Washington Healthcare Update

December 4, 2017

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This Week: Congress Returns to Deal With Tax Bill… HHS Nominee Has First Hearing…Administration Kills Obama-era Payment Bundles

1. Congress



2. Administration

3. Reports

1. Congress


FDA Says It Will Expedite Review Programs for Drugs

Testifying before the House Energy and Commerce Committee on implementationof the 21st Century Cures Act on Nov. 30, FDA Commissioner Scott Gottliebsaid the FDA will take new steps to more quickly approve new drugs and newuses for existing drugs.

The agency wants to extend its expedited review programs to drugs that showa clinical benefit in a small number of patients.

To view the hearing:https://energycommerce.house.gov/hearings/implementing-21st-century-cures-act-update-fda-nih/.

Rep. Pallone And Sen. Wyden Raise Concerns Over Iowa 1115 Waiver

On Nov. 28, Senate Finance ranking Democrat Ron Wyden (OR) and House Energy& Commerce ranking Democrat Frank Pallone (NJ) wrote CMS AdministratorSeema Verma they are worried a recently approved amendment to Iowa’s 1115waiver would eliminate retroactive Medicaid coverage. The pair believe thiscould have “devastating consequences” for the state’s elderly and disabled.

The Iowa Health and Wellness Plan, which became effective Nov. 1, waivespreviously mandated three-month retroactive Medicaid coverage forbeneficiaries except pregnant women and infants under one year of age. Thestate will continue to operate its presumptive eligibility program, andIowa will continue to provide outreach and education on Medicaid coverage.

“Instead of seeking to test new or innovative delivery system models thatimprove access to care, this amendment would threaten the medical andfinancial wellbeing of thousands of individuals, including seniors andindividuals with disabilities who rely on Medicaid for essential long-termcare such as nursing and home-based care,” Wyden and Pallone wrote. “Byjeopardizing access to critical services for many of the most vulnerableindividuals in the state, Iowa’s amendment contravenes the fundamentalobjectives of the Medicaid statute and congressional intent.”

When CMS approved the waiver, the agency said Iowa’s proposal to removeretroactive coverage promotes the goals of Medicaid because it encouragesbeneficiaries “to obtain and maintain health coverage, even when healthy.”


Senate Tax Bill Passes Repealing Individual Mandate

On Dec. 1, the Senate passed its tax bill which included repeal of theindividual mandate. In addition, the bill maintained the medical expensededuction but changed the threshold to 7.5% threshold. Sen. Susan Collins(R-ME) announced she had a deal to ensure passage of her legislation toprovide funding to states for invisible high risk pools and for theAlexander-Murray bill which is also focused on short-term marketstabilization. The Congressional Budget Office wrote a letter last week toSen. Murray (D-WA) stating that none of those provisions would counteractthe impact of repealing of the individual mandate. Sen. Collins took issuewith a number the points raised in the letter.

Hatch Pledges to Pass CHIP Funding

In a floor statement Nov. 30, Senate Finance Chairman Orrin Hatch (R-UT)pledged not to let the Children’s Health Insurance Program run out ofmoney. CHIP’s current funding expired Sept. 30. Since then states have usedcontingency measures to finance their programs.

Hatch said on the Senate floor that “there’s no question” the program’sfederal funding will be extended, but he did not set a timetable forgetting it done. The Finance Committee has approved a five-year extensionfor CHIP, but there have been no final decisions on how to pay for it.

HHS Secretary Nominee Gets First Hearing

HHS Secretary-nominee Alex Azar went before the Senate Health, Education,Labor and Pensions Committee Nov. 29. The Senate Finance Committee hasjurisdiction over Azar’s nomination and will vote on him once committeemembers review his paperwork, but the HELP committee also typically holdscourtesy hearings on HHS secretary nominations.

In the hearing, Azar:

  • Declined comment on pushing Congress to appropriate at least $45 billion to fight the opioid epidemic
  • Affirmed he would uphold the Affordable Care Act as long as it is law while also backing efforts to repeal the individual mandate
  • Supported reinsurance and market stabilization measures
  • Defended the Trump administration’s decision to shorten the ACA enrollment period by half, saying data may show the move improves enrollment
  • Wanted to stop brand drug companies from stalling generic competition
  • Considered applying design aspects of Part D to Part B drug coverage
  • Opposed gag orders that keep pharmacies from telling customers when drugs are cheaper out pocket than when bought with insurance
  • Opposed drug importation and government price negotiation

Azar was in line with FDA Commissioner Gottlieb regarding increasinggeneric competition to bring down drug prices, but he appeared to breakfrom the commissioner by questioning whether REMS are needed after patentshave expired. The need for generics to join brands in a single-shared REMSsystem has been seen as a sticking point blocking generic competition.Gottlieb has pursued making it easier to reach a single-shared system, asopposed to waiving the REMS as a whole.

Support for Senate Proposals on Reinsurance And Market Stabilization

To gain more support for the Senate tax legislation, which repeals theAffordable Care Act’s individual mandate, President Donald Trump threw hissupport behind a short-term federal reinsurance program proposed by Sens.Susan Collins (R-ME) and Bill Nelson (D-FL) as well as the Alexander-Murraybill that funds cost-sharing reduction payments for two years, duringTuesday’s Senate GOP luncheon, according to several senators who attendedthe meeting. Collins affirms that if these two bills were to pass she couldsee herself supporting a tax bill that includes removal of the AffordableCare Act’s individual mandate, a repeal measure she had previously balkedat supporting.

The Collins-Nelson amendment would add $2.25 billion in funding to thefederal budget in both 2018 and 2019 to help states adopt reinsuranceprograms. The Alexander-Murray bipartisan stabilization plan would requirethat Congress pay certain subsidies to insurers to help low-income peoplewith the costs associated with health care. Collins said she has secured adeal where both the Alexander-Murray and Collins-Nelson bills would beconsidered and signed into law before the conference report on the tax billcomes back.

2. Administration

Trump Donates Salary to HHS Opioid Efforts

President Donald Trump has donated his third-quarter presidential salary toHHS’s efforts to combat the opioid crisis, the department and the WhiteHouse announced on Nov. 30. Trump has vowed to donate his entire annualsalary of $400,000 while he is in office. His first-quarter earnings weredonated to the National Park Service.

CMS Eliminates Bundled Payment Programs

CMS, in a final rule released Nov. 30, eliminated programs that would haveheld providers accountable for the cost of certain joint replacementsurgeries and care for heart attacks and cardiac surgeries. It also made apreviously mandatory hip and knee replacement program voluntary forhospitals in some areas.

The Trump administration believes making the programs voluntary willattract more participation, while also easing the regulatory burden onhospitals.

CMS Administrator Seema Verma said in a statement that the agency willannounce a new set of voluntary payment bundles in the near future.

For a technical fact sheet on the changes in this final rule and interimfinal rule with comment period, please visit:https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2017-Fact-Sheet-items/2017-11-30.html.

For more information on the Comprehensive Care for Joint Replacement Model,please visit:https://innovation.cms.gov/initiatives/cjr.

The final rule and interim final rule with comment (CMS-5524-F and IFC) canbe downloaded from the Federal Register athttps://www.federalregister.gov/public-inspection.

CMS Releases Its Measures Under Consideration List for 2018Pre-rulemaking

CMS posted the Measures under Consideration (MUC) List for 2018pre-rulemaking on the CMS website Nov. 30, and has sent it to the NationalQuality Forum (NQF) in preparation for multi-stakeholder input.

CMS recently announced the “Meaningful Measures” initiative to identify themost impactful areas for quality measurement and improvement and reflectcore issues that are most vital to high-quality care and better individualoutcomes. Each year, CMS publishes a list of quality and cost measures thatare under consideration for Medicare quality reporting and value-basedpurchasing programs, and collaborates with the NQF to get input frommultiple stakeholders, including patients, families, caregivers,clinicians, commercial payers and purchasers, on the measures that are bestsuited for these programs. Ultimately, these measures may help patientschoose the nursing home, hospital or clinician that is best for them, andcan help providers to provide the highest quality of care across caresettings.

This year’s MUC List contains 32 measures. CMS is considering new measuresto help quantify health care outcomes and track the effectiveness, safetyand patient-centeredness of the care provided. At the same time, CMS istaking a new approach to coordinated implementation of meaningful qualitymeasures focused on the most critical, highly impactful areas forimprovement while reducing the burden of quality reporting on all providersso they can spend more time with their patients.

CMS considered 184 measures submitted by stakeholders during an open callfor measures. Considering the meaningful measurement areas, CMS narrowedthe list to 32 measures (17 percent of the original submissions) that focusCMS efforts to achieve goals of high-quality health care and meaningfuloutcomes for patients, while minimizing burden. CMS will continue to usethe Meaningful Measures approach to strategically assess the developmentand implementation of quality measure sets that are the most parsimoniousand least burdensome, that are well understood by external stakeholders andthat are most likely to drive improvement in health outcomes.

This year, approximately 40 percent of measures on the MUC List are outcomemeasures, including patient-reported outcome measures, which will helpempower patients to make decisions about their own health care and helpclinicians to make continuous improvements in the care provided. Inaddition, this year there are eight episode-based cost measures proposedthat were developed by incorporating the insight and expertise ofclinicians and specialty societies..

CMS is inviting review of the list and participation in the public process.For more information regarding the NQF Measure Applications Partnershippublic stakeholder review meeting purpose, meetings, 2017 MUC Listdeliberations and voting, visit the NQF website athttp://www.qualityforum.org/map/.

To see the list:https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityMeasures/Pre-Rule-Making.html.

3. Reports

Medicare Paying More for Part B Drugs HHS IG Reports

The HHS inspector general has found that CMS’s decision to includeself-administered versions when setting prices for two Part B drugs causedMedicare to pay an extra $366 million from 2014 to 2016. At issue are twodrugs, Cimzia and Orencia, which are used to treat rheumatoid arthritis andother autoimmune diseases. Part B, which covers drugs administered byphysicians and in other outpatient settings, generally does not cover drugsthat are self-administered by patients. But OIG said there are a smallnumber of cases in which self-administered drugs that typically would beused in situations not covered by Part B are nonetheless being includedwhen CMS sets payment amounts.

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

StephanieKennan, Senior Vice President
Anne Starke, Research Associate

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