Washington Healthcare Update

October 2, 2017

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This Week: Repeal and Replace Dies Again… Moving on to CHIP and Extenders… 340BTweaks Delayed Again

1. Congress



2. Administration

3. Reports

1. Congress


House Passes FAA Extension, Adds Some Health Extenders

On Sept. 28, the House passed the FAA extension,H.R.3823, with funding for two public health programs through the end of the year.The new funding includes $97.5 million for teaching health centers and aspecial diabetes program run by Indian Health Service through December. Thelegislation also reauthorizes for three years a Medicare demonstrationproject allowing certain patients with weakened immune systems to receivein-home care.

Maternal, Infant, and Early Childhood Program Reauthorized

On Sept. 26, the Maternal, Infant, and Early Childhood Home VisitingProgram bill (H.R.2824) passed the House for a five-year reauthorization. The bill helps new momscare for their children with home-visit services. The bill includes arequirement that states and territories match federal funding and preventSupplemental Security Income payments from going to people with outstandingarrest warrants. Democrats opposed how this bill was funded.

Medicare Extenders Become Contentious

On Sept. 25, Democrats blocked the Ways and Means Committee attempt toextend three health care programs. The blocked bill was a part of adisaster relief bill on suspension. The three programs were for medicaleducation funding for health centers, reauthorization for the SpecialDiabetes Program for Indians and extension of the Medicare Patient IVGAccess Demonstration. The programs were blocked in retaliation toRepublicans’ allowing only certain extenders to go through.

CHIP Update

Following missing the Sept. 30 deadline, the House Energy and CommerceCommittee will mark up legislation to reauthorize the Children’s HealthInsurance Program (CHIP) on Oct. 4. In addition, the committee said thatthey also will consider legislation for the Special Diabetes Programs,National Health Service Corps and Teaching Health Center Graduate MedicalEducation. The Senate bill,S.1827, contains funding for five years. In this bill, the ACA’s 23 percent jumpin federal match rate will be preserved for the first two years and thenwind down. The bill also changes the health law’s requirement for statesmaintaining CHIP eligibility levels. The Senate Finance Committee has notscheduled a markup.


Senate Pivots Away From Graham-Cassidy for Now

On Sept. 28, Senate GOP leadership announced that they would not bring tothe floor repeal and replace legislation known as Graham-Cassidy after itstwo primary authors, Sens. Bill Cassidy (R-LA) and Lindsey Graham (R-SC).Graham said he would continue pushing for ACA repeal through regular orderand expressed confidence there would eventually be the necessary GOP votesfor passage.

Sens. Rand Paul (R-KY), John McCain (R-AZ) and Susan Collins (R-ME) hadstated they would not vote for the legislation.

Cassidy also said he is sure that his bill will be the alternative toObamacare, and that the Medicare for All bill sponsored by Sen. BernieSanders (I-VT) with 15 Democratic cosponsors would take away employercoverage, Tri-Care and other private plans while pushing up taxes.Graham-Cassidy was the subject of a five-hour contentious hearing in theSenate Finance Committee on Sept. 25.

The demise of Graham-Cassidy has led Senate HELP Chairman Lamar Alexanderto renew his bipartisan effort with HELP Committee ranking member Sen.Patty Murray (D-WA) to shore up Obamacare marketplaces if there wasconsensus for a plan that would lower premiums and ensure availablecoverage options in individual markets over the next two years. The two arenegotiating a limited package that would seek to help lower premiums andmake insurance available to the 18 million Americans in the individualmarket in 2018 and 2019.

Hatch Asks CMS to NOT Finalize Medicare Home Health Rules

On Sept. 22, Senate Finance Committee Chair Orrin Hatch (R-UT) asked CMS tonot finalize changes to the Medicare home health agencies pay in 2018 and2019 based on concerns the agency may be implementing complex policy issuestoo quickly. On July 25, the home health pay rule proposed cuts of nearly$1 billion from Medicare reimbursement. The letter to CMS AdministratorSeema Verma stated that reforms are typically budget neutral and CMS may begoing above regulatory authority.

The chairman stated, “Ultimately, behavioral assumptions can triggerpayment swings that produce sizable reimbursement reductions or windfallsin the Medicare payment system. Because errors sometimes do occur in theimpact modeling phase, it is vital that CMS conduct a more comprehensiveimpact analysis prior to the agency finalizing the HHGM proposal.” Further,stakeholders are displeased with the lack of information from CMS aboutbehavioral estimates and need more information before commenting on therule.

To read the letter,click here.

CHRONIC Care Act Passes the Senate

On Sept. 27, the Senate passed the CHRONIC Care Act (S.870), which aims to improve how Medicare handles chronically ill patients andadds a two-year extension to the Medicare Independence at Home model, whichpays medical staff to visit chronically ill patients at home. Further, theact extends special-need plans for patients and permits private Medicareplans to tailor benefit packages through “Value-Based Insurance Design.”

Legislation to Delay Health Insurance Tax Introduced

On Sept. 26, Sen. Corey Gardner (R-CO) introduced the Healthcare Tax ReliefAct to delay the health insurance tax the same day Republicans released thetax reform framework, which does not touch on ACA taxes. Cosponsors of thebill are Republican Sens. Jim Inhofe (OK), Tom Cotton (AR), Ron Johnson(WI), Rob Portman (OH), Jeff Flake (AZ), Roy Blunt (MO), John Barrasso(WY), Ted Cruz (TX), Dean Heller (NV) and Tim Scott (SC).

Reps. Kyrsten Sinema (D-AZ) and Kristi Noem (R-SD) introduced a healthinsurance tax repeal bill,H.R.246, and recently sent a letter requesting delay or repeal of the tax. Thehealth insurance tax accounts for 5 percent of premium hikes. Stakeholdershave argued that the tax does not make sense as it applies to managed careproducts, insinuating the government is taxing itself.

Senate Democrats Demand Answers on Healthcare.gov Shutdown Periods

The demise of Graham-Cassidy has led Senate HELP Chairman Lamar Alexanderto consider reviving his bipartisan bid to shore up Obamacare marketplacesif there was consensus for a plan that would lower premiums and ensureavailable coverage options in individual markets over the next two years.The senator stated, “I will consult with Senator [Patty] Murray and withother senators, both Republicans and Democrats, to see if senators can findconsensus on a limited bipartisan plan that could be enacted into law tohelp lower premiums and make insurance available to the 18 millionAmericans in the individual market in 2018 and 2019.”

Sens. Brian Schatz (D-HI), Elizabeth Warren (D-MA), Cory Booker (D-NJ) andChris Murphy (D-CT) have sent a letter to CMS Administrator Seema Verma andHHS’s inspector general regarding the Obamacare sign-up site and why itwill be shut down for 12 hours on most Sundays and on the first night ofopen enrollment. The senators ask the inspector general seven questionsincluding how the downtime was planned, how it compares to previous yearsand why the downtime is necessary.

To read the letter,click here.

2. Administration

CMS: Sole-State Carriers Must Pay RA Fee, Submit Data Starting in 2018

CMS has stated that carriers that are the only issuers in a state marketrisk pool will partake in the new “High Cost Risk Pool” and be require topay a risk-adjustment user fee. The agency has established a new poolmechanism to reimburse 60 percent of claims over $1 million as part of the2018 Notice of Benefit and Payment Parameters. Up until now, sole carriershaven’t been required to pay into the program. CMS stated, “Similarly,issuers will be required to submit data to the EDGE server to qualify forhigh-cost risk pool payments. The percent of premium charge for thehigh-cost risk pool will be assessed even if issuers that are the onlyissuer in a state market risk pool choose not to submit EDGE data. However,because these issuers do not have transfers under the RA program againstother issuers in the state risk pool, additional data submission to theEDGE server will be optional for these issuers.”

Labs to Seek Delay in Proposed Medicare Rates

In response to the pay rates that CMS proposed on Sept. 22, the AmericanClinical Laboratory Association announced that clinical laboratories willask Congress to delay the rates as they’re far lower than market rates.Medicare typically pays higher lab test bills than commercial payers andthe Protecting Access to Medicare Act directs CMS to base reimbursement oncommercial rates. Labs and lawmakers have spoken out on this issue toinclude labs in the price data. Members of Congress on the Ways and MeansCommittee and Energy and Commerce Committee have asked for hospital labdata to be included.

Federal Exchange Issuers Get Safe Harbor for Renewal Notices

On Sept. 26, CMS stated they will offer an enforcement safe harbor forissuers who fail to provide consumer renewal notices by Nov. 1, so long asthey provide information as soon as possible. This is in response to theAug. 10 notice that extended the time that issuers and states could submitfinal rates to CMS. The agency stated, “Given the later deadline for filingof 2018 rates, CMS believes it is appropriate to provide flexibility in thedeadline for issuance of renewal notices for non-grandfathered andnon-transitional coverage in the individual market beyond the deadline ofproviding such notice before Nov. 1, 2017, which is the first day of theindividual market open enrollment period for the 2018 benefit year.” Theagency also encourages state exchanges to provide enforcement flexibility.

340B Program Changes Delayed

On Sept. 28, CMS released notice stating it is delaying a set of changes tothe 340B Drug Pricing Program, which requires drug makers to providediscounts to safety net providers. This mean that changes to civil monetarypenalties and a new ceiling price will not take effect until July 1, 2018,after originally being set to be finalized in March.

To view the notice,click here.

CMS Will Not Update Hospital Quality Star Ratings in October

On Sept. 28, CMS announced it will not update its Hospital Quality StarRatings in October as the agency is reevaluating aspects of the contentiousmethods and looks through stakeholder response. Comments were due to theagency on Sept. 27 after hospitals had urged the administration to redo thestar ratings or remove them from Hospital Compare until they are correct.As a part of the reevaluation, the agency is looking for information on howmeasures are weighted, what measures are incorporated into the star ratingsand changes to the public reporting thresholds and minimum measures. TheAmerican Hospital Association stated analyses of star ratings show “errorsin the execution of the chosen methodology.” The AHA has been advocatingfor alternative methods for star ratings.

3. Reports

FDA Promotes Compounding

The FDA released a report on compounded drugs made at FDA-regulatedoutsourcing facilities. This should help doctors know which compoundedproducts are made at plants that are required to follow good manufacturingpractices.

Outsourcing facilities were created by Congress in the 2013 Drug Qualityand Security Act, after a deadly meningitis outbreak due to compoundedmedicines. The FDA oversight required these facilities to help ensure thesafety of medicines compounded in large quantities.

FDA Commissioner Scott Gottlieb restated his intention to get morefacilities to register with the FDA as compounders by focusing on reducingregulatory burden. The agency also shared its “Outsourcing FacilityInformation” guide that provides information about becoming an outstandingfacility and the resources available to such facilities.

To read the report,click here.

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

StephanieKennan, Senior Vice President
Anne Starke, Research Associate

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