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This Week:
1. Congress
House of Representatives
Senate
- Track and Trace Teed Up For Lame Duck?
- HELP Committee Seeks Information on Meningitis Outbreak
- Hatch, Coburn Ask HHS for Fraud Effort Details
2. Administration
Health and Human Services (HHS)
Centers for Medicare and Medicaid Services (CMS)
Food and Drug Administration (FDA)
3. State Activities
4. Regulations Open for Comment
5. Reports
Government Accountability Office (GAO)
Health Affairs
Research!America
Kaiser Commission on Medicaid and the Uninsured and Health Management Associates
National Association of Public Hospitals and Health Systems
Urban Institute
AdvaMed
Georgetown University Health Policy Institute’s Center for Children and Families
Association of American Medical Colleges (AAMC)
Urban Institute / Kaiser Family Foundation’s Commission on Medicaid and the Uninsured
1. Congress
House of Representatives
Ways and Means Joins Subpoena Bandwagon
As a second follow-up to a letter sent in May by Oversight Subcommittee Chairman Boustany (R-LA) requesting information on HHS’s use of taxpayer dollars for public relations and advertising activities, Ways and Means Committee Chairman Camp (R-MI), joined by Boustany,sent a letter to Secretary Sebelius last week indicating their frustration at the lack of a response from the Department. According to the letter, “The department’s failure to provide a single responsive document to the committee’s reasonable requests leaves only two possibilities: Either the department is unable to keep track of the work products it buys with taxpayer dollars or the department is trying to delay any response until after this year’s election.” As a result, Camp and Boustany indicated in this most recent correspondence that a failure on the part of HHS to produce documents by Oct. 31 could result in a subpoena from the committee. It’s the third subpoena threat pertaining to the health law from House Committees in recent weeks. Oversight and Government Reform Chairman Issa (R-CA) issued his first subpoena last week, and he’sleft open the possibility of subpoenaing the IRS for documents related to health insurance exchanges.
Concerns Raised Over Level of Arsenic in Rice
Last week, Reps. Waxman (D-CA) and DeGette (D-CO)sent letters to eight companies that make rice products, asking for documents on how they monitor arsenic in their products and what they know about the possible health effects of the carcinogen. Recent studies have detected elevated levels of arsenic in rice and a variety of rice products. The FDA is currently analyzing rice samples to better understand the levels of arsenic exposure and associated health risks.
Senate
Track and Trace Teed Up For Lame Duck?
Last week, the Senate HELP and House Energy and Commerce Committeesreleased a discussion draft of a plan to renew talks regarding the establishment of a nationwide “track and trace” program to help address quality and supply problems associated with the country’s pharmaceutical distribution system, with indications that Members intend to press forward with legislation by the end of the year. While track and trace policies were considered over the summer prior to the enactment of legislation to reauthorize FDA’s user fee program, discussions were shelved after negotiators failed to reach agreement on a number of controversial issues, including national pharmaceutical wholesaler licensing standards and whether pharmacists would be required to verify and keep records of the pedigree of each filled prescription. Committee staff are accepting written comments on the draft language until 6 p.m. on Nov. 7.
HELP Committee Requests Information on Meningitis Outbreak
With the number of deaths related to an outbreak of fungal meningitis now at 24, Senators overseeing drug safety and control policies continue to investigate what went wrong at a Massachusetts compounding pharmacy prior to the distribution of potentially thousands of compromised doses of a steroid used to treat back pain. Most recently, Senate HELP Committee members, led by Chairman Harkin (D-IA) and Ranking Member Enzi (R-WY)sent letters to the New England Compounding Center, the Massachusetts Board of Pharmacy and the FDA seeking information regarding how the outbreak occurred and what warning signs may have existed to inform the committee’s oversight of this situation, and to assist in efforts to determine if further federal authorities are needed. Last week, the Massachusetts Board of Pharmacy permanently revoked the license of the New England Compounding Center, the facility implicated in a nationwide outbreak of fungal meningitis.
GOP Senators Question HHS Use of “Predictive Analytics”
Last week, Senate Finance Committee members Hatch (R-UT) and Coburn (R-OK)sent a letter to HHS Inspector General Levinson requesting documents related to a new system of “predictive analytics” that CMS is using to detect Medicare fraud. CMS was required to estimate savings from its use of predictive analytics and then certify that estimate with the inspector general. According to the letter, “Given the high level of interest in this report and the importance of the results as an indicator of future use and reliance of these efforts, we are very interested in obtaining more information concerning HHS-OIG’s review of the report and validation of its findings.” The senators asked the inspector general’s office for documents it used to evaluate CMS’s projection, with a response requested by Nov. 2.
2. Administration
HHS
Administration Touts “Donut Hole” Savings
According to anannouncement last week by HHS Secretary Sebelius, 5.6 million seniors and people with disabilities have saved $4.8 billion on prescription drugs since the enactment of the Affordable Care Act (ACA). The number includes 2.3 million people in the Medicare prescription drug coverage gap known as the “donut hole,” who have saved an average of $657.
HHS Announces Anti-Fraud Priorities for 2013
In awebcast posted last week, HHS-OIG officials said billing issues tied to the broader adoption of electronic medical records will be a priority for its 2013 work to address fraud in the Medicare program. The office also said it would review CMS oversight of contractors and outside auditors, the care beneficiaries receive in post-acute care settings and how CMS handles “poor performing” nursing homes. “Electronic medical records can improve quality of care and efficiency and help us uncover cases of fraud and abuse,” said Inspector General Daniel Levinson. “At the same time, we must guard against the use of electronic records to cover up crimes. We must also be alert to cybersecurity threats. Targets can include medical records and also online payment systems.”
CMS
Staff Change at Center for Consumer Information and Insurance Oversight
Tim Hill, deputy director of the Center for Consumer Information and Insurance Oversight (CCIIO), announced last week he is leaving the office after having served a year and a half. While Hill will remain at CMS, focusing now on insurance market reforms and the Administration’s efforts to combat fraud in government health care programs, the move is significant as Hill previously oversaw work being done by states deciding whether to run their own exchange. Those decisions face a Nov. 16 deadline.
FDA
FDA Releases List of New England Compounding Pharmacy Customers
In the wake the recent fungal meningitis outbreak, FDA has published a list of health care providers that have purchased drugs from the New England Compounding Center (NECC) since May 21, when the first lot of steroid injections linked to the fungal meningitis outbreaks was produced. The release identified customers in more than 40 states, and was accompanied by a separate list of products sold by NECC. For more information, or to view a list of the customers and products sold,click here.
Last week, the FDA alsoreleased a report detailing its findings linked to inspections conducted earlier this month of NECC, the company that produced the contaminated drugs linked to the deadly fungal meningitis outbreak, which to date has infected more than 300 people and killed 24.
3. State Activities
Pursuant to a statutory requirement under state law, the Washington Health Benefit Exchange Board recommended a financing plan to the legislature as part of adraft report it recently issued. According to the board, the best option is a 1 percent tax on statewide health plan revenues starting the second quarter of 2014. The least desirable option, according to the draft, is a service charge on just health plans selling in the exchange.
States Looking at Methods of Curbing Employee Health Costs
According to an issue brief released Oct. 25 by the National Governors Association, states are considering a variety of approaches to addressing rising employee health care costs. Among other things, states are offering wellness programs and incentives for state employees to improve health outcomes by preventing chronic diseases and reducing treatment costs and are introducing new health benefit plans such as high-deductible or consumer-driven health plans, plans designed to maximize the value of expenditures and plans that offer tiered or limited provider networks. “States are addressing rising health care costs in their state employee benefit programs in a variety of innovative ways,” Connecticut Gov. Dan Malloy (D) said in a statement from NGA. For a the full report, click here.
4. Regulations Open for Comment
FDA Unique Device Identifier (UDI) Rule
The FDA will accept comments on theproposed rule to implement a Unique Device Identifier system for medical devices distributed in the United States. Comments on the proposed rule will be accepted either electronically or written until Nov. 7, 2012.
5. Reports
Government Accountability Office (GAO)
Medicare Part D Discount Program Effects and Brand-Name Drug Price Trends
As part of Medicare’s Part D Coverage Gap Discount Program (Discount Program), CMS oversees the provision of discounts by plan sponsors to eligible beneficiaries when they purchase brand-name drugs and monitors that discounts are paid for by drug manufacturers. As part of the results of a recent review, GAO found that the prices for high-expenditure brand-name drugs used by beneficiaries in the coverage gap and by those who did not reach the gap in 2011 increased at a similar rate before and after the Discount Program was implemented in January 2011. Specifically, from January 2007 to December 2010, before the Discount Program began, the median price for the basket of 77 brand-name drugs (weighted by the utilization of each drug) used by beneficiaries in the coverage gap increased 36.2 percent. During the same period, the median price for the basket of 78 brand-name drugs used by beneficiaries who did not reach the coverage gap increased 35.2 percent. From December 2010 through December 2011, the first year with the Discount Program, the median price for the two baskets increased equally by about 13 percent, the greatest increase in median price for both baskets compared to earlier individual years. For the full report, click here.
Health Affairs
Rx Drug Costs Declined 2006-2009
Arecent study by Health Affairs showed that from 2006 to 2009, the proportion of people under 65 who spent more than 10 percent of their income on health stayed steady because of less spending on prescription drugs. “Despite decreased family income and rising unemployment caused by the recession of 2007-2009, the percentage of people under age 65 with high medical cost burdens remained largely unchanged between 2006 and 2009, at approximately 19 percent. That unexpected result, based on data from the Medical Expenditure Panel Surveys, contrasts with an increase from 14.4 percent to 19.2 percent in the share of people with high medical cost burdens between 2001 and 2006.” Peter Cunningham, the author of the study, attributes the decline to an increase in the use of generic drugs.
Research!America
Arecent report from Research!America claims research spending declined by $4 billion from fiscal year 2010 to fiscal year 2011, the first year-over-year drop since 2002, when Research!America began compiling data. “Insufficient funding, coupled with deep budget cuts under sequestration, could be devastating for research,” said former Rep. John Porter, Research!America’s chairman. Total government research spending in FY 2011fell to $39.5 billion, down from $45.9 billion the previous year. On the other hand, private research funding ticked up slightly, to $77.6 billion, over the same period.
Kaiser Commission on Medicaid and the Uninsured and Health Management Associates
According to the Kaiser Commission on Medicaid and the Uninsured and Health Management Associates, the rate of growth in Medicaid spending is near record lows, despite a slight increase in enrollment.The report, based on a survey of state Medicaid directors found that though program enrollment grew by 3.2 percent, state efforts to control cost through activities such as expanding managed care were effective in combating cost increases. Moreover, it found states are expecting a slightly larger spending increase in fiscal year 2013.
National Association of Public Hospitals and Health Systems
Hospital Cuts Worse Than Previously Expected
The National Association of Public Hospitals and Health Systemsreleased an analysis projecting that hospitals could be exposed to much-higher-than-expected uncompensated care costs through the rest of the decade as a result of the Supreme Court’s decision to make optional the Medicaid expansion provided for under the ACA optional. According to the report, “Using data from various nationally recognized sources, the National Association of Public Hospitals and Health Systems (NAPH) projects hospitals will see $53.3 billion more uncompensated care costs by 2019 than originally estimated when lawmakers approved the Affordable Care Act (ACA).” The hospital association used the analysis to call on Congress to restore the ACA’s cuts to disproportionate share hospital payments, which go into effect in 2014. “NAPH is ready to work with lawmakers to devise a safety net funding policy that ensures access to care for all who need it.”
Urban Institute
Neither RomneyCare Nor ObamaCare Bad for Business
The Urban Institute last weekreleased its analysis of the Massachusetts health reform’s impact on employment. The group found that economic growth was stronger in Massachusetts relative to the rest of the county after the reforms were instituted, and that employer-sponsored insurance rates actually grew. The report concludes, “Given the similarities between Massachusetts’ health reform and the ACA, we would expect the experience in Massachusetts to be broadly predictive of the effects of national reform. However, the impacts of the ACA will vary from those in Massachusetts given the many elements of national reform that differ from reform in Massachusetts, including key aspects of the requirements for employers, and the different circumstances of each state.”
AdvaMed
Medical Devices Not to Blame for Increases in Health Spending
According to areport issued by AdvaMed last week, from 1989 to 2010 spending on medical devices and technology remained a “small and relatively constant” part of national health spending, growing from 5.3 percent to 6 percent. AdvaMed, the medical device industry association, disputes assertions that medical technology is a major driver of health care spending in the country.
Georgetown University Health Policy Institute’s Center for Children and Families
Rate of Uninsured Among Children Declines
According to areport by Georgetown University Health Policy Institute’s Center for Children and Families, 5.5 million children were uninsured in 2011, down from 6.4 million in 2009. While Texas and Oregon led in coverage gains, with 3.1 percent declines in their uninsured child population, Florida was close behind with a 2.9 percent decrease. Conversely, Nevada has the highest child uninsured rate, at 16.2 percent.
Association of American Medical Colleges (AAMC)
Medical School Enrollment Climbs
At a time when concerns of a pending doctor shortage continue to grow, the Association of American Medical Colleges reports an increase of 3.1 percent in the number of medical school applicants, and an increase of 1.5 percent in medical school enrollment. In addition, the applicant pool grew more diverse, according to the report, with gains in every racial and ethnic group. However, AAMC says Congress still needs to lift a 15-year-old cap on residency training to ensure that the boost in enrollment results in a larger pool of doctors. For full report,click here.
Urban Institute / Kaiser Family Foundation’s Commission on Medicaid and the Uninsured
Medicaid Block Grants Would Reduce Insured by 30 Million
According to areport prepared by the Urban Institute for the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured, the House Republican Medicaid block grant plan would cut $1.7 trillion from the program and jeopardize health coverage for more than 30 million people, 17 million because of the ACA repeal and more than 14 million from the lower spending on block grants, by 2022. The authors state, “There would be a reduction in federal spending of $932 billion over the 2013 to 2022 period because of the repeal of the Affordable Care Act and another $810 billion due to the block grant. Together, these cuts represent 38% total reduction in federal spending relative to the baseline spending assuming full implementation of the ACA. By 2022, total reductions total 47%.”
If you have any questions, please contact Stephanie Kennan, Senior Vice President, or Brian Looser, Assistant Vice President, at McGuireWoods Consulting.
Founded in 1998, McGuireWoods Consulting LLC (MWC) is a full-service public affairs firm offering state and federal government relations, national/multistate strategies, infrastructure and economic development, strategic communications and grassroots issue management services. McGuireWoods Consulting is a subsidiary of the McGuireWoods LLP law firm and in 2010 was ranked in the Top 20 of The National Law Journal‘s “The Influence 50,” an annual report of the top public affairs firms in Washington, D.C.
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