Washington Healthcare Update

April 30, 2018

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This Week: Opioid legislation advances in Energy and Commerce and Senate HELP Committees, CMS releases MA encounter data to the public for the first time, and FDA announces a slew of new initiatives.

1. Congress



2. Administration

3. Courts

1. Congress


House Energy and Commerce Subcommittee on Health Reports 57 Bills on Opioids

The House Energy and Commerce health subcommittee on April 25 held a markup to consider legislation related to the opioid epidemic. The subcommittee voted to send to the full committee more than 50 bills intended to help curb the opioid epidemic, as well as legislation that would reauthorize FDA’s animal drug and animal generic drug user fees. While the subcommittee’s agenda comprised 64 bills, the subcommittee only voted on and passed 57, leading Democrats to question why the other seven—many of them Democratic bills addressing Medicaid-related issues—were not discussed despite being on the agenda.

Many of the bills forwarded to the full committee were in discussion draft form, raising concerns by some that they have not been fully considered.   

To see the full list of bills: https://energycommerce.house.gov/news/press-release/subhealth-votes-to-advance-57-bills-to-combat-the-opioid-crisis-reauthorization-of-adufa-and-agdufa/

340B Bill Introduced

On April 24, Rep. Buddy Carter (R-GA) introduced a bill that would make 340B hospitals report on how many low-income patients are cared for as inpatients and outpatients—including patients at off-campus pediatric sites. Carter’s bill would make 340B hospitals report on both their inpatient and outpatient low-income utilization rates.

“340B is an outpatient program and currently hospitals do not have to report low-income utilization in outpatient settings. This legislation adds an additional layer of transparency to allow us to better understand the patient makeup of DSH hospitals to improve the program and ensure it is truly being used in the most effective way for our nation’s most vulnerable patients,” Carter said in a statement.

Critics of the program have questioned whether hospitals’ Disproportionate Share Hospital percentage was the right metric to use for 340B eligibility, since DSH is based on a hospital’s inpatient population and 340B is an outpatient program.

The Biotechnology Innovation Organization, which supports Carter’s bill, says Medicaid DSH is the wrong metric to determine 340B eligibility. BIO President and CEO Jim Greenwood said data is lacking to determine the best way to “maintain a viable 340B program that delivers care to the underserved,” particularly data on outpatients, low-income and uninsured patients. There also have been concerns about hospitals opening pediatric sites that are eligible for 340B in wealthier areas than the neighborhoods surrounding main hospitals, on which a hospital’s DSH percentage is based—a practice noted by the House Energy & Commerce Committee’s 340B report.

Ted Okon, executive director of the Community Oncology Alliance, said the bill would help lawmakers obtain information on hospitals’ patient populations and charity care.

Critics of the bill cite the burden and cost of reporting as an issue. The House Energy and Commerce Committee is expected to turn to the 340B issues after they complete consideration of opioid legislation. 


HELP Committee Unanimously Reports Opioid Legislation

The U.S. Senate HELP Committee unanimously reported out the Opioid Crisis Response Act of 2018 on April 24. The legislation will:

  • Reauthorize grants to states and Indian tribes for prevention, response and treatment to mitigate the opioid crisis, authorized in 21st Century Cures, for three more years.
  • Spur development and research of non-addictive painkillers, and other strategies to prevent, treat and manage pain and substance use disorders through additional flexibility for the NIH.
  • Clarify FDA’s regulatory pathways for medical product manufacturers through guidance for new non-addictive pain and addiction products.
  • Clarify FDA authority to require packaging and disposal options for certain drugs, such as opioids to allow a set treatment duration—for example “blister packs,” for patients who may only need a three- or seven-day supply of opioids—and give patients safe disposal options.
  • Improve detection and seizure of illegal drugs, such as fentanyl, through stronger FDA and Customs and Border Protection coordination.
  • Clarify that U.S. Customs and Border Protection is responsible for destroying controlled substances found in packages at the border, and strengthen FDA’s authority to refuse admission of illegal drugs from bad-actors. 
  • Clarify FDA’s post-market authorities for drugs, such as opioids, which may have reduced efficacy over time, by modifying the definition of an adverse drug experience to include such situations.
  • Provide support for states to improve their Prescription Drug Monitoring Programs (PDMPs) and encourage data sharing between states so doctors and pharmacies can know if patients have a history of substance misuse.
  • Strengthen the health care workforce to increase access to mental health services in schools and community-based settings and to substance use disorder services in underserved areas.  
  • Authorize CDC’s work to combat the opioid crisis, including providing grants for states, localities and tribes to collect data and implement key prevention strategies. 
  • Address the effects of the opioid crisis on infants, children and families, including by helping states improve plans of safe care for infants born with neonatal abstinence syndrome and helping to address child and youth trauma. 
  • Authorize the Department of Labor to address the economic and workforce impacts for communities affected by the opioid crisis, through grants targeted at workforce shortages for the substance use and mental health treatment workforce, and to align job training and treatment services.
  • Improve treatment access to patients by requiring the Drug Enforcement Administration to issue regulations on how qualified providers can prescribe controlled substances in limited circumstances via telemedicine.  
  • Allow hospice programs to safely and properly dispose of unneeded controlled substances to help reduce the risk of diversion and misuse.

HELP Committee Approves Three Bills on OTC Drugs, GME and Cancer Registry

On April 24, the Senate HELP Committee approved three bills:

  • Over-the-Counter Drug Safety, Innovation, and Reform Act (S.2315): This legislation would modernize the way over-the-counter medications are regulated and brought to market. The reforms aim to protect public health and encourage the development of new products to better meet the needs of patients.
  • Children’s Hospital GME Support Reauthorization Act of 2018 (S. 2597): This bill will reauthorize the children’s hospital graduate medical education (CHGME) program for five years. This bipartisan legislation, first enacted in 1999, provides funding to over 50 freestanding children’s hospitals around the country, supporting the training of pediatricians and improving children’s access to care.
  • Firefighter Cancer Registry Act (S.382): Firefighters are exposed to a range of harmful toxins, and research has shown a strong connection between firefighting and an increased risk for several major cancers such as testicular, stomach, multiple myeloma and brain cancers. This legislation would create a national registry for firefighters diagnosed with cancer.

2. Administration

VA Secretary Nominee Withdraws

On April 26, White House physician Ronny Jackson withdrew his name from consideration to lead the Department of Veterans Affairs amid allegations of prior misconduct. In a statement, Jackson said that the allegations against him are false and that if they had any merit, he would never have been “entrusted to serve in such a sensitive and important role as physician to three presidents over the past 12 years.”

CMS Looks at New Pay Model to Contract Directly with Providers

On April 23, CMS solicited public input on contracting directly with primary doctors by paying them a lump sum for the primary care services they provide to seniors who volunteer to be part of the pay model.

The Direct Provider Contracting Model is similar to many other pilots that involve aspects of direct provider contracting, including accountable care organizations, the Comprehensive Primary Care Plus Model that involves capitation arrangements between primary care providers and commercial insurers, and arrangements between providers and Medicare Advantage plans. There also are pay arrangements in the private sector for which patients contract directly with physicians and group practices.

 “A DPC model (or models) would differ from existing primary care models by placing greater emphasis on the central role of the beneficiary in selecting a primary care practice, with beneficiary engagement tools to empower beneficiaries, their families, and their caregivers to take ownership of the beneficiary’s health, while offering practices the ability to take on two-sided financial risk. The model(s) would also provide the flexibility for health care providers to focus on furnishing high-quality healthcare to their patients,” the request for information states. 

CMS Administrator Verma Unveils New Strategy to Fuel Data-driven Patient Care, Transparency

On April 25, Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma announced the agency’s new Data Driven Patient Care Strategy as part of the MyHealthEData initiative at the ninth annual Health Datapalooza conference in Washington, D.C.

In March 2018, the Trump administration announced MyHealthEData, a government-wide initiative spearheaded by the White House Office of American Innovation, designed to help patients access and share their medical data throughout their health care journey while ensuring they are empowered to make decisions about when to share it, keeping their information secure and private. 

As the latest effort under MyHealthEData, the Data Driven Patient Care Strategy is based on three critical cornerstones: putting patients first, making more data available and taking an “application programming interface (API)-approach” to exchanging data in a secure and private manner with CMS partners in the spirit of improving health care for all beneficiaries. These cornerstone principles are reflected in the data initiatives CMS is announcing today and other federal efforts underway to improve the nation’s health care system through data innovation.

“We know we can’t achieve value-based care until we put the patient at the center of our healthcare system,” Administrator Verma said. “The Data Driven Patient Care Strategy will empower patients with the information they need as consumers of healthcare to enable them to make informed decisions about the care they need. Ultimately, the cornerstone of a patient-centered system is data—quality data, cost data and a patient’s own data.”

Additionally, as part of CMS’s commitment to data-driven innovation, Administrator Verma announced Medicare Advantage encounter data is now available to researchers for the first time, and annual updates are planned. Release of the Medicare Advantage encounter data will provide researchers insight into care delivered under Medicare Advantage and permit research that will improve the Medicare program.

Expanded Access to Encounter Data

CMS is expanding data available to researchers starting with 2015 Medicare Advantage (MA) encounter data, which provides detailed information about services to beneficiaries enrolled in a Medicare Advantage managed care plan in calendar year 2015. Researchers already have access to Medicare claims data for the fee-for-service program, and this release of MA data will provide a fuller picture of care provided to Medicare beneficiaries.

CMS also plans to release data from Medicaid and the Children’s Health Insurance Program (CHIP) next year, realizing such data has the potential to facilitate research that will help drive innovation and competition in the health care system and, ultimately, help doctors and patients make the best decisions about care.

For more information or to request encounter data, please visit the CMS Research Data Assistance Center website at www.resdac.org

More CMS Efforts to Unleash the Power of Data 

This announcement builds on several ongoing initiatives the Trump administration launched earlier this year to put patients’ health information into their own hands and make health care data more useful to consumers:

  • Blue Button 2.0: As part of MyHealthEData, CMS in March 2018 launched Blue Button 2.0, which allows Medicare beneficiaries to take charge of their own claims data by providing it to them in a universal, secure digital format. Blue Button 2.0 is a developer-friendly, standards-based API enabling beneficiaries to connect their claims data to the applications, services and research programs they choose.
  • Promoting Interoperability: CMS, in the proposed hospital payment rule issued this week, announced plans to overhaul the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs, which are now known as the Promoting Interoperability programs. CMS has proposed to focus the program requirements on EHR interoperability and providing patients with electronic access to their health information, so data follows the patient and consumers can take ownership of and access their records in a useable format.

The administrator’s remarks at the 2018 Health Datapalooza will be available after her speech at: https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2018-Press-releases-items/2018-04-26-2.html

FDA Publishes Guidance for Development of Medication-assisted Treatment for Opioid Use Disorder

FDA on April 20 published the first draft guidance—of what the agency has promised will be two—to help advance the development of medication-assisted treatment for opioid use disorder. Friday’s guidance outlines what types of studies will support approval of depot buprenorphine products and how best to design efficacy trials, which includes using novel endpoints such as reduction in cravings or improvement in sleep and mood.

The guidance is part of FDA’s plan to expedite development of other new addiction treatments. In its new draft guide, FDA touts the benefits of sustained-release buprenorphine injections.

“Passive-compliance formulations such as sustained-release injectable depots and implants can provide effective treatment of opioid dependence in a treatment paradigm that may be less subject to misuse, abuse, or accidental exposure compared to self-administered formulations such as transmucosal tablets and films,” the guide states.

FDA explains that depot buprenorphine products can be submitted through an abbreviated new drug application (ANDA) or a 505(b)(2) new drug application.

Not all products submitted under a 505(b)(2) NDA will need efficacy trials, as the sponsor could rely on safety and efficacy determinations for already-approved depot buprenorphine formulations, the agency writes.

A proposed product may not need to conduct efficacy trials if it is similar to an approved depot buprenorphine product with regard to: shape and pharmacokinetic profile; time it takes to block exogenous opioids; maximum plasma concentration; minimum plasma concentration; “plateau buprenorphine concentration following initial peak after the first depot injection”; accumulation of buprenorphine after multiple doses; and how long it takes for the drug to clear out after a steady state is reached.

Sponsors that show sufficient similarity should, in their development programs: use human-factor engineering processes, such as training materials for inserting and removing the product; conduct comparative bioavailability pharmacokinetic studies to show exposure to the product is similar to that of an approved product after both a single dose and a steady state after multiple doses; and demonstrate safety of new excipients or materials.

Depot buprenorphine products with novel features, even if submitted under a 505(b)(2) NDA, may still need to conduct safety and efficacy studies, FDA asserts. Sponsors should test for target plasma concentration, perform initial pharmacokinetic studies to identify doses or regiments that deliver the target plasma concentration, provide human behavioral pharmacology data to identify doses in non-treatment-seeking volunteers and consider human-factor issues related to administering the product, the guidance explains.

FDA Retirements

Two directors at the Food and Drug Administration will retire this week, leaving three of the FDA’s 19 drug review divisions without permanent leaders. Dr. Curtis Rosebraugh, who heads an office that oversees three drug review divisions, and Dr. Donna Griebel, who directs the division that reviews drugs for gastrointestinal disease and some metabolic diseases, are retiring effective Saturday, joining a growing list of career officials to leave the FDA in the past year.

FDA Commissioner Announces New Agency Initiatives on Data Analytics and Digital Health

In a speech at Datapalooza on April 26, FDA commissioner Scott Gottlieb announced a number of new agency initiatives aimed at increasing use of data analytics and digital health tools in regulatory decision making and drug development. The agency also unveiled a working model for its emerging digital health software precertification program, as well as a draft guidance clarifying FDA will take a hands-off regulatory approach toward certain functions of digital devices that don’t directly affect the product’s safety and effectiveness.

The most important of these announcements, Gottlieb said, is FDA’s plan to expand “the opportunities for digital health tools to become a part of drug review, to couple these capabilities to drug delivery to form a drug delivery system.”

FDA is setting up a public docket to seek input from technology developers, providers and patients as the agency seeks to encourage innovation in this space, the commissioner said. The agency wants advice on how to promote innovation in digital health functions, integrate these novel products into advanced therapies, support development of digital health tools that are part of approved drugs and regulate in an environment where software rapidly changes.

Gottlieb also unveiled a precertification model that he called “the first, high-level draft of what will be several iterations of our working model for this new program.” He said that FDA still needs input from developers, patients, providers and members of the public on the effort, under which the agency will allow certain companies to take new medical software to market more easily. Gottlieb pointed out “challenge questions” included in the model about each component of the program for stakeholders to respond to.

Gottlieb said the precertification program is designed to keep up with the fast pace of software innovation. The program promises an expedited FDA pre-market review process for new software from companies which prove to FDA that they uphold a “culture of quality” and “organizational excellence,” the agency has said in the past.

“We’re committed to launching ‘Pre Cert 1.0,’ a first version of the program by the end of 2018,” the commissioner said. “Once we get this framework firmly in place, it’ll be further refined in 2019.”

3. Courts

Texas AG Argues ACA Unconstitutional

Texas Attorney General Ken Paxton, who is a lead plaintiff in a case filed by 20 Republican-led states arguing that the Affordable Care Act is unconstitutional, filed a brief asking a federal court to grant a preliminary injunction by Jan. 1, 2019. The coalition of states argues that the elimination of the ACA’s tax penalty for not having health insurance, which was included in the GOP tax overhaul, renders the entire law unconstitutional.

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

StephanieKennan, Senior Vice President

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