Washington Healthcare Update

January 22, 2018

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This Week: Funding the government drama? Azar nomination moves forward…Ways and Means asks CMS what it is doing to prevent opioid abuse by Medicare beneficiaries…Interim Final Common Rule released…CMS not processing therapy claims, to avoid hitting caps…

1. Congress



2. Administration

3. Reports

1. Congress


Continuing Resolution 

The House passed a spending measure that funds the government until the middle of February.  The bill includes a six-year extension of CHIP, a two-year delay of the medical device tax, two year delay of the Cadillac tax, one year delay of the health insurance tax. 

The Senate voted 50-49 on the same measure resulting in a government shut down.  At this writing, the Senate is expected to vote on the same legislation except instead of funding the government until the middle of February, it would go to Fed. 8.  At this writing it is unclear if this version will pass. 

House Ways and Means Committee Holds Hearing Asking CMS What It Is Doing to Prevent Opioid Misuse by Medicare Beneficiaries

In response to a Government Accounting Office report concerning steps CMS should take to enhance efforts to address opioid misuse among Medicare beneficiaries, the Ways and Means Subcommittee on Oversight held a hearing on Jan. 17. Testifying at the hearing were:

Elizabeth Curda, director, Health Care, GAO

Kimberly Brandt, principle deputy administrator for operations, CMS

Gary L. Cantrell, deputy inspector general for investigations, Office of the Inspector, HHS    

For testimony: https://waysandmeans.house.gov/event/hearing-opioid-crisis-current-landscape-cms-actions-prevent-opioid-misuse/

Energy and Commerce Subcommittee Advances Legislation 

On Jan. 17, the House Energy and Commerce Health Subcommittee approved by voice vote legislation sponsored by Rep. Marsha Blackburn (R-TN) that would shield health professionals from liability for harm caused when the professional is serving as a volunteer during a disaster situation.

In addition, the subcommittee reported out by voice vote the Over-the-Counter Monograph Safety, Innovation, and Reform Act of 2018, legislation that would overhaul how the FDA regulates over-the-counter drugs for the first time in more than 40 years. The agency would also stand to receive a substantial increase in resources to oversee nonprescription medicines.

The bipartisan legislation would allow FDA to collect $120 million in user fees from OTC product makers through fiscal year 2022, allowing the agency to hire about 100 additional staff. FDA currently has 30 employees dedicated to OTC issues with an $8 million annual budget.

Under the proposal, FDA would be able to update OTC monographs — which lay out the dosage, formulations and labeling information that drug manufacturers must follow — without going through the rulemaking process. The bill would also give drug companies the opportunity to get two years of marketing exclusivity for an over-the-counter product if they conduct human studies to make certain improvements, such as making a powder version of a pill medication.

Rep. Frank Pallone, the full committee’s ranking Democrat, expressed disappointment the legislation didn’t address FDA’s oversight of cosmetic products, even though the Senate is working to incorporate cosmetic reform into its over-the-counter drug work.


Finance Committee Votes on Azar

The Senate Finance Committee on Jan. 17 voted to advance the nomination of Alex Azar as Secretary of the Department of Health and Human Services (HHS). The 15-12 vote was largely along party lines, although Sen. Tom Carper (DE) was the only Democrat to vote in favor of the nominee. The full Senate vote has not yet been scheduled, but it is expected that the Senate will act before the end of the month. Several Democratic senators, including Sens. Joe Manchin (WV) and Heidi Heitkamp (ND), have said they will vote for the nominee when the nomination is considered by the full Senate.

Senate HELP Committee Starts Work on Reauthorizing the Pandemic and All-Hazards Preparedness Act

On Jan. 17, the Senate Health, Education, Labor and Pensions Committee held its first hearing concerning the Pandemic and All-Hazards Preparedness Act. Testifying at the hearing were: 

Robert Kadlec, M.D., assistant secretary for preparedness and response, HHS

Scott Gottlieb, M.D., FDA commissioner

Stephen C. Redd, M.D., RADM, director, Office of Public Health Preparedness and Response, the Centers for Disease Control and Prevention  

For the testimony or to view the hearing: https://www.help.senate.gov/hearings/facing-21st-century-public-health-threats-our-nations-preparedness-and-response-capabilities-part-i

Senate Homeland Security Committee Holds Hearing on Medicaid Expansion and Opioid Epidemic

On Jan. 17, the Senate’s Homeland Security Committee held a hearing examining the opioid epidemic as an unintended consequence of the Affordable Care Act’s Medicaid expansion. Testifying at the hearing were:

Sam Adolphsen, former chief operating officer, Maine Department of Health and Human Services, and vice president, Rockwood Solutions

J. Otto Schalk, prosecuting attorney, Harrison County, Indiana

Emmanuel Tyndall, inspector general, Tennessee

David A. Hyman, M.D., professor of law, Georgetown University Law Center

Andrew Kolodny, M.D., co-director of Opioid Policy Research, The Heller School for Social Policy and Management, Brandeis University

To view the hearing and the testimony: https://www.hsgac.senate.gov/hearings/unintended-consequences-medicaid-and-the-opioid-epidemic

2. Administration

HHS to Create Conscience and Religious Freedom Division at OCR

On Jan. 18, the administration said it would create a conscience and religious freedom division within the HHS Office of Civil Rights. The office will be created to help shield workers who object to providing certain types of care, such as abortions or therapies for transgender persons.

Between 2008 and the 2016 election, the Office of Civil Rights received 10 conscience complaints. Since the election, it has received 34.

HHS Releases Interim Final Common Rule

HHS and 15 other federal agencies announced on Jan. 17 an interim final Common Rule, also known as Federal Policy for the Protection of Human Subjects, for the protection of research subjects. The rule had been scheduled to go into effect Jan. 19, but research organizations now have until July 19 to comply with its changes. The original Common Rule was published in 1991.   

The Obama administration published the final rule a year ago following a long period of painstaking negotiations among researchers, government officials and privacy hawks. The Trump administration withdrew it immediately along with scores of other regulations.

However, HHS’s Office for Human Research Protections and its partners are weighing whether to seek public comment on delaying its implementation even longer, until next January or later.

The rule requires clearly understandable informed consent notifications in research studies, but allows researchers to seek broad consent to use biological samples and electronic health record data in ongoing research.  

FDA Releases 2018 Compounding Policy Priorities Plan

On Jan. 19, the FDA released its 2018 Compounding Policy Priorities Plan. The plan outlines how the FDA will make it easier for certain compounding pharmacies to sell their products nationwide.

The Drug Quality and Security Act of 2013 created a new category of compounders called outsourcing facilities that can engage in “large-scale, nationwide distribution” under more FDA oversight. The agency said it will implement good manufacturing requirements at these locations by using a “risk-based approach.”

Two final guidance documents, released along with the plan, detail how the FDA would determine when compounded drugs are “essentially a copy” of approved drugs — and how the agency would restrict them.

To read the statement and access the guidance: https://www.fda.gov/NewsEvents/Newsroom/FDAInBrief/ucm592610.htm

FDA Head to Join President at Davos

FDA Commissioner Scott Gottlieb will be part of the president’s delegation to the World Economic Forum in Davos, Switzerland. He will be the only U.S. health official and one of the few who are not Cabinet-level secretaries. The annual gathering later this month brings business elites together to discuss how to improve the state of the world.

Saline Shortage

FDA Commissioner Scott Gottlieb said in a statement on Jan. 16 that while the FDA remains concerned about the shortage of IV saline fluids, some of the alternatives that health facilities are turning to may spur shortages of other medical products.

Trying to cope with the shortage of filled IV saline bags, hospitals and health care providers are repackaging or compounding IV saline fluids utilizing empty IV containers. The result is diminished supplies of containers, as well as concerns that supplies of empty bags could tighten further. The FDA is working to prevent shortages of these empty containers and on steps it could take if shortages do occur.

IV saline was already in short supply before Hurricane Maria hit Puerto Rico this summer. The storm exacerbated the shortage of both the actual saline and the medical devices it is delivered in.

The shortage has been further exacerbated by the particularly bad flu season, which has increased the need for saline. The FDA has heard from hospitals and health facilities that only have a few days of supply of IV saline or are rationing the product. FDA is encouraging hospitals and health providers to contact FDA directly if they don’t have adequate supplies.

To help mitigate the shortage, FDA is continuing to look for additional foreign sites for imports, and is asking companies to submit data to see if expiration dates of some older product can be safely extended.

FDA expects the shortage of IV fluids will improve in the coming weeks and months.

FDA Delays Again Off-Label Marketing Change

On Jan. 12, the FDA announced it will indefinitely delay regulations that give the agency greater power to police drug manufacturers’ off-label marketing. The rule was to take effect in March, but was pushed back for the second time in a year. Commissioner Gottlieb wrote, “We need more time to consider the feedback we received and to make sure that our approach is guided by our public health mandate and to ensure the clarity of our rules on the subject.” 

FDA Unveils a Pilot Program on Clinical Trial Data

On Jan. 16, the FDA unveiled a pilot program to provide the public with additional clinical trial data about new medicines with an eye toward offering more evidence supporting product approvals and transparency into the agency’s decisions.

According to the FDA, making the data available can help maximize the public health value of the new medicines. The information could improve providers’ knowledge about the products they prescribe and enhance patient care, as well as be used by other researchers who want to study treatments.

The FDA will post portions of the clinical trial-related summaries from key trials used to approve nine drugs. These summaries, known as clinical study reports (CSRs), contain detailed information on how trials were conducted and the results. FDA plans to post portions of the CSRs  including the clinical trial protocol, and the statistical analysis plan.

FDA currently releases information about the data supporting a drug’s approval, but the format can be difficult for outside audiences to extract all relevant information, FDA said.

The agency will begin contacting drug companies shortly to see if they are willing to participate in the project. Once the pilot is complete, FDA officials will seek public feedback, including potentially expanding the effort. The data is aimed at protecting patient privacy, trade secrets and confidential commercial information.

To further help people track data used for FDA approvals, the agency also announced today it will add ClinicalTrial.gov identified numbers to FDA materials on drug approvals, to make it easier to track the progress of the drug.

CMS Extends Special Enrollment Period for Puerto Rico and Virgin Islands

CMS is extending its special enrollment period for people in hurricane-stricken Puerto Rico and the U.S. Virgin Islands, giving them another shot at enrolling in Obamacare plans or Medicare. The enrollment window will now remain open through March 31, with CMS indicating that it’ll continue to evaluate the conditions in Puerto Rico and the Virgin Islands to see if it needs to take “additional action.”

CMS Will Not Process Therapy Claims

CMS is not processing claims for physical, speech and occupational therapy. This effort will prevent seniors from being forced to pay out of pocket if they hit Medicare’s annual cap of $2,010 for the services. The frailest seniors are expected to hit Medicare’s limit starting later this month.

Caps on therapy care are among the set of Medicare extenders that expired at the end of December and haven’t been renewed by Congress. The payment policies weren’t included in the House draft legislation to fund the government this past Friday.

CMS can’t process claims sooner than 14 days but typically pays them within 30 days. “If legislation regarding the therapy caps is not enacted in this short period of time, then CMS will release and process the therapy claims accordingly,” it added on its site this week. 

Medicare’s limit on how much therapy it would pay for was enacted in 1997 but has been overridden by Congress ever since. CMS isn’t holding claims for other Medicare extenders.

3. Reports

The Government Accountability Office FDA Medical Device Reviews: Evaluation Is Needed to Assure Requests for Additional Information Follow a Least Burdensome Approach
GAO-18-140, December 15

The GAO was asked to provide information on FDA’s implementation of the least burdensome requirements in its medical device review process. This report: (1) describes FDA’s requests for additional information and sponsor disagreements; (2) describes its least burdensome training efforts; (3) describes FDA actions to improve its requests for additional information; and (4) examines the extent to which it has evaluated its implementation of the least burdensome requirements. GAO reviewed FDA documents and guidance and interviewed agency officials. GAO also interviewed officials from four relevant medical device manufacturing associations. The GAO is making one recommendation that FDA develop and use performance metrics to evaluate the implementation of the least burdensome requirements. The Department of Health and Human Services agreed with GAO’s recommendation.

The Government Accountability Office Generic Drugs: FDA Should Make Public Its Plans to Issue and Revise Guidance on Nonbiological Complex Drugs
GAO-18-80, December 14

The GAO recommends that the FDA should announce its plans to issue and revise product-specific guidance for drugs that are nonbiological and complex. HHS concurred with GAO’s recommendations.

The Government Accountability Office Medicaid: CMS Should Take Additional Steps to Improve Assessments of Individuals’ Needs for Home- and Community-Based Services
GAO-18-103, December 14

The GAO recommends that CMS ensure that all Medicaid HCBS programs have requirements for states to address both service providers’ and managed care plans’ potential for conflicts of interest in conducting assessments. HHS concurred with GAO’s recommendation.

The Government Accountability Office: Medicare Part B: Medicare Represented at Least Half of the Market for 22 of the 84 Most Expensive Drugs in 2015
GAO-18-83, December 18

Medicare bases its payments for most Part B drugs on the average amount that individual purchasers such as physicians paid to manufacturers, net of discounts and rebates, called the average sales price (ASP). For most Part B drugs, Medicare sets the payment rate equal to the ASP plus an additional 6 percent. Medicare’s market share — the percentage of total units of a drug sold that were provided to Medicare beneficiaries — is one of several factors that can affect the market price for drugs covered under Part B.

By law, Medicare pays the ASP-based rate regardless of how high or low that rate may be, while a private insurer can respond to higher pricing by modifying coverage or eliminating a drug from its benefit package. Thus, when Medicare accounts for a large share of the market for a drug, a manufacturer may have less incentive to price the drug competitively.

In 2015, Medicare’s fee-for-service (FFS) program represented 50 percent or more of the market for 22 of the 84 most expensive Part B drugs GAO analyzed. These 22 drugs collectively represented $7.4 billion in spending.

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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