Washington Healthcare Update

December 7, 2015

Pardon Our Dust

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This Week: Obamacare repeal passes Senate and goes to the House… Taxextenders still under development… Focus on drug pricing continues… Congresslooks to create an omnibus appropriations bill to fund the government by Dec. 11and in doing so weighs potential riders.

1. Congress

House of Representatives


2. Administration

3. State Activities

4. Regulations Open for Comment

5. Reports

1. Congress


Subcommittee on Health to Hold Hearing on Improving Health Care and Treatment

The Energy and Commerce Subcommittee on Health, chaired by Rep. Joseph Pitts (R-PA), has scheduled a hearing for Dec. 9 entitled “Examining Legislation toImprove Health Care and Treatment.” The subcommittee will continue efforts to reauthorize a nursing training program and to advance legislation thataddresses shortcomings in current law.

The bills to be discussed are:

  • H.R. 921, the Sports Medicine Licensure Clarity Act of 2015 – Authored by subcommittee Vice Chairman Brett Guthrie (R-KY), this bipartisan legislation would address medical liability rules for athletic trainers and medical professionals to ensure they are properly covered by their malpractice insurance while traveling with athletic teams in another state.
  • H.R. 1209, the Improving Access to Maternity Care Act – Authored by Rep. Michael Burgess, M.D. (R-TX), this bipartisan legislation would require the Health Resources and Services Administration to designate maternity care health professional shortage areas and review these designations on an annual basis, at minimum. The Department of Health and Human Services would also be required to collect and publish data on these shortage areas.
  • H.R. 2713, the Title VIII Nursing Workforce Reauthorization Act – Authored by Rep. Lois Capps (D-CA), this bipartisan legislation would reauthorize the current Nursing Workforce Development programs to continue nursing education at all levels, and provide additional support for nurses practicing in medically underserved communities.
  • H.R. 3441, the Accurate Education for Prenatal Screenings Act – Authored by Rep. Jaime Herrera Beutler (R-WA), this bipartisan legislation would direct the Centers for Disease Control and Prevention to develop, implement and maintain programs to educate patients as well as health care providers on the purpose of cell-free DNA prenatal screenings, the reasons for such screenings and what conditions may be detected, as well as the risks, benefits and alternatives to such screenings.
  • H.R. 4152, the Cardiac Arrest Survival Act – Authored by Rep. Pete Olson (R-TX), this legislation would expand immunity from civil liability related to the use of automated external defibrillator devices (AEDs).
  • H.R. 4153, the Educating to Prevent Eating Disorders Act of 2015 – Authored by Rep. Renee Ellmers (R-NC), this bipartisan legislation would establish a pilot program to test the impact of early intervention on the prevention, management and course of eating disorders.

To see the press release, click here.

The Majority Memorandum, a witness list and witness testimony will be available here as they are posted.

Oversight Subcommittee to Hold Second Hearing Examining ACA’s State Insurance Marketplaces

The Energy and Commerce Subcommittee on Oversight and Investigations, chaired by Rep. Tim Murphy (R-PA), scheduled a hearing for Dec. 8 entitled “AnOverdue Checkup Part II: Examining the ACA’s State Insurance Marketplaces.” The hearing is the second of a two-part series and will focus on the actionsthat the Centers for Medicare and Medicaid Services (CMS) is taking to oversee the implementation of state exchanges and the challenges they are facing.Obamacare’s failing CO-OP program will also be addressed at the hearing. CMS Acting Administrator Andy Slavitt will testify before the subcommittee.

To see the press release, click here.

The Majority Memorandum, a witness list and witness testimony will be available here as they are posted.


Senate Passes Obamacare Repeal Bill as Part of Reconciliation

On Dec. 3, the Senate passed its “reconciliation” package, which repeals much of Obamacare. Fifty-two Republicans voted for passage after hours of debateover a variety of issues from guns to risk corridors and Planned Parenthood funding. The bill now goes to the House, which is expected to pass it. TheAdministration has vowed to veto the package, which includes repeal of the medical device tax and the tax on insurers known as the Cadillac tax.

Democrats offered a variety of amendments from extending the Medicaid expansion funding split of 90 percent Federal/10 percent state to providingadditional funds for mental health services. Democrats were successful in blocking an amendment to repeal risk corridors because it violated the Senate’sbudget rules. Also defeated was an amendment offered by Sen. Johnson (R-WI) to allow previously grandfathered health plans to continue. That amendment wasalso found to violate the Senate budget rules. Other additions include language that would defund the Prevention and Public Health Fund, as well asprovisions to repeal the law’s reinsurance provisions, the tax on health insurance plans and many other taxes, such as the tanning salon tax and a fee onhealth savings accounts. Republicans came up with an additional $750 million to help states address mental health needs and substance abuse disorders.Democratic amendments to preserve tax credits for vets, individuals who lost their jobs, victims of domestic violence and Americans with diseases likehepatitis C and cancer failed to pass.

While the bill is likely to be vetoed, some view this action as part of a careful development of a legislative strategy to unwind the Affordable Care Act(ACA) in 2017 should a Republican be elected President. Under the rules of reconciliation, the Senate parliamentarian has to determine whether eachprovision complies with the Senate’s rules. Those rulings are based in part on precedent. So once the parliamentarian has determined that the legislationcomplies in December 2015, it would be hard to argue in January 2017 that a similar repeal bid does not.

Senators Ask HHS toPermit Drug Importation from Canada

On Nov. 20, Sens. John McCain (R-AZ) and Chuck Grassley (R-IA)wrote a letter to HHS Secretary Burwell asking her to issuecertification of certain drugs as safe for importation from Canada. The senators say Burwell should use the authority in the Medicare Prescription Drug,Improvement, and Modernization Act of 2003 to permit importation if doing so would lower costs and pose no public health risk.

Sen. Murkowski Attempting to Block Califf Nomination Due to FDA Approval of GE Salmon

Sen. Lisa Murkowski (R-AK) is attempting to block the pending nomination of Robert Califf as commissioner of the U.S. Food and Drug Administration (FDA)due to FDA’s recent approval of genetically engineered (GE) fish. According to Murkowski, the FDA failed to cooperate fully on its decision to approve GEsalmon. She plans to introduce legislation to require mandatory labeling and additional research into the potential risks and impacts of GE salmon.

Murkowski previously introduced the Genetically Engineered Salmon Risk Reduction Act — legislation that would amend the Federal Food, Drug, and CosmeticAct to require an environmental impact report and risk analysis before GE salmon is approved for human consumption. An amendment was added to the FY 2016agriculture/FDA spending bill that provides funds for implementing a provision requiring the labeling of GE salmon — Murkowski is continuing to build onthat language.

Sen. Ben Sasse (R-NE) has also said he would block the confirmation of every nominee to the U.S. Department of Health and Human Services (HHS), whichincludes Califf, until the Obama administration gives answers for the failure of the CO-OP program.

Wyden-Grassley Investigation Finds Revenue-Driven Pricing Strategy Behind Gilead Hepatitis Drug

On Dec. 1, Senate Finance Committee Ranking Member Ron Wyden (D-OR) and senior Republican committee member and Chairman of the Senate Judiciary CommitteeChuck Grassley (R-IA) released the results of an 18-month investigation into the pricing and marketing of Gilead Sciences’ hepatitis C drug Sovaldi and itssuccessor, Harvoni. Their staffs reviewed 20,000 pages of company documents, conducted interviews with health care experts and collected data from Medicaid programs in 50 states and the District ofColumbia. The investigation found that the company pursued a marketing strategy and final wholesale price of Sovaldi that would maximize revenue withlittle concern for access or affordability. The price came to $1,000 per pill, or $84,000 for one course of treatment. Harvoni was later introduced at$94,500 per treatment.

In the 18 months after Sovaldi’s approval, Medicare spent $8.2 billion before rebates on Sovaldi and Harvoni. Medicare spent more on Gilead hepatitis Cdrugs in the initial half of 2015 than in all of 2014. Gilead’s recent financial statements show U.S. sales of Sovaldi and Harvoni, including throughpublic programs and private payers, totaled $20.6 billion after rebates in the 21 months following Sovaldi’s introduction.

Additional major findings from the investigation include:

  • Gilead justified Sovaldi’s high price point based on price-per-cure
  • Gilead set a high price for Sovaldi with an eye toward ensuring a future high price for Harvoni
  • Gilead underestimated the degree of access restrictions that it expected would result from its pricing decision
  • Despite significant access restrictions, Gilead refused to significantly lower the net price
  • The burdens on Medicare, Medicaid and the Bureau of Prisons were significant
  • Competition entered the market and prices responded, but there are still significant concerns

Click here for more information.

Click here for a relevant press release.

Possible Funding Increases for NIH, AHRQ and FDA in the Upcoming Omnibus Appropriations Act

Research advocates are hoping the National Institutes of Health (NIH) will receive at least a $2 billion increase this year due to bipartisan support. In a letter on Nov. 20, over 100 Republicans in the House asked for a $3billion increase — a number that is close to what NIH would have gotten under the House-passed 21st Century Cures bill, and almost as much aswhat Research!America advocates.

Funding for the Agency for Healthcare Research and Quality (AHRQ) is subject to increases now that the budget deal has freed up $25 billion for domesticspending in 2016. Previous funding for AHRQ was eliminated or reduced in House and Senate appropriations subcommittee bills earlier this year. However, thebudget deal passed earlier this year provides Labor-HHS appropriators $5 billion above current levels and $9 billion above what was proposed for 2016.

There is also strong bipartisan support for increasing the U.S. Food and Drug Administration (FDA) budget to deal with the agency’s duties under the FoodSafety and Modernization Act.

2. Administration

Duals Demonstrations Face Low Enrollment

Demonstration projects with states to better align financing for those individuals who are eligible for Medicare and Medicaid (duals) and to integrateprimary, acute, behavioral health and long-term services and supports for their Medicare-Medicaid enrollees have run into lower-than-expected enrollmentand provider resistance in multiple states. However, states are still considering extending the demonstrations and advocates argue it is too soon to judgethe success of the demonstration projects. As of September 2015, the 13 states running duals demos had enrolled only 400,000 beneficiaries. New York’s demoin particular suffers from low enrollment. As of Sept. 1 only 7,280 beneficiaries were enrolled and 57,375 had left the demo.

State officials are complaining that providers are telling beneficiaries to drop out of the demos. Medicaid Health Plans of America said that providerresistance is contributing to low enrollment as the providers have an incentive to keep low-cost duals in fee-for-service. States are having moredifficulty demonstrating the benefits of the program when people are able to change plans more often; therefore, states would like to know whether theCenters for Medicare and Medicaid Services (CMS) plans to restrict the ability of plan switching. This idea has met resistance from the Medicare RightsCenter, which argues that the demos are still experiments and that it is too early to lock beneficiaries in plans for longer periods of time.

California Gov. Jerry Brown said in his 2015 budget that he will not continue the program if it does not show savings. Massachusetts is also struggling tofund its demonstration. Washington is participating in a managed fee-for-service demo and has promising results, but is funded only through the end of theyear. Despite the various concerns, all 13 states participating in the duals demos have sent letters of intent to extend their demos after CMS offered anextension of two years.

White House Releases Updated HIV Plan

On Dec. 1, the White House released theNational HIV/AIDS Strategy Federal Action Plan (Federal Action Plan) designed to fight HIV in the United States. The plan targets ways to expand HIV testing and linkage to care, improve viralsuppression and pre-exposure prophylaxis (PrEP) — a new HIV prevention method.

The Federal Action Plan, released on World AIDS Day, presents immediate actions to be taken by Federal agencies that will move toward improving HIVprevention and care outcomes. It highlights progress over the past five years — including increasing the number of people living with HIV from 81 percentto 87 percent and reducing wait lists for the AIDS Drug Assistance Program.

The plan asks the Centers for Medicare and Medicaid Services (CMS) to educate state Medicaid programs about the newest treatment guidelines and to increaseaccess to testing and care coordination. It also says that the Centers for Disease Control and Prevention (CDC) will increase efforts to find people notreceiving care and increase awareness of PrEP in at-risk populations.

Chamber of Commerce Tells HHS to Extend Comment Period on 2017 Notice of Benefit and Payment Parameters Proposed Rule

The Chamber of Commerce is demanding that the U.S. Department of Health and Human Services (HHS) extend the 30-day comment period for the 2017 Notice ofBenefit and Payment Parameters proposed rule, arguing that the current Dec. 21 deadline is inadequate considering its expansive and complex policies. TheChamber says this is the third year the administration has prevented the opportunity for meaningful comment.

The Chamber is requesting that HHS extend the comment period to 60 days after the proposed rule was published in the Federal Register. The Centers forMedicare and Medicaid Services (CMS) released the rule Nov. 20, but it wasn’t published in the register until Dec. 2, giving only 19 days for comment underthe current deadline. The Chamber also noted that meaningful public comment is almost impossible on this proposed rule, as there are a slew of disparatepolicy actions contained within it.

CMS Outlines Basis for Cuts Associated With Two-Midnight Rule

On Nov. 30, the Centers for Medicare and Medicaid Services (CMS) outlined its reasoning behind a 0.2 percent cut associated with the two-midnight ruleafter a federal court ordered CMS to do so in response to a lawsuit by the American Hospital Association (AHA). The two-midnight rule says that doctorsshould expect a beneficiary to stay in the hospital for at least two midnights for them to be considered inpatient — shorter stays are consideredoutpatient and are paid at a lower rate. When CMS implemented this policy in 2014, it expected more claims to be classified as inpatient and implementedthe 0.2 percent cut to keep the policy budget neutral. Hospitals argue that the cut wasn’t justified and that there shouldn’t have been a reduction in the2014 rates.

In September, the federal D.C. District Court ruled that HHS didn’t give hospitals a chance to meaningfully comment on the cut, but also concluded thatrequiring HHS to pay hospitals back would be extremely disruptive. CMS says it is not proposing to reconsider the 0.2 percent cut at this time, and that itwill respond to comments in a final notice published by March 18, 2016.

HHS OIG Says Medicare Part B Could Have Saved Money by Sharing Savings with 340B Providers

The HHS Office of Inspector General (OIG) says Medicare Part B could have saved between $162 million to $1.1 billion by sharing savings with 340Bproviders. The OIG says shared savings options could help strike a balance between the needs of 340B providers and Medicare. The 340B hospitals, however,say now is not the time to consider reimbursement cuts to safety net providers.

The OIG has developed three different shared savings scenarios that the OIG believes could achieve Medicare savings while continuing to provide financialincentives to ensure that covered entities continue to purchase Part B drugs through the 340B program.

CMS Issues Final Rule on the Extension of 90/10 Federal Funding for Medicaid Eligibility Systems

On Dec. 3, the Centers for Medicare and Medicaid Services (CMS) issued a final rule on the Extension of 90/10 Federal Funding forMedicaid Eligibility Systems. The final rule is a part of CMS’s efforts to support states in modernizing state eligibility systems to make accurateeligibility determinations and promote enrollment of eligible low-income people in Medicaid and the Children’s Health Insurance Program (CHIP). The changesaim to support states in developing more efficient Medicaid eligibility and enrollment systems and Medicaid Management Information System (MMIS) claimssystems. To do this, CMS is implementing initiatives such as automating the application and renewal process, processing claims more efficiently,integrating with human services programs, retiring outdated legacy systems and enhancing program reporting and management tools.

This final rule revises a 2011 regulation that provided an enhanced federalmatching rate for the design, development, installation or enhancement of Medicaid eligibility and enrollment (E&E) systems through Dec. 31, 2015. Thefinal rule continues the increases in the level of federal support from 50 percent to 90 percent for new E&E systems.

For more information, click here.

3. State Activities

Kansas: Wichita Chamber Board Supports Medicaid Expansion

On Nov. 19, the Wichita Metro Chamber of Commerce voted to add Medicaid expansion to its policy priorities for the upcoming legislative session — only ifthe plan is revenue neutral and includes work and job training requirements. Kansas Gov. Sam Brownback still opposes expansion in the state, but there isincreasing support from health industry executives and lawmakers.

South Dakota: Gov. Daugaard Considering Medicaid Expansion

South Dakota Gov. Dennis Daugaard is planning to address Medicaid expansion in his Dec. 8 budget address. His office reported that expansion could increaseeligibility to 55,000 additional residents and could cost the state $30 million to $33 million a year starting in 2020. The governor’s main concerns arekeeping costs low and ensuring that Native Americans receive sufficient care. According to Daugaard’s chief of staff, expanding the program largely relieson efforts by the Centers for Medicare and Medicaid Services (CMS) to update the policy funding 100 percent of costs for Medicaid-eligible American Indiansthrough the Indian Health Service or tribes in the state.

Florida: Bill Repealing “Certificate of Need” Process Clears House Panel

On Nov. 19, a House review panel in Florida, the Select Committee on Affordable Healthcare Access, cleared a bill that would end state oversight of hospital construction and expansion.Gov. Rick Scott supports this measure that would repeal the “certificate of need” process requiring hospitals to prove community need to state regulatorsbefore building a new facility or expanding an existing one. The current bill has no Senate companion for the 2016 legislative session.

New Jersey: 17 Hospitals Sue the State for Approving OMNIA Health Plans

On Nov. 19, seventeen hospitals filed an appeal challenging New Jersey Gov. Chris Christie’s approval of Horizon Blue Cross Blue Shield’s new line ofdiscounted health plans. The lawsuit claims the state “abdicated its responsibility” to act in the public interest. The hospitals are asking the stateDepartment of Banking and Insurance to take back its decision allowing the insurer — the largest in the state — to sell the OMNIA tiered network plans. Ifthe department refuses, the hospitals will take the matter to a state appeals court.

New Hampshire: Lawmakers Approve Drug Abuse Task Force

On Nov. 18, both the House and Senate chambers approved the creation of a task force charged with reviewing legislation related to drug abuse andaddiction. The 26-member task force will spend the next six weeks studying issues including insurance coverage for treatment, increasing law enforcement,strengthening drug monitoring programs, educating opioid prescribers and cracking down on fentanyl dealers. Nearly 300 people have died from drug overdosesin New Jersey this year.

Arkansas: Task Force Set to Recommend Tweaked Private Option

Arkansas’ Health Reform Legislative Task Force seems to be progressing on its recommendations to the governor on the future of health care in the state.State law requires the group to submit recommendations on the matter by the end of the year. The task force is expected to recommend continuing the state’sprivate option Medicaid expansion with a few Republican tweaks added. Then, Gov. Asa Hutchinson will start negotiations with the federal government tofigure out what the private option will be in 2017 and in the years after.

Oregon and California: New Laws Allow Easier Access to Birth Control

Oregon and California will become the first two states to allow women to get birth control directly from a pharmacist instead of having to go through theirdoctor first. The new laws are intended to make it easier for women to get multiple forms of birth control including pills, patches and rings. Pharmacistswill be able to give women the medication directly once they fill out a questionnaire about their medical history.

Illinois: SEIU Healthcare Illinois Files Restraining Order Against Governor Rauner

SEIU Healthcare Illinois filed for a temporary restraining order against Gov. Bruce Rauner and Comptroller Leslie Munger after the governor refused to payIllinois’ contribution to the workers’ health fund. SEIU claims Rauner viol