Washington Healthcare Update

August 28, 2017

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This Week: HELP committee prepares for hearings on marketstabilization. President signs FDA user fee bill. Congress asks more questionson many drug issues.

Due to Labor Day, the next newsletter will be Sept. 11. Happy Labor Day!

1. Congress



2. Administration

3. Regulations Open for Comment

1. Congress


Reps. Cummings and Welch Ask Questions on MS Drug Prices

On Aug. 17, Reps. Peter Welch (D-VT) and Elijah Cummings (D-MD) sentletters to seven drug companies in an effort to gather information onprofits and sales of drugs for multiple sclerosis (MS). The companies are:Bayer, Biogen, EMD Serono, Novartis, Roche, Sanofi’s Genzyme unit and TevaPharmaceuticals. The representatives are also seeking any analysis thecorporations have on pricing strategies for these drugs, documents thatattempt to extend patent life and contracts with wholesalers, insurers andpharmacy benefit managers. MS drug sales doubled from 2008 to 2012, jumpingto roughly $9 billion. The lawmakers also cite the annual cost per patientwas $60,000 in 2015. The letters request information be delivered by Aug.31.

To view the press release and all letters delivered,click here.


Senators Urge Removal of Menthol Cigarettes

On Aug. 22, a group of eight senators led by Sen. Ed Markey (D-MA) sent aletter to FDA Commissioner Gottlieb calling for the removal of mentholcigarettes, as they serve as a “starter product” for younger Americans andtarget African American communities. The letter requests information on theFDA’s trajectory to address menthol cigarettes since the Advanced Notice ofProposed Rulemaking in 2013 suggested menthol cigarettes present a publichealth risk. The letter further questions why the FDA hasn’t finalizedaction to remove menthol.

To view the letter,click here.

HELP Committee to Hold Hearings on Marketplace Stability

On Aug. 22, the Senate Committee on Health, Education, Labor, and Pensionsannounced it will hold two hearings in September on marketplace stability.Committee Chairman Lamar Alexander (R-TN) stated “we will hear testimonyfrom state insurance commissioners and governors—those closest to theproblem—on steps Congress can take to make insurance available ataffordable prices. Any solution that Congress passes for a 2018stabilization package will have to be small, bipartisan and balanced. Itshould give states more flexibility in approving insurance policies byimproving section 1332 of the Affordable Care Act as well as fund thecost-sharing reduction payments to help stabilize premiums for 2018.”

Ranking Member Patty Murray (D-WA) stated, “I’m pleased to announce withChairman Alexander that our first two bipartisan hearings in the HELPCommittee will be dedicated to hearing from state insurance commissionersand governors from across the country. These state leaders understand fullwell the challenges facing health care today and many have been outspokenabout how the uncertainty caused by this Administration has impacted theindividual insurance market and therefore families’ premiums for 2018.”

The first hearing will be held on Sept. 6 and is entitled “StabilizingPremiums and Helping Individuals in the Individual Insurance Market for2018: State Insurance Commissioners,” at 10 a.m. in SD-430.

The second hearing will be held on Sept. 7 and is entitled “StabilizingPremiums and Helping Individuals in the Individual Insurance Market for2018: Governors,” at 9 a.m. in SD-430.

For more information on these hearings,click here.

Democratic Senator Asks FTC to Tackle Drug Shortages

On Aug. 23, Sen. Richard Blumenthal (D-CT) wrote the current actingchairmen of the FTC asking questions about whether the FTC is doing enoughto ensure consumers are protected against drug shortages due topharmaceutical company mergers. Following the 2015 merger of Pfizer andHospira, there were several shortages and the practice of merging hasbecome more common in the pharmaceutical industry. Specifically, Sen.Blumenthal asked about FTC authority to require safeguards againstpotential drug shortages as a part of a merger agreement and whether theFTC has a policy to consult with the FDA.

To view the letter,click here.

2. Administration

Federal Appeals Court Orders Lower Court to Look at HHS Claims inMedicare Appeals Backlog Case

On Aug. 16, the federal appeals court for Washington, D.C., said a lowercourt needs to look closer at the U.S. Department of Health and HumanServices’s (HHS) claim that it would be impossible for the agency tolawfully reduce the Medicare appeals backlog at the administrative lawjudge level by 2021, though the court said the burden should fall on HHS toprove that is so once the case goes back to the district court.

This decision is a continuation of the American Hospital Association suitagainst HHS over the appeals backlog because decisions at the ALJ levelwere not turned around within 90 days as required by statute. This is thesecond time the appeals court has looked at the case and sent it back tothe district court: first, the AHA appealed a dismissal of the case and thecourt decided in the hospital’s favor; then, when the district court laidout a timetable to eliminate the backlog of Medicare appeals at the thirdlevel of the process, HHS appealed. The appeals court vacated the timetablelaid out by the district court and again sent the case back to the districtcourt to “evaluate the merits of the Secretary’s claim that lawfulcompliance would be impossible.”

The majority on the appeals court said the district court can’t give reliefto hospitals without responding to HHS’s claims that lawful compliance withthe timetable is impossible. HHS had argued that the mandate wouldcompromise the Medicare trust fund by forcing CMS to pay claims that mayhave been appropriately denied just to empty the appeals queue. However,the appeals court also chastised HHS for not explaining how it will fix theproblem.

CMS Releases Hospice Compare Website to Improve Consumer Experiences,Empower Patients

On Aug. 16, CMS released the Hospice Compare website as authorized bySection 1814(i)(5) of the Social Security Act for quality reportingprograms for hospices. The act requires that hospice providers report dataon quality measure through notice and comment rulemaking. The goal of thewebsite is to provide consumer information on quality of care provided. TheHospice Quality Reporting Program (HQRP) includes data from Hospice ItemSet (HIS) and Hospice Consumer Assessment of Healthcare Providers andSystems (Hospice CAHPS®).

To access the website, click here.

CMS Reduces Mandatory Participation in Comprehensive Care for JointReplacement Demonstration and Cancels Cardiac Rehab Payment Models

On Aug. 15, CMS released a rule that proposes reducing by half the numberof geographic areas that participate in the currently mandatoryComprehensive Care for Joint Replacement. The rule will also make the modelvoluntary for the remaining areas, and proposed canceling the EpisodePayment Models and Cardiac Rehabilitation Incentive Payment Models. Makingthe hip and knee programs voluntary for certain providers will decreaseparticipating hospitals by almost half and have a cost savings of $90million.

By canceling both cardiac care bundles and episode payment models, CMS willhave more flexibility to test other innovations. CMS noted in the proposedrule that “review and reevaluation of policies and programs, as well asrevised rulemaking are within an agency’s discretion, and that discretionis often exercised after a change in administration occurs.” CMS also saidit considered changing the design of the episode payment models and bundlesto make them voluntary, but due to time constraints is unable to do so.

To read the proposed rule,click here.

FDA Pediatric Advisory Committee to Hold Product-Specific DiscussionAround Drugs and Devices for Children

On Aug. 21, the FDA announced the Pediatric Advisory Committee willoverview the benefits and safeguards of using opioid products to treatcough in children. This examination will take place as part of a two-daymeeting on Sept. 11 and 12 that will include discussion on other pediatricdrugs. The committee will also look at opioids that contain hydrocodone orcodeine to treat cough and will hold product-specific discussions on drugsand devices as mandated by the Best Pharmaceuticals for Children Act andthe Pediatric Research Equity Act. The panel is also scheduled to discussCDRH-approved devices including Contegra pulmonary valved conduits, theEnterra therapy system, the Pleximmune test and the Elana Surgical Kit.

To view the 2017 Advisory Committee tentative meetings schedule,click here.

Trump Signs FDA Bill

On Aug. 18, President Donald Trump signed the FDA Reauthorization Act of2017, H.R. 2430. The law is a disappointment to lawmakers who had higherhopes for the bipartisan healthcare bill that helps pay for hundreds of FDAjobs and starts the process on drug pricing, as the administration hadwanted the drug and device companies to pay more in user fees.

To view the language of the new law,click here.

Opioid Emergency Left Hanging

Earlier this summer, President Trump’s opioid commission recommended thepresident declare a national emergency on the opioid epidemic, followed bythe president announcing his intention. Nevertheless, the officialdeclaration has yet to be made, leaving state health officials unsure ofnext steps. The details of this are laid out in the Public Health ServiceAct or in the Stafford Act. This declaration has potential to increasefederal personnel to help states, fast track funding and facilitate accessto supplies and drugs through the National Strategic Stockpile. This wouldpotentially include the overdose reversal agent naloxone ormedication-assisted therapies for misuse. A declaration would also give HHSSecretary Tom Price the ability to provide flexibility for granting statewaivers to move patients to programs such as Medicaid or CHIP. Currently,six states have declared an opioid emergency, yet without a federaldeclaration, access to resources is limited.

To view the Public Health Service Act, click here.

To view the Stafford Act,click here.

CMS Advisory Panel Recommended Dropping 340B Proposal

On Aug. 21, the CMS Advisory Panel on Hospital Outpatient Payment suggestedthat CMS prepare a proposal to cut Medicare reimbursement for drugs thatare purchased through the 340B program. CMS has estimated that the proposalwould lead to a $900 million cut, but would be implemented to bebudget-neutral. CMS has also estimated that the redistribution of cashwould increase outpatient payments by 1.4 percent. The panel alsorecommended CMS not finalize the policy but gather comments and sourcesabout its impact. The rules on outpatient hospitals are due in thebeginning of September.

3. Regulations Open for Comment

CMS Proposes 2018 Policy and Payment Rate Changes for End-Stage RenalDisease Facilities

On June 29, the Centers for Medicare & Medicaid Services (CMS) issued aproposed rule that would update payment policies for the End-Stage RenalDisease (ESRD) Prospective Payment System (PPS). The rule covers paymentrates for renal dialysis services, including updates to acute kidney injury(AKI), furnished to beneficiaries on or after Jan. 1, 2018.

The ESRD Quality Incentive Program (QIP) proposed changes are for paymentyears 2019, 2020 and 2021, and a number of key dialysis data methodologiesand quality measures. The proposed rule also requests comment on how toinclude individuals with acute kidney injury in the ESRD QualityImprovement Program.

In addition to the proposed rule, CMS is releasing a request forinformation to welcome continued feedback on the Medicare program. CMS iscommitted to maintaining flexibility and efficiency throughout Medicare.Through transparency, flexibility, program simplification and innovation,CMS aims to transform the Medicare program and promote the availability ofhigh-value and efficiently provided care for its beneficiaries.

Comments are due no later than 5 p.m. on Aug. 28, 2017.

For a fact sheet on the proposed rule, please clickhere.

For the ESRD proposed rule (CMS 1674-P), please click here.

CMS Proposes 2018 Policy and Rate Changes for Hospital Outpatient,Ambulatory Surgical Center Payment Systems

The Centers for Medicare & Medicaid Services (CMS) on July 13, issued aproposed rule that updates payment rates and policy changes in the HospitalOutpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center(ASC) Payment System.

Among the provisions in this rule, CMS is proposing to change the paymentrate for certain Medicare Part B drugs purchased by hospitals through the340B program. The proposed rule also requests comment on how CMS can bestimplement the proposal to pass savings on to beneficiaries and providers,and to allow seniors to save money on their drug costs. The 340B DrugPricing Program allows certain hospitals and other health care providers topurchase drugs and biologicals (other than vaccines) that are administeredin a hospital outpatient department from drug manufacturers at discountedprices.

The proposed rule also includes a provision to address rural hospitalsrecruiting physicians by placing a two-year moratorium on the directsupervision requirement currently in place at rural hospitals and criticalaccess hospitals.

In addition, CMS is releasing within the proposed rule a request forinformation to welcome continued feedback on flexibilities and efficienciesin the Medicare program.

Comments are due 5 p.m. Sept. 11, 2017.

To view a fact sheet on the proposed rule,click here.

To view the proposed rule, click here.

CMS Proposes 2018 Payment and Policy Updates for the Physician FeeSchedule

The Centers for Medicare & Medicaid Services (CMS) on July 13 issued aproposed rule that would update Medicare payment and policies for doctorsand other clinicians who treat Medicare patients in calendar year (CY)2018. This proposed rule seeks public comment on reducing administrativeburdens for providing patient care, including visits, care management andtelehealth services. The rule takes steps to better align incentives andprovide clinicians with a smoother transition to the new Merit-basedIncentive Payment System under the Quality Payment Program (QPP). The rulealso attempts to encourage fairer competition between hospitals andphysician practices by promoting greater payment alignment, and it wouldimprove the payment for office-based behavioral health services that areoften the therapy and counseling services used to treat opioid addictionand other substance use disorders. In addition, the proposed rule makesadditional proposals to implement the Center for Medicare & MedicaidInnovation’s Medicare Diabetes Prevention Program expanded model startingin 2018.

In addition to the proposed rule, CMS is releasing a request forinformation to welcome continued feedback on the Medicare program. CMS iscommitted to maintaining flexibility and efficiency throughout Medicare.Through transparency, flexibility, program simplification and innovation,CMS aims to transform the Medicare program and promote the availability ofhigh-value and efficiently provided care for its beneficiaries. This willinform the discussion on future regulatory action related to the PhysicianFee Schedule.

Comments are due by 5 p.m. on Sept. 11, 2017.

For a fact sheet on the proposed rule,click here.

To view the proposed rule,click here.

CMS Proposes 2018 and 2019 Payment Changes for Medicare Home HealthAgencies

The Centers for Medicare & Medicaid Services (CMS) on July 25 issued aproposed rule that would update payment rates and the wage index for homehealth agencies (HHAs) serving Medicare beneficiaries in 2018; it alsoproposes a redesign of the payment system in 2019. Comments are due Sept.25, 2017.

CMS is planning a slight pay cut for home health agencies in 2018, byreducing Medicare payments to the agencies by 0.4 percent next year, savingthe federal government an estimated $80 million. That change is driven inpart by CMS’s planned phase out of a provision boosting pay rates forcertain home health services delivered to rural patients. The agency isalso floating a series of changes to the payment methodology beginning in2019, which could result in a pay cut of up to 4.3 percent. That wouldtranslate to as much as $950 million in reduced Medicare payments to homehealth agencies.

Under the proposed rule, the home health payment update percentage for HHAsthat submit the required quality data for the Home Health Quality ReportingProgram would be 1 percent in 2018. The proposed rule also includesproposals to refine the HH PPS case-mix adjustment methodology, including achange in the unit of payment from 60-day episodes of care to 30-dayperiods of care, to be implemented for periods of care beginning on orafter Jan. 1, 2019. Additionally, the proposed rule includes proposals forthe Home Health Value-Based Purchasing Model and the Home Health QualityReporting Program.

To view the proposed rule,click here.

For more information on the Home Health Prospective Payment System,click here.

If you have any questions, contact the following individuals atMcGuireWoods Consulting:

StephanieKennan, Senior Vice President
Anne Starke, Research Associate

Founded in 1998, McGuireWoods Consulting LLC(MWC) is a full-service public affairs firm offering infrastructure andeconomic development, strategic communications & grassroots, and governmentrelations services. McGuireWoods Consulting is a subsidiary of theMcGuireWoods LLPlaw firm and has been named in The National Law Journal’s special annualreport, “The Influence 50,” for the past several years. In the most recentreport, McGuireWoods Consulting was ranked 15th of the 1,900 governmentrelations firms in Washington, D.C.

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