Washington Healthcare Update

April 16, 2018

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This Week: Opioids, Digital Health, 2019 Marketplace Rule finalized…Courts keep work requirement suit in federal court.

1. Congress



2. Administration

3. Reports

4. Courts

1. Congress


Ryan Not to Run for Re-election

On April 11, Speaker of the House Paul Ryan announced he would not run for re-election to Congress. Already some in the House are suggesting Ryan should resign as speaker and allow the House to choose a new speaker.

Opioids Remain a Focus for Energy and Commerce

The House Energy and Commerce Committee Subcommittee on Health held a hearing April 11 concerning opioids and the Medicare and Medicaid programs. Over 20 bills have been introduced or are being drafted concerning opioids and Medicare and Medicaid. The committee’s hearing was delayed because of the full committee’s hearing concerning Facebook, and had to be carried over to April 12. The committee plans to hold a markup and have legislation on the House floor before the Memorial Day recess.

To see the hearing and read background materials: https://energycommerce.house.gov/hearings/combating-opioid-crisis-improving-ability-medicare-medicaid-provide-care-patients/

Ways and Means Releases White Paper on Opioids

The Ways and Means Committee released on April 11 a white paper on opioids. The paper is based on feedback from providers, payers and others about how to combat the opioid epidemic. Recommendations from stakeholders in the white paper include: 

  • Improve treatment and reimbursements, including increasing access to Medication-Assisted Treatment, utilization and access to non-opioid treatments of pain, and modernizing reimbursement and quality measures;
  • Utilize tools to prevent overprescribing and abuse, including Part D lock-in, limiting prescriptions and better data tracking; and
  • Enhance screening for opioid use disorders, provider education and communication, and patient education.

To read the paper:  https://waysandmeansforms.house.gov/uploadedfiles/brady_neal_roskam_levin_white_paper.pdf

West Virginia Opioid Distribution Hearing Set for May 8

The House Energy and Commerce Oversight and Investigations Subcommittee has set a May 8 hearing on alleged painkiller dumping by wholesale drug distributors in West Virginia.

Representatives of McKesson, Cardinal Health, AmerisourceBergen, Miami-Luken and H.D. Smith are expected to testify. Wholesalers are required to monitor and report to the DEA suspicious purchase orders of opioids. However, certain rural areas of West Virginia received drugs that far exceeded the population of the areas.


HELP Committee Continues to Work on Opioid Legislation

Senate Health, Education, Labor and Pensions Committee Chair Lamar Alexander (R-TN) announced at an April 11 hearing on opioid legislation that the committee is aiming to mark up The Opioid Crisis Response Act of 2018 on April 24. That markup will also include other legislation related to cosmetics.

The committee’s bipartisan draft opioid legislation features a number of provisions clarifying and granting additional authorities to HHS, FDA, National Institutes of Health, Substance Abuse and Mental Health Services Administration, Centers for Disease Control and Prevention, Drug Enforcement Administration and the Health Resources and Services Administration.

The bill expands FDA’s authority to require manufacturers to package certain drugs to allow for a set duration of treatment and provide patients with a simple and safe way to dispose of unused opioids; provides funding for FDA to improve its efforts with U.S. Customs and Border Protection to detect and seize illegal drugs; directs FDA to clarify its development and regulatory pathways to spur development of non-addictive and non-opioid pain products; grants CDC authority to carry out prevention activities related to prescription drug monitoring programs; and allows a patient’s history of opioid use disorder to be included in medical records at the patient’s request.

Alexander said that once the bill is marked up in his committee he will work with the Judiciary and Finance committees to see what suggestions they might have to improve or amend the work that has been done.

2. Administration

FDA Outlines Changes to Drug Review

Updating the framework by which the FDA reviews new drugs is required by the 21st Century Cures Act and last year’s FDA user fee agreement. The process will begin with the FDA’s conducting multiple meetings with drug, patient and research industries to update how it assesses risk in potential new drugs, the agency said late last week. As part of its updated “benefit-risk framework,” drug regulators will incorporate more patient voices into the approval process.

Drug manufacturers have advocated for clarity on FDA’s thinking about their applications. The FDA is promising draft guidance by 2020 that provides “clearer understanding” of how a drug’s benefits and risks factor into decision-making “throughout the drug development life-cycle, including premarket and post-market phases,” according to a framework that was updated April 2. The benefit-risk framework will be used in advisory committee meetings to help foster discussion and develop questions.

FDA is developing separate guidance it hopes to release by June 2020 to better incorporate patient views and experiences into drug approvals. Patients can help by providing regulators with context about the severity of the condition they’re living with and how much their needs are unmet.

To read the draft: https://www.fda.gov/downloads/ForIndustry/UserFees/PrescriptionDrugUserFee/UCM602885.pdf

FDA Seeking Funds to Create a Center of Excellence on Digital Health

FDA is seeking $70 million to create a Center of Excellence on Digital Health, which would be tasked with crafting a new regulatory approach toward these products, akin to what FDA is already piloting with its software pre-cert program, according to budget material sent to congressional appropriators. According to the FDA, a portion of those funds would also go to creating a public-private partnership to assess cybersecurity vulnerabilities related to medical devices and a cloud-based data storage system to review breakthrough device innovations, real-world evidence and other medical device-related information.

The new center would establish a risk-based paradigm where a company could market lower-risk products without FDA premarket review, the agency explained. A company could also market higher-risk products after a streamlined FDA premarket review, but first the company would have to be certified by a third party “as one that engages in high-quality software design and testing (validation) and ongoing maintenance.”

A similar program is already being piloted by FDA’s device center. The goal of the Digital Health Software Precertification Software Pilot Program is to establish firm-based criteria for companies developing medical software products, which would allow precertified companies to launch new software more easily via a streamlined premarket review process.

According to the FDA, the Center of Excellence would also create a public-private entity comprised of subject-matter experts from multiple disciplines across the government, academia and private industry. The entity would address cybersecurity vulnerabilities and incidents in the medical device field.

CMS Finalizes Marketplace Rules

On April 9, CMS released the final rule for marketplaces for 2019. The rule includes:

  • More exemptions to the individual mandate. The new exemptions will extend to individuals who cannot access any affordable plans that cover needed specialty treatment, and individuals living in counties where there is only one insurer selling coverage or where the only affordable plans cover abortion.
  • Continued extension for non-compliant plans that were to be eliminated in 2014. These plans are now extended through 2019.
  • More authority to the states to set coverage within the ACA requirement for plans to cover 10 essential health benefits. However the authority will not begin until 2020.

CMS Finalizes Medicare MRI Coverage Policy for Implanted Cardiac Devices

CMS has finalized a Medicare policy that makes it easier for patients with implanted cardiac devices to receive MRI scans. CMS is now allowing imaging without requiring “coverage with evidence development.”

Beginning in 2011, CMS permitted covering MRIs for patients with implantable devices like pacemakers, but the approval included a key requirement: Medicare would pay for the MRIs only if patients were part of a clinical trial.

The decision comes after the New England Journal of Medicine last year published a study that found no long-term ill effects when patients with pacemakers and defibrillators received MRIs. An estimated 2 million patients in the U.S. have implanted devices, including pacemakers and implantable cardioverter-defibrillators.

In addition, CMS decided not to finalize a proposed restriction that Medicare beneficiaries must have their device implanted for at least six weeks before a scan takes place. Providers had asked CMS to not include the waiting period, because some patients badly needed MRIs during the recovery stage.

3. Reports

GAO-18-269 Federal Health Insurance Exchange: CMS Needs to Ensure Complete, Accurate Data on Terminations of Coverage for Nonpayment of PremiumsReleased April 9, 2018

The Affordable Care Act federal health insurance exchange allows people to enroll outside of the annual open enrollment period under certain circumstances, such as losing coverage from an employer.

Insurers are concerned that some people are misusing this flexibility by reenrolling after their coverage was terminated for nonpayment of premiums. Not only is this against the rules, but it undermines the stability of the exchange.

The Centers for Medicare & Medicaid Services doesn’t collect complete data that would allow it to gauge the extent of the problem. The GAO recommended gathering data on coverage terminations for nonpayment of premiums.

To read the report: https://www.gao.gov/assets/700/690573.pdf

Opportunities for Improving Program Oversight (reissued with revisions)

April 12 Statement of Carolyn Yocom, Director, Health Care

GAO-18-444T, April 12

This testimony focuses on the need for (1) better data, (2) improved oversight and (3) greater federal-state collaboration to safeguard Medicaid program integrity. This testimony is based on GAO reports issued between May 2015 and January 2018 on the Medicaid program. To read the testimony: https://www.gao.gov/products/GAO-18-444T

Short-Term Plans Could Decrease ACA Enrollment Up to 15 Percent

If finalized, the Trump administration’s proposed short-term limited-duration health plans could decrease enrollment in ACA-compliant individual plans by up to 15 percent, or 2 million individuals, which is much more than HHS predicted in the proposed rule, according to an April 12 analysis by the Wakely Consulting Group and the Association for Community Affiliated Plans (ACAP). The same study found that the short-term plans could increase premiums for those remaining in the individual market by as much as 6.6 percent.

Analysis from the Trump administration predicted just 100,000-200,000 fewer consumers would enroll in ACA plans due to the short-term plans, but according to Wakely and ACAP, the administration did not take into account the fact that some people will buy insurance outside the plans.

The study projects that in 2019 enrollment in ACA-compliant plans will decrease by 396,000 to 826,000 consumers if the short-term plan proposal is finalized. But enrollment will grow and more consumers will leave the Obamacare market once the short-term plan policy is fully in place and insurers have time to market the products.

The study predicts the impact to the ACA-compliant individual market will be further worsened due to the repeal of the individual mandate, beginning in 2019, and the plans will create more adverse selection as additional individuals choose to migrate to a short-term plan or to remain uninsured. This could create a cycle of high premiums and lead to more individuals’ opting to remain uninsured, thus further weakening the ACA markets.

Health Savings Accounts Enrollment Is Increasing

A study by AHIP shows nearly 22 million people now have an HSA coupled with a high-deductible health plan, according to a new survey from the health insurance lobby. That’s a 9.2 percent surge in HSA/HDHP enrollment in one year. To read the survey: https://www.ahip.org/2017-survey-of-health-savings-accounts/

4. Courts

Medicaid Work Requirement Case Kept in Federal Court

A federal judge suggested April 10 that the high-profile lawsuit challenging CMS’s approval of work requirements in Kentucky’s Medicaid program could have far-reaching implications on the ability of other states to enact similar policies, and ruled that the national significance of the case means it should proceed in federal court in D.C., not in Kentucky.

Judge James Boasberg denied the Trump administration’s request to transfer the case, dealing a setback to both the administration and Kentucky Gov. Matt Bevin (R), who sought to have the legal issues over work requirements litigated in Kentucky. The lawsuit was brought by 16 Medicaid beneficiaries in Kentucky who argue that federal officials exceeded their authority when they approved Kentucky’s 1115 waiver authorizing work requirements, premiums and other coverage limitations in the state’s Medicaid program. The beneficiaries also argue that CMS broke the law when it sent a Jan. 11 guidance letter to all state Medicaid directors inviting states to apply for waivers to enact work requirements and laying out a legal justification for the agency to approve those waivers. The beneficiaries seek an injunction that blocks all practices allegedly authorized by that guidance letter.

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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