Washington Healthcare Update

August 29, 2016

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This Week: Congress is out on recess, but health care is still a hot topic!

1. Congress

House of Representatives

District Work Period until after Labor Day.


District Work Period until after Labor Day.

2. Administration

3. Other

4.State Activities

5. Regulations Open for Comment

6. Reports

1. Congress


Senators Ask Questions About Mylan Pharmaceuticals EpiPen Price Hikes

A number of senators have written a variety of federal agencies as news of the EpiPen price hikes spreads. In addition, Representative Elijah Cummings(D-MD), ranking member of the House Oversight Committee, has called for his committee to schedule a hearing in September.

U.S. Senator Amy Klobuchar, the ranking member of the Antitrust Subcommittee of the Senate Judiciary Committee,has called fora Federal Trade Commission (FTC) investigation of Mylan Pharmaceuticals for possible antitrust violations in light of the dramatic price increase of EpiPenpacks. Mylan has increased the price of its epinephrine injector EpiPen 400-fold over eight years—from $100 in 2007 to $500 today, with some reports ofconsumers paying $600 or more. This price increase occurred despite stable manufacturing costs.

Klobuchar has asked for an investigation into whether Mylan has engaged in activities, such as using incentives or exclusionary contracts with insurers,distributors or pharmacies, to deny an alternative product access to the market. The senator has also called for a hearing in the Senate JudiciaryCommittee on the increase in price of EpiPens.

The only competitor on the market, Adrenaclick, made by Impax Laboratories Inc.’s Amedra Pharmaceuticals, is cheaper, but is not covered by as manyinsurers as EpiPen.

Leaders of the Senate Special Aging Committee, Senators Susan Collins (R-ME) and Claire McCaskill (D-MO), also are asking Mylan to explain the priceincreases. “We are concerned that these drastic price increases could have a serious effect on the health and well-being of everyday Americans,” they wrotein anAug. 24 letter. They asked Mylan CEO Heather Bresch to provide within two weeks any analysis used by Mylanrelated to the pricing or market share of EpiPen.

Another five senators, including Judiciary Committee Chairman Chuck Grassley (R-IA),sent a letterto FDA Commissioner Robert Califf expressing their concerns over the price hike. “[I]t is imperative to understand the FDA’s role with respect to EpiPensand its approval of generic equivalents that could help to increase competition and lower prices if introduced,” they wrote.

Sen. Joe Manchin (D-WV), whose daughter is the CEO of Mylan, also weighed in on the matter, saying, “I am aware of the questions my colleagues and manyparents are asking and frankly I share their concerns about the skyrocketing prices of prescription drugs.”

2. Administration

CMS Announces Medicare Accountable Care Organizations 2015 Performance Year Results

On Aug. 25, CMS released the2015 quality and financial performance resultsfor Medicare Accountable Care Organizations (ACOs) that show that ACOs continue to improve the quality of care for Medicare beneficiaries, while generatingfinancial savings.

According to the results, over 400 Medicare ACOs generated more than $466 million in total program savings in 2015, accounting for all ACOs’ experiences.Of these, 125 qualified for shared savings payments by meeting quality performance standards and their savings threshold. The results show that more ACOsare sharing savings in 2015 compared to 2014 and that ACOs with more experience in the Pioneer ACO Model and the Medicare Shared Savings Program tend toperform better over time.

Additional details about the 2015 Medicare ACO performance and financial results can be found at the following resources:

CMS to Hold Special Open Door Forum on the IMPACT Act

On Sept. 15, CMS will hold a special open door forum for consumers on the Improving Medicare Post-Acute Care Transformation Act of 2014 (the IMPACT Act).The act aimed to set up the post-acute care sectors for payment reforms—including site-neutral pay, value-based pay and pay bundles—by enabling CMS tocompare the cost and quality of care across the four settings. CMS hopes to gather feedback at the forum on ways the IMPACT Act could help improve carecoordination, barriers to that improvement and providers’ role in implementing the law.

CMS also wants to know what information a provider needs for care transitions, when it would be helpful to have that information and what information iscurrently shared. CMS also seeks input on what types of information are needed by hospital staff, post-acute care staff, primary care physicians, apatient’s family and support systems and the patient.

To see the forum PowerPoint, clickhere.

Former CMS Officials Support Medicare Part B Enrollment and Simplification Changes

A bipartisan group of former top CMS officials is supporting legislative changes to enrollment policies for Medicare Part B. Three former CMSadministrators and five former leaders of its predecessor agency, the Health Care Financing Administration, signed a letter backing the BeneficiaryEnrollment Notification and Eligibility Simplification Act. The goal of the legislation is to make enrollment simpler and reduce premium penalties thatmany beneficiaries end up paying because they did not enroll right away. Roughly 750,000 Medicare beneficiaries are paying late enrollment penalties thatcan amount to a 30 percent increase in monthly premiums, according to the Medicare Rights Center. The former CMS officials argue the problem has beenexacerbated by the increasing share of Americans who continue to work after they turn 65.

To see the letter, clickhere.

CMS Clarifies Approach to Reviewing Telemedicine State Plan Amendments

CMS recently clarified that states are not required to submit a separate state plan amendment (SPA) if they decide to reimburse for telemedicine servicesthe same way or amount that they pay for face-to-face services.

When a state plans to make changes to its Medicaid program, that state sends an SPA to CMS for review and approval. A significant challenge to expandingMedicaid telehealth reimbursement has been the assumption that CMS first requires a state plan amendment to be approved before a reimbursement policy canbe implemented. The Center for Connected Health Policy (CCHP) found that 21 states have submitted SPAs for telehealth reimbursement, while 25 states thatcurrently reimburse for telehealth within their Medicaid program have not. “This prompted an inquiry from CCHP with the White House Rural Council earlierthis year to clarify this issue, so that states wishing to modernize their telehealth reimbursement policies could do so without having to wait for CMSapproval of a SPA. Subsequently, CMS has published on its website a specific section addressing telehealth and SPAs,” CCHP said.

CMS added a section to its telemedicine page to explain the policy. The agency says states have to submit a separate reimbursement state plan amendment ifthey want to provide reimbursement for telemedicine services or aspects of telemedicine that differs from the current reimbursement for face-to-faceservices.

For more information,click here.

CMS Limits Network Comparison Tool to Six States

InAugust 19 guidance, CMS said it will introduce a tool to let individuals compare the relative size of providernetworks in Obamacare plans for 2017, but only in six HealthCare.gov states. Earlier this year, CMS suggested in guidance that,during the open enrollment period beginning Nov. 1, individuals in all HealthCare.gov states would be able to compare plans’ provider networks in the samecounty.

CMS did not specify which states will pilot the new tool.

CMS Requests Information on Reports of Steering Medicare, Medicaid Beneficiaries to Individual Market Plans

CMS isrequesting informationfrom the public regarding reports of inappropriate steering of individuals eligible for or receiving Medicaid and Medicare benefits to individual marketplans in order to receive higher payment rates. In an official request for information issued Aug. 18, CMS asked for comments on the frequency of thepractice, the impact it has on patients and options to limit or prevent it.

“This practice not only could raise overall health system costs, but could potentially be harmful to patient care and service coordination because ofchanges to provider networks and drug formularies, result in higher out-of-pocket costs for enrollees, and have a negative impact on the individual marketsingle risk pool,” CMS said in the RFI.

Comments must be submitted no later than 5 p.m. on Sept. 22, 2016.

CMS Releases New Prescription Drug Cost Data

On Aug. 18, CMS released privacy-protected data on the prescription drugs that were paid for under the Medicare Part D Prescription Drug Program in 2014.This is the second release of the data on an annual basis, which shows which prescription drugs were prescribed to Medicare Part D enrollees by physiciansand other health care professionals.

The 2014 data set contains information from over one million distinct health care providers who collectively prescribed approximately $121 billion inprescription drugs paid for under the Medicare Part D program. This represents a 17 percent increase compared to the 2013 data set. The March 2016Department of Health and Human Services report provided a detailedanalysis of prescription drug spending trends, and noted that overall prescription drug spending in the United States rose by 12.6 percent between 2013 and2014.

The 2014 data set describes the specific medications prescribed for 38 million Medicare Part D enrollees, who represent about 70 percent of all Medicarebeneficiaries. The data set was created using information submitted by Medicare Advantage Prescription drug plans and stand-alone Prescription Drug Plans.With two years of data, CMS can conduct analyses of trends from 2013 to 2014 as well as conduct a wide array of analyses that compare prescribing habitsfor specific providers, brand versus generic drug prescribing rates, and state- and local-level differences in drug utilization and costs. The 2014 dataset includes new aggregated information on opioids, antibiotics, antipsychotics and high-risk medications among the elderly. In addition, a prescriberenrollment status field has been added to indicate whether the prescriber is enrolled, not enrolled or opted out of the Medicare program.

For a related fact sheet, click here.

To see the 2014 Medicare Part D prescriber data, click here.

FDA Expresses Concern Over Influx of Citizen Petitions on Generic Drugs

FDA is concerned about the influx of petitions to the agency that are intended primarily to delay the approval of a competing drug product and do not raisevalid scientific issues. FDA said it is worried the resources required to respond within congressionally mandated timeframes are diverting its attentionfrom other activities—like, for example, responding to other citizen petitions that do raise safety or public health concerns.

FDA is bound by law to respond within 150 days to citizen petitions relating to pending approvals of generic, biosimilar or 505(b)(2) drugs. In fiscal year2015, FDA delayed the approval of one generic drug and one 505(b)(2) medication because of three citizen petitions. In comparison, it denied 16 petitionsover that same time period. FDA gets around 22 of this type of petition per year. Overall, FDA has denied about 68 percent of the petitions related togeneric, biosimilar or 505(b)(2) drugs since FY 2008. It partially denied another 25 percent, and granted 5 percent.

FDA’s last report to Congress reiterates frustrations the agency has expressed in years past. Although Congress made a few changes as part of the 2012 FDASafety and Innovation Act to address the agency’s concerns, these updates have not done enough to change practices. FDA has also previously expressedconcern that companies sent in multiple petitions about the same drug—requiring multiple responses from FDA.

FDA to Release Medical Device User Fee Agreement

On Aug. 22, the FDA announced the release of the Medical Device User Fee Agreement—an agreement between the FDA and representatives from the medical deviceindustry on proposed recommendations for the fourth reauthorization of a medical device user fee program.

Under the draft agreement, the medical device industry would pay nearly $1 billion in user fees over five years starting in October 2017. The agreement isthe result of months of negotiations and will form the backbone of reauthorizing legislation that Congress will need to pass before October 2017. It spellsout certain benchmarks FDA agrees to meet in its review of medical devices in exchange for industry user fees, including how long approvals will take andhow the agency staff will interact with companies.

“This draft agreement represents a substantial investment in the future of the agency’s medical device program and reflects the efforts the FDA has made tomeet or exceed its performance goals and to help speed patient access to safe and effective medical devices,” FDA device center Director Jeffrey Shurensaid in a statement.

For a related press release, click here.

Regeneron Acquires Funding From BARDA for MERS Vaccine

On Aug. 22, Regeneron Pharmaceuticals, Inc., announced an agreement with the Biomedical Advanced Research and Development Authority (BARDA) to manufactureand study two antibody therapies for the potential prevention and treatment of Middle East Respiratory Syndrome (MERS). BARDA will provide funding of up to$8.9 million to support packaging and labeling of the antibodies for human use, the preparation and submission of an Investigational New Drug applicationwith the FDA, and a National Institutes of Health-conducted clinical trial in healthy volunteers. There are currently no medicines or vaccines to treatMERS, which first emerged in Saudi Arabia in 2012 and has been confirmed in other Middle Eastern countries, Africa, Europe and the U.S. According to theCDC, there is a very low risk of contracting the infection in this country.

USPTO Launches Cancer Moonshot Challenge

The U.S. Patent and Trademark Office (USPTO) recently launched a cancer “moonshot” initiative. The agency is challenging people to develop interactivevisualizations and stories that can help reveal insights on new trends related to investments around cancer therapy research and treatment. The USPTO wantsto leverage combine intellectual property data that the office has released with other economic and financial data—like SEC filings and FDA reports—so thefederal government can make more precise decisions about cancer research. The challenge ends Sept. 12 and winners will be announced on Sept. 26.

For more information about the challenge, click here.

3. Other

Consumer Advocates Propose Changes to Promote Access to Prescription Drugs

On Aug. 26, consumer representatives to the National Association of Insurance Commissioners releaseda list of recommendationsfor state and federal policymakers to consider for improving access to affordable prescription drugs. Among the changes suggested by the consumeradvocates: limiting the number of drug tiers that insurers can use, prohibiting co-insurance for prescription drugs, outlawing mid-year formulary changesand soliciting feedback from external stakeholders.

For a related press release, click here.

Aetna Narrowing Individual Public Exchange Participation to Four States in 2017

Aetna is pulling out of all but four states where it currently sells plans on the Obamacare exchanges for 2017. The four states where it will participatenext year are Delaware, Iowa, Nebraska and Virginia—Aetna competed for customers in 15 states this year. Similar decisions were made recently byUnitedHealth Group and Humana to roll back exchange participation.

Aetna cited unsustainable losses as the primary reason for decreasing its Obamacare participation. The number of counties where it sells exchange planswill drop from 778 to 242.

This decision comes at a time when Aetna’s $37 billion acquisition of Humana is being challenged by the DOJ. An antitrust lawsuit is scheduled to begin inDecember.

States, Providers File Lawsuit Against Obamacare Transgender Protections

Five Republican-led states and several provider groups are suing to block a new Obamacare rule intended to prevent health care providers and insurers fromdiscriminating against transgender patients. The five states—Kansas, Kentucky, Nebraska, Texas and Wisconsin—and the provider groups contend that thenondiscrimination rule requires doctors to perform gender transition procedures even when they are against the doctor’s medical judgment.

The lawsuit challenges a section of the Affordable Care Act (ACA) that prohibits discrimination on the basis of race, color, national origin, sex, age ordisability in health care programs. In May, HHS issued final regulations that prevent insurers from having blanket bans on coverage of gender reassignmentservices and forbids providers from refusing care to transgender patients.

“With a single stroke of the pen, HHS has created a massive new liability for thousands of healthcare professionals unless they cast aside their medicaljudgment and perform controversial and even harmful medical transition procedures,” the lawsuit states.

The suit was filed in the U.S. District Court for the Northern District of Texas. It comes one day after a federal judge sided with Texas to block theObama administration’s guidance encouraging school districts to allow transgender students to use the bathroom of their choice.

FBI Says Minnesota, Montana Legislation Does Not Meet Requirements for Background Checks

The FBI said state legislation passed by Minnesota and Montana to allow them to participate in an interstate licensure compact—which would make it easierfor physicians to provide telemedicine services across state lines—does not meet requirements that would allow the agency to share information with statesfor criminal background checks.

The Interstate Medical Licensure Compact offers an expedited pathway to licensure for qualified physicians who wish to practice in multiple states.Proponents of the compact say it will allow physicians to treat patients in participating states besides their own and provide remote communities access tocare through telemedicine. According to a compact information website, 17 states have joined and nine states have introduced legislation to do so.

In a July 7 letter to Minnesota, Christopher Chaney, unit chief of the Criminal Justice Information Law Unit at the FBI, said the authority to circulatecriminal history record information comes from specific federal statutes, and the FBI is not aware of a statute that allows criminal history information tobe shared with the commission.

The Minnesota Board of Medical Practice has asked the FBI to reconsider. Rick Masters, special counsel at the National Center for Interstate Compacts, saidthe FBI’s letter is inaccurate and that the FBI does understand how the commission interacts with individual state licensing boards and the process forlicensure.

4. State Activities

California: Patients Face Hurdles Under New Aid-In-Dying Law

As California’s new aid-in-dying law takes effect, Modern Healthcare examined the hurdles terminally ill patients and health care providers arefacing. A woman seeking to help her aunt described the difficulty she experienced in trying to find a physician who would begin the process. Theprescription for the lethal medication was also not covered by the patient’s Medicare Advantage plan. The California law went into effect in June. Stateswith similar measures in effect include Montana, Oregon, Vermont and Washington.

Colorado: State Board Recommends Expanded Coverage for Hepatitis C Treatment

Colorado’s Medicaid Drug Utilization Board recommended that access to hepatitis C medication should be expanded to more needy residents. But the Boardstopped short of recommending that the treatments be extended to all Coloradans on Medicaid. As a result, the American Civil Liberties Union may file alawsuit to force the state to provide treatment to everyone. Colorado’s Department of Health Care Policy will make a decision on the treatments next month.

Colorado: OIG Finds Colorado Received Millions in Unallowable CHIP Bonus Payments

According to the HHS Inspector General, Colorado received more than $38 million in unallowable bonus payments that were authorized under the 2009 lawreauthorizing CHIP. The law appropriated $3.2 billion in performance bonuses to states to help offset the costs of increased enrollment of childreneligible for Medicaid. However, the OIG’s review found that some of the bonus paymentsColorado received between fiscal years 2010 and 2013 were not allowed, because the state overstated enrollment levels when it submitted bonus requests toCMS.

Overall, Colorado was granted almost $158 million in bonus payments for the years reviewed in the report. The OIG reported that $38.4 million of thosepayments were not allowed and should be repaid to the federal government. Colorado argued that it complied with federal definitions for qualifying childrenas well as additional guidance CMS issued in 2009 on bonus payments.

Delaware: Gov. Markell Signs Needle Exchange Expansion

Delaware Gov. Jack Markell recently signed legislation authorizing a statewide expansion of a needle exchange program. The program, which operates only inWilmington, is meant to curtail the spread of injection-transmitted diseases such as HIV and hepatitis C. Delaware still needs to secure federal funding topay for the expansion. Under the existing program, approximately 80,000 syringes are exchanged annually.

Florida: Molina, Humana Covering Prescriptions Filled Only at Large Pharmacy Chains Beginning Nov. 1

More than 650,000 Florida residents receiving Medicaid have been told they must fill their prescriptions at large pharmacy chains beginning Nov. 1. Molinaand Humana, which manage many of the state’s Medicaid patients, decided to cover prescriptions fill