Washington Healthcare Update

July 20, 2015

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This Week: Senate Reauthorizes Older Americans Act; Bill Heads tothe House… White House Holds 2015 Conference on Aging and Launches SeveralNew Administration Healthy Aging Initiatives Enveloping Alzheimer’s,Dementia, Falls Prevention… HHS OIG Report Finds Fraud Prevention System(FPS) Saved $453.9 Million in 2014

1. Congress

House of Representatives


2. Administration

3. State Activities

4. Regulations Open for Comment

5. Reports

1. Congress


Federal “Right to Try” Bill Introduced in the House

On July 9, Reps. Matt Salmon (R-AZ), Paul Gosar (R-AZ) and Marlin Stutzman (R-IN) introduced theRight to Try Act of 2015 (H.R.3012), to provide patients access toinvestigational drugs that have passed the Food and Drug Administration’s (FDA) basic safety testing, but have not yet been fully approved. The billparallels efforts in dozens of states, but goes even further by preventing the FDA from denying access for a terminally ill patient seeking an experimentaltherapy. While FDA’s Compassionate Use program provides access to therapies still under evaluation, the application is seen by many patients and physiciansas cumbersome and time consuming when a terminally ill patient often is diagnosed with months to live. Existing laws in some states reduce the often two-to four-month waiting period under the FDA’s Compassionate Use down to two to four weeks, and eventually two to four days. During fiscal year 2015, the FDAapproved 99.5 percent of the approximately 1,900 exception requests it received. The 21st Century Cures bill, which has passed the House, provides adifferent route by focusing efforts to improve FDA’s existing expanded access program. The Cures provisions, authored by Reps. Michael McCaul (R-TX) andMichael Burgess (R-TX), would require drug companies to increase their transparency when making expanded access decisions.

House Energy and Commerce Hearing Highlights Fraud and Lack of Oversight in the Medicare Part D Program

On July 14, the House Energy and Commerce’s Subcommittee on Oversight and Investigation held a hearing focused on Medicare Part D program integrity. Thishearing was a result of the largest Medicare fraud takedown in history, which occurred last month when the Justice Departmentcharged 243 individuals for participating in fraud schemes involving $172 billion in false Medicare billings. Also in June, the Department of Health andHuman Services Inspector General (OIG) also issued a report highlighting fraud within theprogram, linking some of the fraud to the opioid abuse crisis. The Centers for Disease Control and Prevention issued a report about the growing use and abuse of prescribed painkillers aswell. Several members noted that the Centers for Medicare and Medicaid (CMS) has failed to implement the nine recommendations from the OIG and has been toolenient in its oversight of the program. The members pressed Dr. Agrawal to give them a timeline for completion. Dr. Agrawal explained the technicalchallenges related to oversight, including that CMS cannot interfere with legitimate access to Part D services for beneficiaries. He stated that the CMS ismoving as quickly as possible to implement the OIG suggestions and improve oversight of the Part D program. Ms. Maxwell of the OIG testified that CMS hasmade substantial improvements by closing the loopholes in prescriber screening standards. She noted that the plan sponsors also play a vital role inoversight of the program, but this does not negate the significance of CMS. Dr. Agrawal added that the CMS has been working with plan sponsors to identifyPart D enrollees who have potential opioid overuse, but that there are still patients who genuinely need the drugs as part of their treatment.

Witness List

Ann Maxwell
Assistant Inspector General Evaluation and Inspections
Office of Inspector General
U.S. Department of Health and Human Services

Shantanu Agrawal, M.D.
Deputy Administrator and Director Center for Program Integrity
Centers for Medicare and Medicaid Services
U.S. Department of Health and Human Services

For more information and to view the hearing, please visit energycommerce.house.gov.

GOP House Members Introduce Bill to Allow Provider Utilization of ICD-9 or ICD-10 Codes for rel=”noopener noreferrer” Six-Month Transition Period

Republican Reps. Marsha Blackburn (TN) and Tom Price (GA) have introduced H.R. 3018, the Coding Flexibility in Healthcare Act, which would allowproviders to use either ICD-9 or ICD-10 for a 180-day transition period, as providers make the permanent transition to the new health coding system. Itwould also allow Health and Human Services (HHS) Secretary Sylvia Burwell to extend the glide path for an additional six months if she determines thatproviders need more time, and requires HHS submit to Congress a report assessing the impact of such ICD-10 code sets on health care providers no later than90 days after the final implementation date. “With industry surveys indicating that critical provider partners are behind schedule in deploying billing andelectronic health record software, it is clear that some physicians will have no way to submit ICD-10 codes for payment,” Rep. Blackburn said in a press release. “For this reason, it is critical to establish atransition period which allows the healthcare industry to ease into compliance instead of ‘flipping a switch’ on Oct. 1st. Our legislation will providestability to providers during this difficult transition period by establishing a period of 180 days where providers would be permitted to code in eitherICD-9 or ICD-10.” ICD-10 is a coding system that doctors and hospitals must use starting Oct. 1, 2015. It requires new software and all that entails forimplementation. While larger doctor groups and hospitals are mostly ready, smaller and rural doctor practices need additional time for software vendors tohave them up and running.

Upcoming: House Energy and Commerce Oversight Subcommittee to Hold Hearing on ACA Exchanges

The House Energy and Commerce Subcommittee on Oversight and Investigations, chaired by Rep. Tim Murphy (R-PA), has scheduled a hearing for Friday, July 24,entitled “An Overdue Checkup: Examining the ACA’s State Insurance Marketplaces.” Subcommittee members will hear testimony from several states about theirexperiences implementing the Affordable Care Act (ACA). The hearing will be held at 9:15 a.m. in Room 2123 of the Rayburn House Office Building.

The Majority Memorandum, a witness list and witness testimony will be available at energycommerce.gov as they areposted. A press releaseannouncing the hearing can be found here.


Senate Reauthorizes Older Americans Act; Bill Heads to the House

In a voice vote July 16, the Senate, without amendment, unanimously reauthorized the Older Americans Act, S. 192, a bill that funds programs such as Meals on Wheels,home care support and senior centers through 2018. Noteworthy changes to previous reauthorizations of the bill include the creation of a federal grantprogram for states to enhance elder abuse data collection; updates to the definitions of “adult protective services,” “abuse,” “exploitation and financialexploitation” and “elder justice”; and implementation of best practices in long-term care facility responses to elder abuse and neglect, includingstrengthening ombudsman programs that protect residents of nursing home and other long-term care facilities. The bill, which is sponsored by HELP CommitteeChairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA), Sen. Richard Burr (R-NC) and Sen. Bernie Sanders (I-VT), streamlines federal-leveladministration of programs, promotes effective use of transportation services and improves coordination between programs at the federal, state and locallevels. The reauthorization also adjusts the formula that allots state grants to account for geographic changes in the older population.

The Older Americans Act has been due for reauthorization since 2011 and has until this year been funded through continuing resolutions. The bill now movesfor approval in the House of Representatives, where Reps. Bobby Scott (D-VA) and Suzanne Bonamici (D-OR) are sponsoring the House reauthorization bill.

Bill Funding FDA Passes Out of Senate Appropriations Committee

The Senate Committee on Appropriations approved theFY2016 Agriculture, Rural Development, Food and Drug Administration (FDA), and Related Agencies Appropriations billon July 16 in a bipartisan 28-2 vote. The bill includes $148.3 billion for agricultural and rural development, food safety, public health and nutritionprograms, and provides for FDA an additional $40 million over the previous fiscal year. The bill provides more than $2.6 billion in discretionary fundingfor the FDA, $40 million over the FY 2015 enacted level, and a $45 million increase was provided for food safety activities authorized in the Food SafetyModernization Act (FSMA), which is more than $60 million short of the President’s Budget. The appropriators also provide a $3 million increase forantibiotic resistance research and programming, and an increase of $2 million for FDA’s efforts under the Precision Medicine Initiative, which also fallshort of the president’s budget request. Overall, total FDA funding, including user fee revenues, is $4.6 billion, which is $116 million above FY 2015.Within this total, a $45 million increase is provided for food safety activities and a $5 million increase is included for medical product safetyactivities. Democrats worry the bill does not provide the requested funds for implementing the FDA Safety and Innovation Act, a bill that provides theoversight of drug compounding facilities and evaluates more sunscreens. A fact sheet containing a summary of the Senate’s FY 2016 Agriculture, RuralDevelopment, Food and Drug Administration (FDA), and Related Agencies Appropriations bill can be found here.

Senate Companion for 21st Century Cures Bill Not Expected for Months

The House’s passage of the 21st Century Cures bill on July 10 has not jumpstarted the drafting of the Senate companion in the Help, Employment, Labor, andPensions (HELP) Committee. As it stands, the HELP Committee has five working groups convening weekly on elements of the bill but HELP’s legislation isstill months from being finished. HELP Chairman Lamar Alexander (R-TN) said he doesn’t expect a final bill to get a floor vote before early 2016, and it’slikely that the Senate version will be significantly different than the House bill. Key components that make HELP’s Cures counterpart bill craftingdifferent include an absence of CMS provisions (as this jurisdiction rests with the Finance Committee) and a lack of access to the Strategic PetroleumReserve, one of the main funding sources under the House version, which is at the discretion of the Commerce, Science, and Space Committee. The Committeecould pass legislation with provisions for discretionary funding and then go to a bicameral conference, where more options exist for funding negotiations.In the meantime, the Committee opted to continue its focus on five more hearings centered on its “innovation initiatives,” which include three that havetouched on the implementation of the electronic health record requirements.

Senators Send Bipartisan Letter to GAO Asking Agency to Examine Quality of Care for Medicaid Beneficiaries in Assisted Living Facilities

Senators Elizabeth Warren (D-MA), Orrin Hatch (R-UT) and Aging Committee leadership Susan Collins (R-ME) and Claire McCaskill (D-MO) sent a letter to Gene L. Dodaro, Comptroller General of the GeneralAccountability Office (GAO), requesting the agency develop a report on the oversight of and quality of care provided to Medicaid enrollees at assistedliving facilities. “Given the growth in federal Medicaid spending for long-term care services and expected program growth caused by the aging and expansionof the population and program, information to understand federal and state spending and oversight of care provided in these settings is needed,” thesenators wrote. Currently, the federal government oversees and monitors care provided to Medicaid and Medicare recipients in nursing facilities. However,assisted living oversight is within the purview of the states, which have varying standards and definitions of what assisted living is. The senators’letter asks GAO to investigate the number of Medicaid enrollees in assisted living facilities and the level of federal spending for their care, andrequests details on state Medicaid coverage for assisted living facilities. The letter also requests information about federal and state oversight of careprovided to Medicaid enrollees in assisted living facilities, and how it may differ from the oversight of care provided in skilled nursing facilities.

A press release on the letter can be found here.

Senate Commerce Subcommittee Holds Hearing to Incentivize Cure Development Research

On July 14, the Senate Commerce, Science and Transportation Subcommittee on Space, Science and Technology held a hearing entitled “Unlocking the Cures forAmerica’s Most Deadly Diseases,” to address the trend of lagging biomedical research and innovation in the United States. The hearing focused on howCongress can make the Food and Drug Administration (FDA) more inclined to catalyze medical innovation instead of instituting barriers to restrain it andhow to find discernable ways to properly fund potential breakthroughs through public and private means. A witness at the hearing, physician and former Sen.Tom Coburn (R-OK), who has been critical of government spending in the past, urged Congress to be more supportive of the FDA. He said that the agency needsto be reformed, but cannot do so without proper funding and less criticism from his Republican colleagues. “[The FDA’s] underlying motto is never do what’sbest, when you can do what’s safe. And I don’t blame them because the criticism is so severe,” the former senator told the panel. Another witness, Dr.Keith Yamamoto of the University of California, said only federal agencies have the resources to back massive improvements in precision medicine—whichtargets diseases and tracks genes through direct manipulation of cells—and that private funding will follow the government’s lead. The panel also discussedprivate sector solutions, like instituting a monetary prize system for innovation and bringing together interdisciplinary researchers from different fieldsto multilaterally address problems. In recent years, U.S. biomedical research and development expenditures in the private sector have declined by almost$13 billion. The hearing comes after the House passed the 21st Century Cures Act last week to boost funding for the National Institutes of Health (NIH) andimplement reforms at the FDA.

Witness List

Hon. Tom Coburn, M.D.
Former United States Senator (R-OK)

Mr. Christopher Frangione
Vice President
Prize Development, XPRIZE

Mr. Peter Huber
Senior Fellow
Manhattan Institute

Dr. Keith Yamamoto
Vice Chancellor for Research
University of California

For more information or to view the hearing, please visitcommerce.senate.gov.

Senate Passes Bill to Permanently Allow Medicaid, SSI Beneficiaries to Participate and Receive Compensation in Clinical Trials

With a unanimous vote, the Senate passed the Ensuring Access to Clinical Trials Act of 2015, S.139, on July 16. Thelegislation makes permanent an existing provision that allowed those citizens who receive Supplemental Security Income (SSI) or Medicaid benefits toparticipate in clinical trials without jeopardizing their benefits. Moreover, the bill allows participants to discount up to $2,000 of income received fromparticipating in these trials from SSI or Medicaid income calculations. Previously enacted legislation from 2010 expired in 2015 and required the effectsof the bill be reviewed and studied. The Government Accountability Office (GAO) released a report lastfall stating that they could not find any negative aspects to the 2010 law. Before the 2010 law, beneficiaries feared compensation would make themineligible for benefits. Researchers applauded the bill as well, as they continue to recruit patients in niche patient populations. Seventy-six of thelargest patient, industry, academic and medical organizations joined together to support the Ensuring Access to Clinical Trials Act. Sens. Wyden (D-OR),Hatch (R-UT), Brown (D-OH) and Markey (D-MA) led the legislative efforts in the Senate. Going forward, the bill now moves to the House of Representatives,where a companion bill was introduced in January by Rep. Lloyd Doggett (D-TX)

Former Bush Officials Send Letter Urging Senate to Confirm Slavitt as Permanent CMS Administrator

On July 15, all the former Administrators of the Centers for Medicare and Medicaid Services (CMS) under the George W. Bush Administrationsent a letter toSenate and Finance Committee leadership in support of President Obama’s nomination of Andy Slavitt as permanent CMS Administrator. The President choseSlavitt, who has been running the agency as acting administrator, to replace Marilyn Tavenner, who stepped down in February to lead America’s Health andInsurance Plans (AHIP) as president and CEO. Senate Republicans Orrin Hatch (UT) and Chuck Grassley (IA), however, have expressed concerns over ActingAdministrator Slavitt’s potential conflicts of interest from when he was employed with Healthcare.gov IT contractor Optum. In addition, Senator Hatchexpressed at a July 16 hearing on the recent GAOaudit of healthcare.gov that CMS’s unwillingness to comply with the Government of Accountability Office (GAO) recommendations will cast a shadow over hisnomination. In a separateJuly 14 letter officials who led the HHS and CMS—including Tommy Thompson, Mike Leavitt, Tom Scully, Leslie Norwalk, MarkMcClellan and Kerry Weems—wrote to Chairman Hatch that “Mr. Slavitt’s previous professional roles provide the required understanding of health markets andmechanisms, which CMS desperately needs at this time.” Acting Administrator Slavitt has received the support of provider and patient groups, and the formeradministrators indicated that his work in the private sector has prepared him to work with both ideological camps.

2. Administration

White House Holds 2015 Conference on Aging and Launches Several New Administration Healthy Aging Initiatives Enveloping Alzheimer’s, Dementia, FallsPrevention…

The sixth annual White House Conference on Aging was held on July 13, 2015, with themes focusing on the 50th anniversary of Medicare, Medicaid and theOlder Americans Act, as well as the 80th anniversary of Social Security. In the months leading up to the July event, the White House Conference on Aginghas been collecting input and feedback from Americans about how to shape the aging policy landscape through a number of venues, including its website,social media, listening sessions with stakeholders and hosting regional forums across the country, such as in Tampa, Florida; Phoenix, Arizona; Seattle,Washington; Cleveland, Ohio; and Boston, Massachusetts. The U.S. Department of Health and Human Services (HHS) is engaged in the government-wide initiativeto develop programs and provide funding and resources to help older adults live independent and fulfilling lives and to provide resources to theirfamilies, friends and other caregivers. At the event, the Department of Health and Human Services (HHS) announced several new agency programs, including:

  • HHS’s update of the National Plan to address Alzheimer’s disease. The update includes priority actions that the government will take over the next year to address these conditions.
  • Health Resources and Services Administration (HRSA) awards of $35 million to health professions training programs to expand geriatrics education to prepare the health care workforce to respond to the needs associated with advancing age.
  • The National Prevention Council, chaired by the Surgeon General, will release in Spring 2016 a Healthy Aging Action Plan to advance the National Prevention Strategy, which will identify federal action steps to promote prevention and well-being among older Americans.
  • The Health Resources and Services Administration (HRSA) will create an Alzheimer’s Disease and Related Dementias training curriculum to build a health care workforce with the necessary skills to provide high-quality dementia care and ensure timely and accurate detection and diagnosis of dementia.
  • The Administration on Community Living is launching a $4 million Brain Health Awareness Campaign to help older adults better understand changes that occur in the brain as people age and reduce the fear of discussing concerns with family members and clinicians.
  • The Centers for Disease Control and Prevention (CDC) is launching a free online course offering to reduce the occurrence of preventable injuries such as falls, providing continuing education credits to physicians, nurses and other health professionals on making falls prevention a routine part of clinical care. The CDC’s evidence-based falls prevention tool, known as STEADI (Stopping Elderly Accidents, Deaths & Injuries), will be implemented across the country.
  • National Institutes of Health (NIH), which is teaming up with a diverse group of public and private partners, will promote healthy aging through its Go4Life exercise and physical activity campaign for older adults.

In conjunction with the conference, the Administration also launched a new website, Aging.gov, to provide information onresources and topics, such as healthy aging, elder justice and long-term care, and vital programs like Social Security and Medicare, designed to help olderadults live independent and fulfilling lives. The White House has held a Conference on Aging each decade since the 1960s to identify and advance actions toimprove the quality of life of older Americans.

More information on the event can be found in an HHS press release or by visitingthe conference website.

FDA Releases Guidance on Procedures for Meeting with FDA’s Office of Orphan Products Development

The Food and Drug Administration (FDA) releasedfinal guidance entitled “Meetings with the Office of Orphan Products Development” in order to providerecommendations to industry, researchers, patient groups and other stakeholders. The document addresses stakeholders interested in requesting a meetingwith FDA’s Office of Orphan Products Development (OOPD) on issues related to orphan drug designation requests, humanitarian use device (HUD) designationrequests, rare pediatric disease designation requests, funding opportunities through the Orphan Products Grants Program and the Pediatric Device ConsortiaGrants Program, and orphan product patient-related topics of concern. Topics addressed in this guidance include: (1) clarification of what constitutes an“informal” or “formal” meeting; (2) program areas within OOPD that may be affected by this draft guidance; (3) procedures for requesting and schedulingmeetings with OOPD; (4) a description of what constitutes a meeting package; and (5) procedures for the conduct and documentation of meetings with OOPD.This guidance finalizes the draft guidance of the same title dated April 2014. Submit electronic comments on the guidance towww.regulations.gov.