Washington Healthcare Update

June 25, 2018

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This Week: House concludes two weeks of considering opioid legislation….Rescission package fails in Senate on procedural vote….AHP final rule released. 

1. Congress



2. Administration

3. Reports

4. Other

1. Congress


House Oversight Committee Democrats Demand Documents on Gag Rule

In a letter to Secretary Alex Azar, House Oversight Committee Democrats are requesting documents on the proposed gag rule for the Title X program. The issue is separate from the funding and would effectively ban many health care providers from referring patients for abortion. The Democrats are asking for all documents relating to the drafting of the proposed rule, including which HHS employees were involved.

Read the letter.

House Completes Passing Opioid Legislation

On June 22, the House of Representatives concluded two weeks of voting on opioid legislation by approving a package that combines dozens of individual opioid-related bills that the House had approved over the past two weeks. H.R. 6 was passed 396-14 with 13 Republicans and 1 Democrat voting against it. 

It now goes to the Senate, where the Health Education, Labor and Pensions Committee, the Finance Committee and the Judiciary Committee have been working on their opioid legislation. The Senate is expected to act on their package over the summer.

Two provisions that passed the House have been the most controversial:

  • H.R. 5797, the IMD CARE Act sponsored by Rep. Mimi Walters (R-CA), was approved 261-155. It would scale back a federal prohibition on Medicaid reimbursements for substance abuse treatment provided at so-called institutions for mental disease. The bill would allow Medicaid to pay for the treatment of opioid use disorder in such facilities for stays of up to 30 days. To address criticism that the legislation was treating opioid addiction differently than other substance abuse, Rep. Bobby Rush (D-IL) offered an amendment to roll back the IMD exclusion for treatment of cocaine use as well as opioid use. The exclusion would remain in place for all other substance use disorders. 
  • H.R. 6082, the Overdose Prevention and Patient Safety Act sponsored by Rep. Markwayne Mullin (R-OK), was approved 357-57. This legislation would ease confidentiality rules for medical records that contain information about a patient’s history of substance abuse treatment. This legislation is controversial but was supported by the American Hospital Association because they believe the measure would help to improve care for people with substance use disorders.

Those provisions were incorporated into HR 6. Among the other provisions included in HR 6 are: 

  • A measure to expand the authority of non-physicians to prescribe buprenorphine, which is commonly used to treat opioid use disorder through medication-assisted treatment.
  • Various measures to prevent over-prescribing of opioids through provisions like e-prescribing and the identification of outlier prescribers.
  • Measures to educate Medicare beneficiaries about pain medication and screen them for opioid use disorder.
  • Measures to enhance Medicaid coverage for foster care youth and former prisoners.
  • Several measures to expand telehealth services.
  • Several measures to encourage non-addictive or non-opioid pain and addiction therapies, including one that would require FDA to issue guidance clarifying how such therapies can be eligible for expedited approval pathways.


Senate Nixes Rescission Package on Procedural Vote

The Senate voted 50-48 to reject a proposal from the Trump administration to rescind $15 billion in program funding, including $7 billion from the Children’s Health Insurance Program on a procedural vote. Sens. Susan Collins (R-ME) and Richard Burr (R-NC) broke from the Republicans to vote against the package in the procedural vote, and Senate GOP leaders have until Friday to pass the cutbacks measure with a simple majority before special procedural powers end and a 60-vote threshold begins.

Had the bill moved beyond the procedural vote, it was expected that there would be a motion to strike the $7 billion reduction from the Children’s Health Insurance Program fund to alleviate Democrats’ concerns. 

2. Administration

Association Health Plan Final Rule Released

The Trump administration on June 19 finalized a highly anticipated rule expanding the ability of employers to band together to create association health plans (AHPs). Supporters say the rule offers consumers more coverage choices and opponents worry the rule will destabilize existing markets and put consumers at risk of inadequate coverage. The rule keeps many of the proposed provisions on non-discrimination but does not restrict ratings based on non-health factors, including age and geography. The U.S. Department of Labor (DOL) also responded to feedback and will now require an AHP to have at least one business purpose other than providing insurance coverage.

The rule will be finalized in 60 days, but the administration opted to stagger the implementation dates. Any existing or new plan may establish a fully insured AHP on or after Sept. 1, 2018. Existing associations that sponsored an AHP on or before the date the final rule was published may establish a self-funded AHP on or about Jan. 1, 2019, and all other associations new or existing may establish a self-funded AHP on April 1, 2019.

Regulators and insurance experts are also concerned that the new rule expanding association health plans for small businesses and self-employed people will lead to a spike in insurance fraud and insolvencies that plagued consumers and health care providers in the past. The attorneys general from New York and Massachusetts are already planning to sue the Trump administration over the association health plan, saying the rule promotes fraud and abuse and steps on congressional turf. The two attorneys general had signed a March letter along with 17 other AGs that laid out why they believed the proposed version of the rule, if finalized, would violate the law—offering a glimpse at the potential legal arguments in their upcoming suit.

An issue for some stakeholders was clarification that the federal government would have regulatory authority over the plans. Stakeholders also asked the administration to create an exemption from ERISA for self-insured AHPs that would allow them to avoid navigating various state laws.

The administration instead said that states and the federal government still have joint authority to oversee plans. DOL also said the ERISA exemption for self-insured plans is beyond the scope of the rule, but still a possibility for the future.

The final rule supports the idea of ensuring that AHPs have a business purpose other than supplying insurance coverage. AHPs must also comply with non-discrimination rules under HIPAA, and DOL also says plans cannot discriminate based on health factors. However, DOL did not adopt age-rating restrictions in the final rule and wrote that an AHP’s ability to discriminate based on non-health factors is subject to state regulation. The administration says it took into account comments urging the DOL to prevent discrimination based on non-health factors, such as age, gender, industry, occupation and geography, in the final rule but ultimately decided to give authority to the states.

CMS Launches Review of Anti-kickback Rules

CMS is now soliciting feedback on how to change physician self-referral rules as part of their efforts to lower health care costs. The 1989 law known as the Stark Law largely bars a doctor from referring patients to care settings where that doctor could see some financial gain. The law and subsequent regulations were put in place to prevent unnecessary care, but conservatives say they could be hindering efforts to better coordinate care and keep down spending.

Read the request for information.

3. Reports

GAO: Veterans Health Administration: Steps Taken to Improve Physician Staffing, Recruitment and Retention, But Challenges Remain. GAO-18-623T: Published: June 21, 2018. Publicly Released: June 21, 2018

The GAO found that VHA needed to: 

  • Provide additional guidance on how to determine the staff size needed in some specialty areas. VHA reports this will be done by December.
  • Comprehensively evaluate its recruitment and retention strategies’ effectiveness. VHA reports taking steps to address this.
  • Determine the number of contract and trainee physicians at its centers. VHA says it does not need this information for workforce planning.

Read the report.

4. Other

Conservatives Unveil New Plan to Replace ACA

A group of conservative health care leaders from various DC think tanks on Tuesday (June 19) floated a plan to replace the Affordable Care Act with a state block grant program and expressed hope the bill will gain traction even though almost all Republican lawmakers have said they don’t want to revisit the ACA repeal debate in 2018. The conservatives’ plan came as GOP House members offered a budget proposal that would allow lawmakers to fast-track an ACA repeal bill via reconciliation.

The conservative group, led by former Sen. Rick Santorum (R-PA), has been attempting for several months to revive an Obamacare repeal effort patterned after the failed legislation by Sens. Lindsey Graham (R-SC) and Bill Cassidy (R-LA), with little success.

The plan would repeal the ACA’s premium tax credit and cost-sharing subsidies and end Medicaid expansion, though a state could continue its Medicaid expansion via a block grant. But, over half of the block grant would be required to go toward providing coverage for low-income consumers and half toward supporting people’s purchase of private insurance. The plan notes that these two categories may overlap.

Anyone currently eligible for financial assistance under the block grant, Children’s Health Insurance Program or Medicaid could take the value of their premium assistance to purchase a private plan of their choice.

The plan also stipulates that a portion of the block grant go toward people with preexisting conditions to ensure they receive care and don’t drive up premiums for healthy consumers.

The plan also would abolish the ACA’s requirements on essential health benefits, single risk pools, medical loss ratios and the 3:1 age ratio.

The plan does not include any specific spending or saving estimates, but the Center for American Progress estimates the conservative plan could cut ACA funding by 31 percent by 2028 and slash Medicaid funding by $649 billion from 2022-2028.

House Minority Leader Nancy Pelosi (D-CA) said that Democrats will continue to work to protect the health law.

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

StephanieKennan, Senior Vice President

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