Pardon Our Dust
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This Week: Double Issue — Congress leaves for seven weeks, Congress sends opioid legislation to the President…More co-ops fail…The Supreme Court rules on TexasAbortion Case and Washington state Pharmacists and Religious Freedom Case…Hearings on MACRA, Stark, co-ops, cost-sharing and more.
1. Courts
- Federal Circuit Court Rules in Favor of Biologic Companies
- Appellate Court Rules HHS Cannot Ban Fixed Indemnity Health Plans
- Supreme Court Strikes Down Texas Abortion Restriction
- Supreme Court Declines to Hear Pharmacists’ Religious Freedom Case
2. Congress
House of Representatives
- House Ways and Means Committee Approves Two Medicare Bills
- House Oversight Committee Predicts More Co-op Failures
- House Approves the CARA Act
- House Ways and Means Committee Holds Hearing on Cost-Sharing Subsidies
- House Ways and Means Committee Delays Direct Supervisions Rule for Rural Facilities
- House Approves Mental Health Reform Bill
- Democratic Committee Leaders Request Information From Theranos on Inaccurate Blood Test Results
- House Energy and Commerce Committee Subpoenas HHS Documents on Reinsurance Program
Senate
- Senate Passes CARA Act
- Senate Finance Committee Holds MACRA Hearing
- Senate Finance Subcommittee on Health Holds Hearing on Alzheimer’s
- Senate Finance Committee Holds Hearing on the Stark Law
- Zika Funding Stalls in the Senate Twice
- Senate Finance Committee Holds Hearing on Proposed Medicare Part B Demo
3. Administration
- CMS Releases Guidance to States on Participation in Value-based Purchasing Arrangements
- CMS Data Brief: Median Marketplace Deductible $850
- CMS Issues Final Rule Expanding Uses of Medicare Claims Data
- CMS Publishes Open Payments Data
- CMS Announces Physician Groups Chosen for Oncology Care Model
- FDA Panel Approves Humira Biosimilar
- FDA Issues Draft Guidance on Demographic Data in Medical Device Clinical Studies
- FDA Officials Call for National Evaluation System for Health Technology
- AMA Wants CMS to Delay MACRA Reporting Requirements
- President Obama Publishes U.S. Health Care Reform Editorial in JAMA
- NIH Launches Largest Study of Breast Cancer Among Black Women
- National Academy of Medicine Drops Four From Opioid Panel After Wyden Letter
- Vice President Biden Announces New Cancer Moonshot Initiatives
- Justice Department Files Motion to Dismiss Insurer’s Obamacare Lawsuit
4. State Activities
- California: State House Republicans Ask Administration to Deny Undocumented Coverage Waiver
- Connecticut: HealthyCT Co-op Collapses
- Delaware: General Assembly Passes Health Care Pricing Transparency Legislation
- Kentucky: Gov. Bevin’s Plan to Overhaul Medicaid Comes Under Fire
- Maryland: State Health Department Requests Funding for Inpatient Drug Treatment
- Massachusetts: MassHealth Announces Hepatitis C Drug Coverage for All Enrollees
- Oregon’s Remaining Co-op Put in Receivership
- Tennessee: 3-Star Health Task Force Proposes Coverage Expansion Plan
- Utah: If Its Plan is Not Approved, Utah Could Back Out of Medicaid Expansion
5. Regulations Open for Comment
- CMS Issues Proposed Rules for Hospice, Nursing Homes and Inpatient Rehab Facilities
- CMS Proposes Rule to Improve Quality of Care and Health Equity in Hospitals
- CMS Releases Proposed Changes to the Payment Error Rate Measurement and Medicaid Eligibility Quality Control Programs
- CMS Proposed Updates to Policies and Payment Rates for ESRD PPS, QIP, Coverage and Payment for Acute Kidney Injury, DMEPOS Competitive Bidding Program and Fee Schedule, and Comprehensive ESRD Care Model
- CMS Releases Proposed Rule on the Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System
- IRS, Treasury Release Proposed Rule on QHP Benchmarks
- CMS Announces Proposed Payment Changes for Medicare Home Health Agencies
- CMS Extends Comment Deadline for RFI on Modular Solutions for Medicaid IT Enterprise and Pre-Certification of Solutions
6. Reports
- National Academies Report Says Proposed Common Rule Should Be Dropped
- GAO Report Finds Drug Shortages Associated With Patient Care
- “Secret Shopper” Study Shows Insured Patients Have Difficult Time Scheduling Physician Appointments
- FSAP Publishes First Annual Report on Oversight of Labs Working With Dangerous Agents
- Kaiser Family Foundation Releases Report on End of Life Medicare Spending
- CMS Data Shows Health Care Spending Grew in 2015
1. Courts
Federal Circuit Court Rules in Favor of Biologic Companies
On July 5, the United States Court of Appeals for the Federal Circuit ruled that biosimilar manufacturers must wait six months after FDA approval beforeselling their product. This waiting period applies even if the biosimilar company and the branded biologic manufacturer had engaged in an optional patentexchange process, according to the court. The decision in Amgen v. Apotex will give brandedbiologics six months of additional marketing exclusivity—on top of the 12 years they already have—in some circumstances.
The appeals court, which has sole jurisdiction over patent case appeals, had previously ruled in the precedent-setting Amgen v. Sandoz that brandand biosimilar makers were not required to share patent information, a process known as the “patent dance.” The court had also ruled that biosimilarcompanies had to give biologic companies 180 days’ notice of intent to market after FDA approval.
Apotex, which plans to bring a version of Amgen’s cancer drug Neulasta to market, argued that it does not have to provide that 180-day notice because ithad engaged in the patent process with Amgen.
However, the Federal Circuit ruled that the law requiring the notice is firm and does not change even if the biosimilar company engaged in the patentexchange process.
The Supreme Court could weigh in on the matter—in late June, it asked the solicitor general to consult on the Amgen-Sandoz case before deciding whether totake it.
Appellate Court Rules HHS Cannot Ban Fixed Indemnity Health Plans
In a ruling on July 1, theU.S. Court of Appeals for the D.C. Circuit confirmed that the Department of Health and Human Services (HHS) overstepped its authority by prohibiting “fixedindemnity” health insurance plans from being sold. Fixed indemnity plans—criticized by health care advocates for providing bare bones coverage—provide aset amount of benefits and do not meet Obamacare’s minimum coverage requirements.
HHS issued a 2014 rule that “effectively eliminated stand-alone fixed indemnity plans altogether,” the court stated in its ruling. The court determinedthat this contradicted the intent of Congress in passing the Public Service Health Act in 1996—the three-judge appellate panel granted a permanentinjunction prohibiting HHS from enforcing the rule.
The case was brought by Central United Life Insurance Company.
Supreme Court Strikes Down Texas Abortion Restriction
On June 27, the Supreme Court struck down restrictions on Texas abortion clinics and possibly paved the way for a challenge to other similar stateanti-abortion limits. The court’s 5-3 decision in Whole Woman’s Health v. Hellerstedt said Texas abortionclinics do not have to comply with standards of ambulatory surgical centers and their doctors are not required to have admitting privileges at localhospitals. The court found that such restrictions impose an “undue burden” on women’s constitutional right to abortion—this decision is expected todissuade more states from passing similar restrictions, and to arm abortion rights activists in legal challenges to state laws already in place.
This ruling marked the first time in 15 years that the Supreme Court weighed in on state restrictions on abortion providers and facilities—a centralstrategy of the anti-abortion movement since 2010. The ruling’s scope will be tested almost immediately in lawsuits already filed over laws that havethreatened to close clinics in Alabama, Florida, Louisiana, Mississippi, Oklahoma and Wisconsin.
In the Texas case, Justice Anthony Kennedy sided with the court’s liberal justices in the 5-3 decision that found the state had placed unconstitutionalburdens on women seeking abortion. Texas argued that the ambulatory surgical and admitting privileges requirements were designed to make abortionsafer, a claim that the court rejected.
“We conclude that neither of these provisions offers medical benefits sufficient to justify the burdens upon access,” Justice Stephen Breyer wrote for thecourt. “Each constitutes an undue burden on abortion access and each violates the Federal Constitution.”
Justice Samuel Alito, in a dissent quoting the late Scalia, chastised the decision as another in the “court’s troubling tendency to bend the rules when anyeffort to limit abortion, or even to speak in opposition to abortion, is at issue.”
The three dissenting justices—Alito, Clarence Thomas and Chief Justice John Roberts—wrote that the provision could have been sliced up.
Supreme Court Declines to Hear Pharmacists’ Religious Freedom Case
The Supreme Court declined to take up Stormans v. Wiesman, a case in which a group of pharmacists in Washington state maintain that the state doesnot have a conscious protection to safeguard them from having to stock and sell the morning-after pill. The group says their religious beliefs inform themthat the pill is akin to abortion—the FDA says that the drug is a form of birth control and does not cause an abortion.
Three Supreme Court justices—Chief Justice John Roberts, Samuel Alito and Clarence Thomas—wanted to take the case. However, four justices must agree forthe court to take a case.
Alito, in a dissent joined by Roberts and Thomas, called the case an “ominous sign” for religious freedom.
Washington state is one of the few states that does not allow pharmacists to opt out of selling the products.
In this case, one of the pharmacists says she was fired after the policy went into effect, and another was threatened with losing her job. The pharmacistssay that before this policy went into effect, they had referred customers requesting the drugs to nearby pharmacies that sell them. None of the customers,the lawyers say, has ever been denied timely access.
In defense of the policy, Washington state says that no one has ever been held in violation of the regulation and that it only requires the pharmacy tosell the drugs—not an individual pharmacist.
2. Congress
House of Representatives
House Ways and Means Committee Approves Two Medicare Bills
At a full committee markup on July 13, the House Ways and Means Committee approved the Sustaining Healthcare Integrity and Fair Treatment (SHIFT) Act andthe Expanding Seniors Receiving Dialysis (ESRD) Choice Act. The ESRD Choice Act— H.R. 5659—will remove a restriction that blocks patientswith end-stage renal disease from enrolling in Medicare Advantage. The SHIFT Act— H.R. 5713—will “provide for the extension of certainlong-term care hospital Medicare payment rules, clarify the length of stay to certain moratorium-excepted long-term care hospitals and for other purposes.”The committee said the bill will close a program integrity loophole.
To see the full markup, click here.
For a related press release, click here.
House Oversight Committee Predicts More Co-op Failures
On July 13, Kevin Counihan, CEO of the HealthCare.gov marketplace, faced a 90-minute grilling before the House Oversight Committee. Republican members ofthe committee noted that 16 of 23 co-ops have failed and most predicted the rest will fail as well.
In response, Counihan said he holds “a different perspective.” But he offered little in the way of confident assurances that the seven remainingco-ops—officially called consumer operated and oriented plans—will survive in the long run. Pressed to disclose whether any of the remaining co-ops areturning profits, Counihan demurred, saying that profitability is volatile and “can very much [change] on a month-by-month basis.”
At the hearing, ACA supporters did what they could to accentuate positive news and prevent co-op problems from tainting the entire law. Linda Blumberg, anUrban Institute senior fellow who testified alongside Counihan, credited the law with reining in national health expenditures and expanding coverage to 20million Americans.
To watch the hearing, click here.
On July 8, the House voted 407-5 to approve the conference report on the Comprehensive Addiction and Recovery Act (CARA). Democrats fought for months toinclude funding in the legislation and refused to sign a conference report on July 6 after Republicans voted down a $920 million funding proposal. However,they overwhelmingly voted in favor of that report with the blessing of Democratic leadership. The Senate passed the legislation 92-2 on July 13 despitesimilar complaints about a lack of funding.
The advocacy community applauded Congress for passing the opioid legislation—more than 110 groups had signed aletter to Congress praising the conference report and asking members to pass the legislation before leaving for summer recess.
DespiteDemocrats’ letter to Chairman Fred Upton (R-MI) saying they would not sign on unless the legislation includedsubstantial new funding, the bill passed with overwhelming support.
House Ways and Means Committee Holds Hearing on Cost-Sharing Subsidies
On July 7, the House Ways and Means Oversight Subcommittee held a hearing on theAffordable Care Act’s Obamacare cost-sharing reduction program, the center of the House Republicans’ lawsuit against the Obama administration. Membersdebated over whether the administration’s $7 billion payments for cost-sharing subsidies to 6.4 million low-income Affordable Care Act (ACA) enrollees wereillegal.
In areportissued jointly by the Republican staffs of the House Ways and Means Committee and the House Energy and Commerce Committee, Republicans detailed claims thatthe administration made the payments illegally without the required congressional appropriation. A federal district court also ruled that the payments wereillegal and the administration is appealing the decision.
At the hearing, committee chairman Kevin Brady (R-TX) said the administration’s actions constituted “stealing from the American people.” Witnessestestified that payments were made legally as part of a permanent appropriation for premium tax credit subsidies.
House Ways and Means Committee Delays Direct Supervisions Rule for Rural Facilities
On July 7, the House Ways and Means Committee unanimously passed legislation to protect access to high-quality health care in rural communities byproviding regulatory relief to Critical Access Hospitals (CAHs). The Continuing Access to Hospitals Act of 2016—H.R. 5613—delays through this year arequirement that doctors be present at facilities to supervise non-physician providers at small, rural facilities. Committee members amended the bill torequire that the Medicare Payment Advisory Commission study whether the quality of care at rural facilities is hurt by the absence of the requirement. Rep.Xavier Becerra (D-CA) offered the amendment to require a MedPAC study to help Congress decide whether to get rid of the requirement for good.
To see a related press release, click here.
House Approves Mental Health Reform Bill
On July 6, the House passed bipartisan mental health reform legislationthat was three years in the making. The bill passed 422-2, reflecting a decision to defer debates on some of its more controversial aspects. The bill wouldreorganize the Substance Abuse and Mental Health Services Administration, direct funding to fight serious mental illness as opposed to general mentalhealth programs and change Medicaid reimbursements for treating patients with illnesses like schizophrenia. Costly and controversial provisions werestripped including some that would have expanded access to psychiatric hospital beds and made it easier for doctors to share information about mentally illpatients.
Although bill sponsor Rep. Tim Murphy (R-PA) acknowledged that he hoped for stronger legislation, he still called it an accomplishment that “lays thefoundation for how we should handle prevention and treatment.”
One of the most significant reform proposals stripped from the bill would have cost between $40 billion and $60 billion over 10 years. The original billwould have struck a federal rule prohibiting Medicaid payments to psychiatric hospitals with more than 16 beds. Advocates say the rule is a serious barrierto care that has significantly reduced the number of psychiatric beds in the country.
Murphy said he hopes lawmakers can secure more funding for mental health through the appropriations process. He is hopeful that the Senate will quicklytake up his bill, but a lack of time in the legislative calendar and partisan debates in that chamber could hold up the legislation.
A companion measure that was approved unanimously out of the Senate HELP Committee earlier this year has stalled over gun politics. Chairman LamarAlexander says he is hopeful the Senate will take up that measure in September.
Democratic Committee Leaders Request Information From Theranos on Inaccurate Blood Test Results
On July 1, House Energy and Commerce Committee Democrats sent a letter to blood diagnostics startup Theranos requesting information on the company’sfailure to comply with federal regulatory standards and its steps to address the inaccurate test results that were provided to customers. Because Democratsare in the minority, they cannot use subpoenas to make companies turn over documents. This investigation comes after FDA and CMS inspections foundcompliance violations.
“Given Theranos’ disregard for patient safety and its failure to immediately address concerns by federal regulators, we write to request more informationabout how company policies permitted systematic violations of federal law and how Theranos is working with regulators to address these failures,” statesthe letter to the company from E&C ranking member Frank Pallone (D-NJ), Health Subcommittee ranking member Gene Green (D-TX) and Oversight andInvestigations Subcommittee ranking member Diana DeGette (D-CO).
Compliance issues uncovered by the FDA include the use of unapproved medical devices and the failure to keep records, conduct quality audits and validateprocesses to ensure devices are used as intended.
CMS also found the company violated five condition-level Clinical Laboratory Improvement Amendments (CLIA) requirements and other standard-levelrequirements. The agency said some of these compliance violations pose immediate jeopardy to patient health and safety.
CMS later imposed sanctions including barring Elizabeth Holmes, Theranos CEO, from owning or operating a lab for two years.
In the letter, the lawmakers ask Theranos to explain how it is working with regulators to come into compliance with federal law, how it changed internalpolicies to prevent future violations and whether it is investigating its policies and the actions of its employees to determine what caused the compliancefailures. They also want to know what Theranos is doing to help medical professionals and patients who may have been harmed by inaccurate test results.
Click herefor more information.
House Energy and Commerce Committee Subpoenas HHS Documents on Reinsurance Program
On June 29, the House Energy and Commerce Committee issued a subpoena to the U.S. Department of Health and Human Services (HHS) demanding all documentsrelated to the Traditional Reinsurance Program, a program meant to help insurers endure the turbulent first few years of the Obamacare exchanges. Acommittee press releasesaid that HHS acknowledged that “responsive documents” exist about its decision to divert billions in reinsurance dollars to health plans with high medicalcosts, but declined to turn them over earlier in June. HHS claims that providing these documents to Congress would “have a chilling effect on futuredeliberations.” The committee has also subpoenaed documents related to Obamacare’s cost-sharing subsidies and Basic Health Plan.
Senate
On July 13, the Senate passed the opioid conference report of the Comprehensive Addiction and Recovery (CARA) Act 92-2 despite Democrats’ complaints abouta lack of funding. The bill expands education and prevention efforts, strengthens prescription drug monitoring programs and increases first responderaccess to naloxone—a overdose reversal drug—among other changes. It also includes a “lock-in” provision that lets plans limit at-risk beneficiaries’ accessto “frequently abused drugs” by locking them into one or more prescribers and pharmacies.
The House on July 8 passed 407-5 the CARA conference report after Democrats dropped demands for more funding to fight the opioid epidemic and treatoverdoses.
The billnow heads to President Obama’s desk for his signature.
On July 14, Sens. Patty Murray, Ron Wyden, Patrick Leahy and Jeanne Shaheen introduced a stand-alone bill to provide $920 million in new opioid resourcesover the next two years. The White House also pledged to keep fighting for money and circulated letters from law enforcement and addiction treatmentadvocacy groups calling for it. To see the bill,click here.
Senate Finance Committee Holds MACRA Hearing
On July 13, the Senate Finance Committee held a hearing on implementation of the new Medicare physician payment system—the Medicare Access and CHIPReauthorization Act of 2015 (MACRA). At the hearing, CMS acting administrator Andy Slavitt indicated that the agency might delay the start date of thesystem. After committee members expressed concerns with the short period between when the final rule will be announced and the planned implementation date,Slavitt responded that CMS is open to alternatives that include postponing implementation and establishing shorter reporting periods. He acknowledgedseveral times that the more time physicians have to spend reporting data, the less time they can devote to patient care.
To watch the full hearing,click here.
Senate Finance Subcommittee on Health Holds Hearing on Alzheimer’s
On July 13, the Senate Finance Subcommittee on Health held a hearing on Alzheimer’s and its impact on the health care system and family caregivers.
To watch the hearing or for the witness list and statements, click here.
Senate Finance Committee Holds Hearing on the Stark Law
On July 12, the Senate Finance Committee held a hearing to look at the anti-kickback law known as the “Stark Law,” which some argue could hindervalue-based payment models. Dr. Ronald Paulus of Mission Health System said his system could not launch initiatives aimed at improving quality of care forpatients because those moves could result in penalties under the Stark Law.
He and other witnesses asked Congress to repeal or revamp the physician self-referral law that prohibits doctors from referring Medicare patients tohospitals, labs and colleagues with whom they have financial relationships, unless they fall under certain exceptions. No intent of wrongdoing is requiredto prove liability, and offenses carry potential civil monetary penalties.
Another issue raised in relation to the Stark Law is that the law prevents hospitals from paying providers more when they meet certain quality measures,such as reducing hospital-acquired infections, while paying less to those who miss the goals.
Senate Finance Committee Chairman Orrin Hatch (R-UT) said the committee would take some sort of action before the end of the year, but he did not indicateif it would push for a full repeal or a modification of the Stark law.
CMS already made some changes to Stark last year within the Medicare physician fee schedule for 2016 that offered providers some flexibility when it cameto technical violations of the law. However, those changes do not address Stark’s limitations within the context of the move to value-based care.
To watch the hearing or for the witness list and statements, click here.
Zika Funding Stalls in the Senate Twice
The House’s $1.1 billion funding package died in the Senate on June 28 as expected. A second attempt, on July 14, to move the funding bill failed to getthe 60 votes necessary to move forward in the Senate. Democrats opposed the bill’s restrictions on contraception funding and lack of new funds. Republicanscriticized Democrats for the bill’s failure to pass while Democrats criticized Republicans for leaving for the Fourth of July with the issue unresolved.
As of June 30, seven infants have been born with Zika-related birth defects in the U.S. and five pregnancies have ended due to Zika-related birth defects,according to new CDC data. The CDC defines pregnancy loss as a miscarriage, stillbirth orabortion.
The CDC began reporting pregnancy statistics two weeks prior to releasing this data.