Washington Healthcare Update

November 9, 2015

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This Week: Rep. Brady (R-TX) Named Chairman of the House Ways andMeans Committee… Co-op Closures Subject of Two Hearings and More Letters…Drug Prices Subject of Investigations in Senate, House Dems Launch TaskForce on Issue… and HHS Announces Invitation-only Meeting to Talk About DrugPrices.

1. Congress

House of Representatives


2. Administration

3. State Activities

4. Regulations Open for Comment

5. Reports

1. Congress


New Chairman at House Ways and Means Committee

Rep. Brady (R-TX) was named Chairman of the House Ways and Means Committee on Nov. 4, filling the vacancy that occurred when Rep. Paul Ryan became Speakerof the House. The 10-term congressman was chair of the committee’s Subcommittee on Health. Brady was challenged by Rep. Pat Tiberi (R-OH), who had lessseniority. The committee has jurisdiction over taxes, health, trade and Social Security among other issues.

Energy and Commerce Committee Subcommittee on Health Approves Mental Health Legislation

The Energy and Commerce Committee Subcommittee on Health moved forward legislation on mental health introduced by Rep. Tim Murphy (R-PA). Democrats offeredtheir own proposal and many amendments. However, the bill faces strong opposition from Democrats. The bill was voted out of the subcommittee on an 18-12vote, with the support of every Republican. Rep. Kurt Schrader (D-OR) was the only Democrat to support it.

The bill dismantles SAMHSA to create a new office of the assistant secretary for mental health within the Department of Health and Human Services. This isopposed by most Democrats. It also expands exemptions to HIPAA privacy laws and clarifies when providers can share health information with caregivers andfamily members of patients with serious mental illness. Those who oppose the bill have said the proposal jeopardizes patient privacy, which in turn coulddeter patients from seeking care.

One of the most controversial provisions of the bill provides financial incentives to states with assisted outpatient treatment (AOT) laws. These laws,which are already law in some form in the vast majority of states, allow judges to order a patient with a serious mental illness to follow an intensivetreatment plan. However, some patient advocates and Democrats argue that AOT violates patients’ civil liberties. Energy and Commerce Committee ChairmanFred Upton, who has been eager to move the bill forward, said there will be time to resolve disagreements over the legislation.

The bill also includes new funding toward early intervention, suicide prevention and expanding the mental health care workforce. It is unclear how thespending in the bill will be paid for.

Before the markup, Democrats released their own alternative, which would have overhauled the HIPAA provision, eliminated the AOT language and kept SAMHSAin place. It also added a section on substance abuse treatment and expanded meaningful use electronic health record payments to behavioral healthproviders. The Democratic alternative failed in a committee vote.

The next step is to be considered by the full committee, and it is unclear when that will take place.

House Democrats Form “Affordable Drug Pricing Task Force”

House Democrats announced the formation of the Affordable Drug Pricing Task Force on Wednesday, Nov. 4. The Biotechnology Industry Organization in astatement said, “We are disappointed, however, to learn that this task force seems likely to be narrowly focused on the cost of prescription drugs, ratherthan the enormous value they bring to patients, the healthcare system and society in general.”

Task force members held up potential legislative solutions to stem price increases. Rep. Lloyd Doggett (D-TX) pointed to the Medicare PrescriptionDrug Price Negotiation Act, which would amend the Medicare Part D program to permit the Department of Health and Human Services to negotiate prices withpharmaceutical manufacturers. The measure was initially introduced in 2007 and has been reintroduced every Congress.

Rep. Marcy Kaptur (D-OH) discussed her HHS study amendment that was included as part of the Labor/HHS appropriations bill in June. The amendment directsthe HHS secretary to report to Congress within 120 days of the bill’s enactment with an analysis of prescription drug price increases and whether thegovernment has achieved competitive cost reductions for drugs since 2001.

Also Wednesday, Elijah Cummings (D-MD), ranking Democrat of the House Committee on Oversight and Government Reform, led all 18 Democratic committee membersin sending a letter to Chairman Jason Chaffetz (R-UT) requesting a Nov. 17 committee vote to subpoena J. Michael Pearson, CEO of Valeant Pharmaceuticals,and Martin Shkreli, CEO of Turing Pharmaceuticals, to produce documents on the issue of price increases.

House Energy and Commerce Committee Subcommittee on Health Holds Hearing on Medicare and Medicaid Legislation

On Nov. 3, the House Energy and Commerce Committee’s Subcommittee on Health held a hearing to discuss five bills to make changes in the Medicare andMedicaid programs:

1) H.R. 2878, a bill that would extend into calendar year 2015,the instruction to not enforce Medicare’s direct supervision requirements for outpatienttherapeutic services in critical access and small rural hospitals through 2015. It was introduced by Reps. Lynn Jenkins (R-KS) and Dave Loebsack (D-IA).The Senate companion bill is S. 1461, which was reported out of the Senate Finance Committee in June.

2) An amendment to H.R. 1362 — the Medicaid REPORTS Act — an updated version of H.R. 1362 introduced by Rep. Brett Guthrie (R-KY), would implement aGovernment Accountability Office (GAO) recommendation requiring states to submit an annual report on theamount and sources of funds used to finance thenonfederal share of Medicaid.

3) H.R. 2151, entitled Improving Oversight and Accountability in Medicaid Non-DSH Supplemental Payments Act and introduced by Rep. Chris Collins (R-NY),would require states to conduct annual audits and report annually on non-disproportionate share hospital (DSH) supplemental payments. It also would requirethe Secretary of Health and Human Services (HHS) to issue guidance to states that identify approved methods for calculating non-DSH supplemental paymentsto providers.

4) An amendment to H.R. 1361, “the Medicaid HOME Improvement Act,” introduced by Rep. Brett Guthrie (R-KY). The committee discussed an updated version ofH.R. 1361 that would establish a federal cap on the home equity allowance consistent with current Federal default levels of $552,000 that is indexed togrowth with inflation. Under this policy, more than $552,000 in home equity would still be sheltered, including home equity of any amount if a spouse,child under age 21 or a child who is considered blind or disabled lives in the home. If it is enacted, individuals who have home equity levels above theallowed threshold could use the equity to help cover the cost of their care until they bring equity interest in their home below the federal standard, atwhich point they could obtain Medicaid long-term coverage if otherwise eligible. The equity interest in their home could be accessed through a variety oflegal means, including a reverse mortgage, home equity loan or other financial vehicles.

5) H.R. ___ Quality Care for Moms and Babies Act, which will be introduced by Rep. Eliot Engel (D-NY) and Rep. Steve Stivers (R-OH), would developmaternity care quality measures and support maternity care quality collaboratives. The bill would authorize $15 million for the Department of Health andHuman Services (HHS) to award grants.


Panel I

Lynn Jenkins

Panel II

Katharine Iritani

Anne Schwartz, Ph.D.

To view the bills and the hearing, click here.

Two Committees Hold Hearings on Co-op Closures

The House Ways and Means Subcommittee on Health held a hearing on Nov. 3 to examine the failure of co-ops created under the Affordable Care Act. The lonewitness was Dr. Mandy Cohen, Chief Operating Officer and Chief of Staff for the Centers for Medicare and Medicaid Services.

To read testimony or to see the hearing, click here.

On Nov. 5, the House Energy and Commerce Committee Subcommittee on Oversight and Investigations asked a panel of two state insurance commissioners and twoco-op officials the role of risk corridor payments and capitalization requirements as part of their hearing. Also at the hearing, the Health and HumanServices (HHS) Office of Inspector’s deputy inspector general for audit services announced that the OIG will examine CMS’s decision to permit co-ops toreclassify certain loans as surplus. CMS guidance permitted this practice if the state regulator approved.

To read testimony or to see the hearing, click here.

House Energy and Commerce Committee Creates Medicaid Task Force

Energy and Commerce Committee Chairman Fred Upton (R-MI) is creating a new Medicaid task force to examine ways to strengthen and sustain the program. NoDemocrats are on the task force. Rep. Brett Guthrie (R-KY), now the health subcommittee vice chair, will lead the task force. Other members include: MarshaBlackburn (TN), Susan Brooks (IN), Larry Bucshon (IN), Michael Burgess (TX), Chris Collins (NY), Bill Flores (TX) and Markwayne Mullin (OK).


Republican Senators Write Letter Asking CMS Questions on Co-op Failures

In aletter to the Centers for Medicare and Medicaid Services (CMS), Republican Sens. Orrin Hatch (R-UT) and LamarAlexander (R-TN) asked a series of questions regarding co-op plans and also asked what actions CMS is taking to ensure taxpayer funds are protected. TheSenators asked whether CMS has recovered any loans from the failed co-ops and what steps are being taken to make sure 2016 plan options on healthcare.govare up to date. The letter comes after the failure of 11 co-ops, and just before two House committees hold hearings on the co-ops closures. Hatch andAlexander provided CMS with a list of seven requests and asked that the agency respond no later than Nov. 30.

Congressional Investigation into Prescription Drug Prices Announced

The Senate Special Committee on Agingannounceda bipartisan Senate investigation into pharmaceutical drug pricing on Nov. 4. On Nov. 3, Democrats on the House Oversight Committee sent a letter toChairman Jason Chaffetz (R-UT) repeating their request for a hearing into price increases.

The Senate Committee, led by Sens. Susan Collins (R-ME) and Clair McCaskill (D-MO), has requested documents and information from four pharmaceuticalcompanies: Valeant Pharmaceuticals, Turing Pharmaceuticals, Rerophin Inc. and Rodelis Therapeutics. The Committee’s investigation will include anexamination of 1) substantial price increases on recently acquired off-patent drugs, 2) mergers and acquisitions within the pharmaceutical industry thathave sometimes led to dramatic increases in off-patent drug prices and 3) the Food and Drug Administration’s (FDA) role in the drug approval process forgeneric drugs, the agency’s distribution protocols and if necessary its off-label regulatory regime. A hearing has been scheduled by the Senate SpecialCommittee on Aging tentatively for Dec. 9, 2015. However, the Committee expects to hold subsequent hearings.

Senate HELP Committee Holding Hearing for Califf’s FDA Nomination

On Nov. 17, the Senate Committee on Health, Education, Labor and Pensions (HELP) will hold a hearing to consider the nomination of Robert Califf ascommissioner of the U.S. Food and Drug Administration (FDA). Califf would replace Acting Commissioner Stephen Ostroff who has been in the position sincelast spring. Some consumer advocates, along with Sen. Bernie Sanders, oppose his nomination due to his connection with the drug industry. The HELPcommittee will hold a vote on the nomination at a subsequent executive session. Sen. Ben Sasse (R-NE) is determined to put a hold on all Health and HumanServices (HHS) nominations until it responds to questions regarding the co-ops funded by Obamacare – 12 of which have collapsed.

2. Administration

DOJ Reaches Settlements With Hospitals Over Improper Use of Cardiac Defibrillators

On Oct. 30, the Department of Justice (DOJ) announced that itreached 70 settlements with 457 hospitals in 43 states for more than $250 million over allegations that cardiac defibrillators were implanted in Medicarepatients in violation of Medicare coverage requirements. DOJ alleged that from 2003 to 2010 each one of the settling hospitals used implantablecardioverter defibrillators (ICDs) during waiting periods prohibited by the National Coverage Determination (NCD). The case is one of the largestwhistleblower lawsuits in the United States.

HHS to Hold Invitation-only Forum on Specialty Drug Costs

The U.S. Department of Health and Human Services (HHS) announced that it will holda forum on Nov. 20 concerning “opportunities to improve patient access to affordable prescription drugs, develop innovative purchasing strategies andincorporate value-based and outcomes-based models into purchasing programs in both the public and private sectors.” According to HHS, specialty medicationsrepresent only 1 percent of all prescriptions, but resulted in over 31 percent of all drug spending in 2014. The forum will take place at the HHS buildingin Washington, D.C., and will be webcast. HHS invites those interested in attending to request an invitation.

To view the live webcast of the forum, click here.

CMS Releases New Interactive Medicare Part D Opioid Drug Mapping Tool

On Nov. 3, the Centers for Medicare and Medicaid Services (CMS) released aninteractive online mapping toolthat allows the public to search Medicare Part D opioid prescription claims data at the state, county and ZIP Code levels within the United States. Withthe new tool, the user can see both the number and percentage of opioid claims at the local level and better understand how the issue impacts communities.The tool gives providers, health officials and others the data about communities’ Medicare opioid prescription rate.

Thedataused in the mapping tool is privacy-protected and contains information from over one million providers who prescribed around $103 billion in prescriptiondrugs and supplies under the Part D program. The tool includes interactive maps that allow users to mouse over an area and see its data. The data for eachgeographic region includes:

  • Percentage of opioid claims
  • State average
  • National average
  • Total providers
  • Total opioid claims
  • Total claims

This initiative focuses on three areas: 1) informing opioid prescribing practices, 2) increasing the use of naloxone (drug that reverses symptoms of a drugoverdose) and 3) using medication-assisted treatment to treat opioid addiction. The U.S. Department of Health and Human Services (HHS) is working throughthe Centers for Disease Control and Prevention (CDC) to develop opioid prescribing guidelines and providing training for providers to make informedprescribing decisions.

For more information, read thePart D Overutilization Monitoring System Summary.

Healthcare.gov Pilots New “Doctor Lookup” Feature and “Prescription Drug Check” Coming Soon

On Nov. 3, the U.S. Department of Health and Human Services (HHS) announced that the pilot versionof its new “Doctor Lookup” feature is now live, allowing exchange consumers to search plans by their doctor or health facility. The goal is to provideconsumers with more up-to-date information about a plan before enrolling.

The Centers for Medicare and Medicaid Services (CMS) said that the phased-in feature will reach out to one in four site visitors who are selected atrandom, “allowing us to examine the consumer experience with the feature and to analyze the quality of the data based on consumer feedback as we finalizethe feature and determine how best to meet consumer needs.”

CMS acknowledges that in the early stages, some data may be missing or inaccurate, and consumers should still check with their doctor to confirm if theyare in-network. Healthcare.gov has access to data from over 90 percent of insurance companies on the Marketplace. However, if a company has not providedvalidated data, the consumer will be alerted that no data is available when they search for a provider.

In the near future, CMS plans to pilot its “Prescription Drug Check” feature, which will provide data on covered drugs.

CMS Will Not Finalize Lower Limb Prostheses Local Coverage Determination Policy

On Nov. 4, the Centers for Medicare & Medicaid Services (CMS) announced that the Durable Medical EquipmentMedicare Administrative Contractors will not finalize the draft Lower Limb Prostheses Local Coverage Determination (DL33787) at this time. Both CMS and itscontractors have heard concerns about access to prostheses for Medicare beneficiaries. The draft policy raised alarms in the patient and providercommunities because of concerns that patients would not be able to receive the appropriate lower limb prosthetics and about the scientific basis for thepolicy.

Instead of finalizing the policy, CMS is convening a multidisciplinary Lower Limb Prostheses Interagency Workgroup in 2016. The purpose of the Workgroup isto develop a consensus statement that informs Medicare policy by reviewing the available clinical evidence that defines best practices in the care ofbeneficiaries who require lower limb prostheses. The Workgroup will be composed of clinicians, researchers and policy specialists from different federalagencies. CMS will ensure there is opportunity for public comment and engagement on the Workgroup consensus statement and any related activities. It isexpected that this workgroup will take over a year to complete its process.

AMA Asks Congress to Rework Meaningful Use Program

The American Medical Association (AMA) and state medical associations are asking Congress to rework the meaningful use program. The physicians areconcerned by CMS’s decision to move ahead with Stage 3 of the program despite what they call the “widespread failure of Stage 2.”

The recently passed budget deal requires lawmakers to complete fiscal 2016 appropriations by Dec. 11. Senate Health Committee Chair Lamar Alexander (R-TN)— who also serves on the Appropriations Committee — has also raised issues with CMS’s decision to finalize the third stage of the program.

CMS has said that it expects the majority of all providers to be able to meet the modified 2015 reporting requirements for 90 days, but if a providercannot do so because of the timing of the final rule — which was released with less than 90 days left in 2015 — they may apply for a hardship exceptionunder the “extreme and uncontrollable circumstances” category. Hardship exceptions will be reviewed on a case-by-case basis.

CMS is accepting comments on the final rule through Dec. 15.

CMS and New York State Department of Health Testing New Demonstration for People With Intellectual and Developmental Disabilities

On Nov. 5, the Centers for Medicare and Medicaid Services (CMS) announced that CMS is partnering with the New York State Department of Health (NYSDOH) andthe Office for People with Developmental Disabilities (OPWDD) to test a new model for providing Medicare-Medicaid enrollees with a more coordinated,person-centered care experience.

This partnership will create a program demonstration known as Fully Integrated Duals Advantage for Individuals with Intellectual and DevelopmentalDisabilities (FIDA-IDD) to better serve individuals with intellectual and developmental disabilities who are eligible for both Medicare and Medicaid andwill focus on these individuals’ long-term care needs. The FIDA-IDD Demonstration aims to help individuals to be more independently involved in their owncare.

New York State and CMS are working with Partners Health Plan to offer this FIDA-IDD program in New York City, Long Island, and Rockland and WestchesterCounties. Voluntary enrollment in the program will begin April 1, 2016.

This demonstration involves a different population and Medicare-Medicaid Plan than the Fully Integrated Duals Advantage (FIDA) Demonstration, which isalready operating in New York. The new program also differs from the latter in that it doesn’t allow for passive enrollment of eligible individuals andincludes a benefit package to support individuals with intellectual and developmental disabilities.

The New York FIDA-IDD Demonstration uses the Capitated Model, in which a state and CMS contract with health plans or other entities that receive a paymentto provide enrollees with coordinated care. CMS predicts that 20,000 Medicare-Medicaid IDD enrollees in the New York downstate region will be able toreceive more care as a result of the program. All participating plans must meet core Medicare and Medicaid requirements, state procurement standards andstate insurance rules (as applicable). The plan must also pass a comprehensive readiness review operated by both CMS and the state, which is currentlyongoing.

The demonstration also includes continuity of care requirements to ensure that enrollees can continue to see their current providers during theirtransitions into the FIDA-IDD Plan. New York State created an Ombudsman program called the Independent Consumer Advocacy Network (ICAN) to help enrolleeswith appeals and other issues with the FIDA-IDD program.

To develop this demonstration, New York:

  • Reached out to stakeholders, including individuals with developmental disabilities, parents and other family members, advocates, provider agency leaders and staff, and experts from outside the developmental disabilities service system
  • Held public information sessions with external stakeholders to inform demonstration development and policy
  • Posted its draft proposal for public comment and incorporated the feedback into its demonstration proposal before officially submitting it to CMS. The proposal was then posted by CMS for public comment.

The Memorandum of Understanding (MOU) between CMS and New York State that establishes the demonstration parameters is availablehere.

CMS Worried About Medicaid Limits on Hepatitis C Drugs

On Nov. 5, the Centers for Medicare and Medicaid (CMS) wrote a