned the Trump administration against awarding companies exclusive licenses for coronavirus drugs (COVID-19) invented with taxpayer money, adding that the administration must ensure a coronavirus vaccine is affordable and accessible.

During a House Energy and Commerce health subcommittee hearing the same day, the Department of Health and Human Services (HHS) Secretary Alex Azar refused to promise that a coronavirus vaccine would for sure be affordable for everyone. Azar said prices of COVID vaccines and treatments are not up to the government to set because the government cannot quickly develop those products without the help of private drug manufacturers.

Senate

Senate Democrats Make a Request for $8.5B in Emergency Coronavirus Funds

On Feb. 26, Senate Minority Leader Chuck Schumer (D-NY) released an appropriations request to provide $8.5 billion in emergency money for fighting the coronavirus. The plan provides $1.5 billion for the Centers for Disease Control and Prevention (CDC), $3 billion for the Public Health and Social Services Emergency Fund, $2 billion to reimburse state and local governments, $1 billion for a U.S. Agency for International Development (USAID) emergency reserve fund and $1 billion for vaccine development at the National Institutes of Health (NIH).

Find the request here.

Administration

FDA, FTC Collaborate to End Biosimilars Misinformation and Increase Competition

On Feb. 3, the Food and Drug Administration (FDA) and the Federal Trade Commission (FTC) announced a collaboration to advance biosimilars adoption, discourage false or misleading communications about biosimilars and deter anticompetitive behaviors.

To begin, a public meeting will be held on March 9, 2020, for input on how to increase competition for biological products.

Find the statement here.

Final Regulations/Guidance

HHS: Strategy on Reducing Burden Relating to the Use of Health IT and EHRs

On Feb. 21, the Department of Health and Human Services (HHS) released a strategy to reduce the regulatory and administrative burden related to the use of health IT, including electronic health records (EHRs). Reflective of public comment, the Strategy on Reducing Regulatory and Administrative Burdens Relating to the Use of Health IT and EHRs targets burdens tied to regulatory and administrative requirements that HHS can directly affect through the rulemaking process. The report is a collaborative effort between the Office of the National Coordinator for Health Information Technology (ONC) and the Centers for Medicare & Medicaid Services (CMS).

The strategy outlines three overarching goals designed to reduce clinician burden:

  • Reduce the effort and time required to record health information in EHRs for clinicians;
  • Reduce the effort and time required to meet regulatory reporting requirements for clinicians, hospitals and health care organizations; and
  • Improve the functionality and intuitiveness (ease of use) of EHRs.

Find the full strategy here.

Proposed Regulations/Guidance

CMS: Comprehensive Care for Joint Replacement (CJR) Model Proposed Extension andChanges

On Feb. 20, the Centers for Medicare and Medicaid Services (CMS) issued a rule that proposes a three-year extension and changes to the episode definition and pricing in the Comprehensive Care for Joint Replacement (CJR) Model. The Model, which is currently scheduled to end on Dec. 31, 2020, aims to reduce expenditures while preserving or enhancing quality of care by supporting better and more efficient care for beneficiaries undergoing the most common inpatient surgeries for Medicare beneficiaries: hip and knee replacements (also called lower extremity joint replacements or LEJR). This rule proposes to change certain aspects of the CJR Model, including incorporating outpatient hip and knee replacements into the episode of care definition, the target price calculation, the reconciliation process, the beneficiary notice requirements, gainsharing caps and the appeals process. Additionally, to allow time to evaluate the proposed changes, the rule proposes to extend the length of the CJR Model for an additional three years, through Dec. 31, 2023, for certain participant hospitals.

Find the proposal rule here.

CMS: Basic Health Program Funding Methodology Proposed Payment Notice for Program Year 2021

On Feb. 10, the Centers for Medicare and Medicaid Services (CMS) published the Basic Health Program proposed federal funding methodology for program year 2021. This document provides the methodology and data sources necessary to determine federal payment amounts for program year 2021 to states that elect to establish a Basic Health Program to offer health benefits coverage to low-income individuals otherwise eligible to purchase coverage through Affordable Insurance Exchanges.

Find the proposed rule here. Public comments are due by March 11, 2020.

CMS: 2021 Medicare Advantage and Part D Advance Notice Part II

On Feb. 5, the Centers for Medicare and Medicaid Services (CMS) released Part II of the Calendar Year (CY) 2021 Advance Notice of Methodological Changes for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies (the Advance Notice). CMS released Part I of the Advance Notice on Jan. 6, 2020. The notice is seeking comment on whether it should develop measures of generic and biosimilar utilization that could be used to calculate a plan’s star rating, so CMS could reward plans that encourage adoption of lower-cost products.

Find the notice here.

CMS will accept comments on all proposals in the Advance Notice through March 6, 2020, before publishing the final Rate Announcement by April 6, 2020.

CMS: Contract Year 2021 and 2022 Medicare Advantage and Part D

On Feb. 5, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule that updates Medicare Advantage (MA or Part C) and the Medicare prescription drug benefit (Part D) program. Medicare Part D plans will be allowed to offer two specialty tiers on their drug formularies starting in 2021. The proposed rule requires that one of the two specialty tiers be a “preferred” tier that offers lower cost sharing for beneficiaries. The maximum allowed cost sharing for the specialty tiers would be between 25 percent and 33 percent, depending on whether the plan includes a deductible.

Drugs that cost $670 a month or more must currently be placed on one specialty tier. Allowing two tier options should give health plans leverage to work with drug manufacturers to get prices lower if the manufacturer wants to price their product at a more accessible cost to patients compared with their competitors. The proposed rule also requires Part D plans to implement by Jan. 1, 2022, a tool that will provide beneficiaries with real-time details on the cost of drugs based on their plan coverage and alternatives.

Find the proposed rule here.

CMS: 2021 Medicare Advantage Advance Notice Part I – Risk Adjustment

On Jan. 6, the Centers for Medicare and Medicaid Services (CMS) released Part I of the 2021 Advance Notice of Methodological Changes for Medicare Advantage Capitation Rates and Part C and Part D Payment Policies (the Advance Notice), which contains key information about proposed updates to the Part C CMS-Hierarchical Condition Categories (HCC) risk adjustment model and the use of encounter data.

Part 1 of the 2021 Advance Notice of Methodological Changes for Medicare Advantage Capitation Rates and Part C and Part D Payment Policies proposes changes to the Part C risk adjustment model and the use of encounter data. Under the proposal, CMS proposes to calculate risk scores for 2021 by using the sum of 75 percent of the risk score calculated with the 2020 CMS-Hierarchical Condition Categories model and 25 percent of the risk score calculated with the 2017 version of the model. For 2020, CMS calculated risk scores using the sum of 50 percent of each model.

CMS also proposed changes to how it uses encounter data, or diagnostic information, in the risk adjustment calculation process. For 2021, CMS wants to calculate risk scores for Medicare Advantage plans by summing 75 percent of the encounter data-based risk score with 25 percent of the Risk Adjustment Processing System-based risk score. For 2020, CMS calculated risk scores using the sum of 50 percent of each type of data.

Find the proposed rule here. Public comments are due by March 6, 2020.

CMS: Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2021

On Jan. 31, the Centers for Medicare and Medicaid Services (CMS) released the proposed annual Notice of Benefit and Payment Parameters Rule for 2021, also known as the proposed 2021 Payment Notice. This is the second year in a row that the proposed rule has been late. 

CMS proposes to maintain the Federally Facilitated Exchange (FFE) user fee rate of 3.0 percent of premium, and the State-based Exchange on the Federal Platform (SBE-FP) user fee rate of 2.5 percent of premium based on the portion of FFE user fee-eligible costs allocated to SBE-FP activities. Alternatively, CMS is considering and seeking comment on reducing the FFE and SBE-FP user fee rate below the 2020 plan year level to reflect estimates of premium increases and enrollment decreases for the 2021 plan year, as well as potential savings resulting from cost-saving measures implemented over the last several years in hopes of reducing the user fee burden on consumers and creating downward pressure on premiums.

CMS is proposing changes to the policy regarding how drug manufacturer coupons accrue towards the annual limitation on cost sharing in response to stakeholder feedback indicating Treatment of Drug Manufacturer Coupons. CMS is proposing to amend current Medical Loss Ratio (MLR) regulations to require issuers to deduct from incurred claims the prescription drug rebates and other price concessions attributable to the issuer’s enrollees and received and retained by an entity providing pharmacy benefit management services to the issuer. CMS also proposes to clarify more generally that issuers must report expenses for services outsourced to or provided by other entities in the same manner as issuers’ expenses for non-outsourced services. These changes would help lower premiums by helping ensure that consumers’ premiums reflect the full benefit of prescription drug rebates and are not artificially inflated by outsourcing expenses.

Find the proposed rule here. Public comments are due by April 6, 2020.

FDA and HHS: Proposed Rule on Canadian Drug Importation Plan

On Dec. 18, the Food and Drug Administration (FDA) and the Department of Health and Human Services (HHS) released a draft guidance on the importation of certain prescription drug imports from Canada, leaving out many specialty medications and other therapies for chronic diseases that cost patients the most. The FDA seeks request for comment on two importation pathways. One would allow states to submit proposals to the FDA to allow the importation of small molecule brand-name medicines sold at retail pharmacies, typically ones that have rebates attached to them. The draft guidance for industry lets manufacturers import the same versions of FDA-approved drugs they now sell in foreign countries. Under this second pathway, drug manufacturers would use a new National Drug Code (NDC) and sell these drugs in the U.S. at a cheaper price.

Find the proposed rule here.

Find the guidance for industry here—comments are due by March 5, 2020.

Courts

Find a comprehensive look at “Courts and Healthcare Policy in 2020” here.

SCOTUS Decides to Review ACA Case

On March 2, the Supreme Court announced it would review Texas v. United States, the case claiming that the Affordable Care Act’s (ACA) individual mandate is unconstitutional and therefore the entire law may be unconstitutional. The question is whether the individual mandate, which the Supreme Court upheld in 2012, became unconstitutional when Congress later took away its tax penalty.

Federal Judges Question DOJ on Medicaid Impact of Public Charge Rule

On Feb. 26, two judges from the U.S. Court of Appeals for the Seventh Circuit voiced concerns about the financial costs and health-related consequences of the Trump administration’s public charge rule. The judges expressed their concerns during oral arguments on the validity of the public charge rule, which tightened the test for when legal immigrants can be denied green cards or visas based on their likelihood of relying on public assistance.

The rule for the first time made the use of Medicaid, as well as other benefits, such as food stamps and housing vouchers, a factor that can prevent an immigrant from obtaining lawful permanent residence in the United States. As of Feb. 24, the rule is in effect.

Reports

GAO: Black Lung Benefits Program – Improved Oversight of Coal Mine Operator Insurance Is Needed

On Feb. 26, the Government Accountability Office (GAO) released a report on needed improvements to oversight of the federal government’s Black Lung Disability Trust Fund. The fund faces financial challenges and has borrowed billions to cover costs. The Trust pays benefits to certain coal miners when no coal mine operator can be held responsible, or when the liable operator does not pay.

Three coal mine operator bankruptcies have strained Trust finances by transferring $865 million in estimated benefit responsibility to the Trust—and more bankruptcies are expected.

The GAO offered three recommendations to the Department of Labor for better oversight of coal mine operator insurance to help limit the federal government’s future financial liability:

  • The director of the Office of Workers’ Compensation Programs should develop and implement procedures for coal mine operator self-insurance renewal that clarifies how long an operator is authorized to self-insure, when an operator must submit its renewal application and supporting documentation, and the conditions under which an operator’s self-insurance authority would not be renewed.
  • The director of the Office of Workers’ Compensation Programs should develop and implement procedures for self-insured coal mine operator appeals that identify timelines for self-insured operators to submit documentation supporting their appeals and that identify a goal for how much time DOL should take to make appeals decisions.
  • The director of the Office of Workers’ Compensation Programs should develop and implement a process to monitor operator compliance with commercial insurance requirements and periodically evaluate the effectiveness of this process. This process should be designed to detect errors and omissions in reporting insurance coverage using complete, accurate and consistently recorded data.

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.

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