Washington Healthcare Update

December 11, 2017

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This Week: Congress funds the government for two weeks … discusses how to delay some of the ACA taxes … and states ask when CHIP will be reauthorized.

1. Congress



2. Administration

3. Reports

1. Congress


Energy and Commerce Subcommittee to Hold Hearing on Patient Brokering and Addiction Treatment Fraud

The Subcommittee on Oversight and Investigations will hold a hearing on Tuesday, Dec. 12, 2017, at 10:15 a.m. in 2322 Rayburn House Office Building. The hearing is entitled “Examining Concerns of Patient Brokering and Addiction Treatment Fraud.” Witnesses have not yet been announced. The hearing webcast will be available at http://energycommerce.house.gov/.

Energy and Commerce Subcommittee Announces Hearing on Drug Supply Chain

The Subcommittee on Health will hold a hearing on Wednesday, Dec. 13, 2017, at 10:00 a.m. in 2123 Rayburn House Office Building. The hearing is entitled “Examining the Drug Supply Chain.” Witnesses have not yet been announced. The hearing webcast will be available at http://energycommerce.house.gov/.

Funding the Government and CHIP

The House and Senate passed a short-term continuing resolution (CR) to fund the government through Dec. 22.   

Within the short-term CR was a provision that permits CMS to free up “redistribution” dollars from other states to be used for states running out of money even though they have already received a redistribution through Dec. 31. The provision did not provide any new money. While this helps some states, states are pressuring Congress to act to reauthorize the CHIP program.

Taxes and Health Care

House Ways & Means Chair Kevin Brady (R-TX) said Dec. 7 that no decisions have been made on whether Congress will delay the health insurance tax (HIT) for exchange and Medicare plans but not for employer-sponsored or Medicaid plans for 2018, and extend relief to all applicable plans for 2019. Also in the mix is a two-year delay of Obamacare’s medical device tax, loosening the restrictions on health savings accounts and delay of the Cadillac tax.

Chairman Brady also said he has received feedback on the House decision to eliminate the medical expense deduction, with some of his colleagues stressing that it’s crucial to maintain support for people with “extraordinary” medical expenses. The Senate maintained the deduction and temporarily expanded the deduction.


Taxes and Collins Deal to Shore Up the Marketplaces

Sen. Susan Collins (R-ME) went along with the tax bill that repeals the Affordable Care Act’s individual mandate, because the Senate Majority Leader pledged to pass a pair of bills to shore up the insurance markets. One bill, Alexander-Murray, would temporally restore subsidies to insurers. The second bill, Collins-Nelson, would fund a two-year reinsurance program.

However, in the House, the conservative Republican Study Committee says that House leaders pledged that cost-sharing reductions would not be part of a year-end spending deal. Speaker Ryan has made it clear he is not bound by the Collins deal. On Dec. 7 Collins said that she is waiting to see the tax conference report finalized before determining whether she will vote for the tax package. 

HELP Committee Schedules Hearing on Drug Prices

A National Academy of Sciences report on ways to cut drug prices will be discussed at a Senate Health, Education, Labor and Pensions Committee hearing on Dec. 12. The report includes proposals that run counter to the interests of brand drug makers, pharmacy benefit managers and health plans. The report calls for consolidating government purchasing power, strengthening formulary design, sharing rebates with beneficiaries, publicizing profits of supply chain middlemen and cracking down on hospital drug discounts among its many recommendations. To achieve those policies, the report suggests allowing federal negotiation of drug prices in Medicare and Medicaid. It also calls for letting states exclude drugs from formularies and amending the Medicaid Rebate Program to allow for that exclusion.

The report also advocates 340B hospital drug discount program changes that would not bode well for hospitals.

To view the hearing: 


HELP Committee Holds Hearing on Mental Health and 21st Century Cures Implementation

The HELP Committee will hold a hearing on implementing of the 21st Century Cures Act and Mental Health on Dec. 13 at 10 a.m.  Elinore F. McCance-Katz, MD, PhD, assistant secretary for Mental Health and Substance Abuse, will testify. 

To view the hearing https://www.help.senate.gov/hearings/implementation-of-the-21st-century-cures-act-responding-to-mental-health-needs.

2. Administration

FDA to Ease Requirements for Rare Pediatric Disease Drugs

The FDA issued a draft guidance laying out new approaches for conducting clinical trials of drugs for rare pediatric diseases, aiming to make it easier to bring the treatments to market. While the guidance specifically focuses on treatments for Gaucher disease, the FDA says the proposal’s underlying principles may be appropriate for other rare pediatric diseases.

One suggested approach would let multiple companies collaborate and test more than one in the same clinical trial, reducing the number of patients needed to be treated with placebo. The guidance also suggests using a single control group for comparing multiple new drugs. FDA is also encouraging the extrapolation of clinical data from studies in adults and older pediatric populations to help support a drug’s approval.


FDA and CMS Will Work More Together on Diagnostic Test Reviews

FDA Commissioner Scott Gottlieb told the Senate HELP Committee that the FDA and CMS will increasingly work together on simultaneous diagnostic test reviews, which he believes will be “a powerful incentive” for more sponsors of diagnostic tests to voluntarily go through the FDA approval process.

The statement, at a Senate health committee hearing on 21st Century Cures Act implementation, came in response to a question from Sen. Michael Bennet (D-CO), who brought up FDA and CMS’s Nov. 30 announcement that CMS had agreed to cover FoundationOne CDx (F1CDx), a breakthrough-designated in vitro diagnostic test, on the same day that FDA approved the device.

“We think, going forward, this is a panel of cancer markers that will help guide the treatment of cancer patients and help guide the prescription of therapy. And this is an area of a lot of innovation right now. And what CMS said in their policy, and I’ll let them articulate it more clearly, is that panels that come through FDA for voluntary approval now will automatically receive coverage, a national coverage determination. So it’s a powerful incentive I believe for more such tests to try to come through the regulatory process. We can provide I hope greater assurance of the effectiveness of it,” he said.

3. Reports

CMS Office of the Actuary Releases 2016 National Health Expenditures

In 2016, overall national health spending increased 4.3 percent following 5.8 percent growth in 2015, according to a study by the Office of the Actuary at the Centers for Medicare & Medicaid Services (CMS) published as a Web First by Health Affairs. Following Affordable Care Act (ACA) coverage expansion and significant retail prescription drug spending growth in 2014 and 2015, health care spending growth decelerated in 2016. The report concludes that the 2016 expenditure slowdown was broadly based as growth for all major payers (private health insurance, Medicare and Medicaid) and goods and services categories (hospitals, physician and clinical services, and retail prescription drugs) slowed in 2016. 

During 2014 and 2015, the health spending share of the economy increased 0.5 percentage point from 17.2 percent in 2013 to 17.7 percent in 2015. The increases in the health spending share of the economy in 2014 and 2015 were largely due to coverage expansion that contributed to 8.7 million individuals’ gaining private health insurance coverage and 10.2 million gaining Medicaid coverage over the period and to significant growth in retail prescription drug spending. Health care spending grew 1.5 percentage points faster than the overall economy in 2016, resulting in a 0.2 percentage-point increase in the health spending share of the economy—from 17.7 percent in 2015 to 17.9 percent in 2016.

The CMS Office of the Actuary’s report will appear on the CMS website at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsHistorical.html

An article about the study is also being published by Health Affairs as a Web First (http://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2017.1299) and will also appear in the journal’s January 2018 issue.

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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