Washington Healthcare Update

September 4, 2018

Pardon Our Dust

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This Week: The House and Senate return for final action before midterm elections. The House has only 11 legislative days left. Appropriations and opioid legislation are among the must-do items.

1. Congress



2. Administration

1. Congress


House Energy and Commerce Committee and Senate Health, Education, Labor and Pensions Committee Leaders Call on HRSA to Use Their Authority on 340B

House Energy and Commerce and Senate Health, Education, Labor and Pensions committee leaders have raised concerns that the Health Resources and Services Administration (HRSA) is not using its existing 340B rulemaking authority. This comes at a time when HRSA is asking Congress for greater authority over the 340B program.

HRSA’s rulemaking authority was limited by a court decision to three areas: alternative dispute resolution, civil monetary penalties and calculating ceiling prices. However, the committees’ leaders wrote in an Aug. 27 letter to HRSA that the agency is asking for more authority, even though it hasn’t finished rules in the areas where it can make rules. The congressional committees urged HRSA to take action and implement rules in the areas over which it does have authority.


Senate Passes Labor-HHS Appropriations Proposal

On Aug. 23, the Senate passed a package that combined the defense appropriations legislation along with the Labor-HHS and related agencies proposal. The measure was approved by a vote of 85-7.

Read the summary.

Baldwin Introduces Bill to Unravel Short-Term Health Plan Rule

Sen. Tammy Baldwin (D-WI) introduced legislation on Aug. 29 to overturn the Trump administration’s rule expanding access to non-Affordable Care Act insurance plans. Baldwin’s office has stated that she has the support of the 30 senators necessary to force a vote on the measure under the Congressional Review Act. 

The Trump administration on Aug. 1 finalized regulations to expand short-term health insurance plans, allowing them to last up to one year instead of three months.

2. Administration

HHS OIG Asks for Feedback on Anti-Kickback and Physician Self-Referral Coordination

The HHS Office of Inspector General is asking for feedback on how to coordinate anti-kickback and physician self-referral (also known as the Stark Law) as well as how to set up safe harbors to help alternative pay models and the possibility of letting providers waive copays or provide other incentives to beneficiaries as a way to promote care engagement. The HHS OIG released its request for information on the anti-kickback laws on the same day feedback was due to CMS on possible changes to the Stark Law. Both RFIs are part of HHS’s initiative to identify regulatory requirements that may act as barriers to care coordination, discern whether those provisions are unnecessary and issue guidance or revise the regulations, according to HHS.

The office also asks (1) how aspects of the Bipartisan Budget Act of 2018 that allow accountable care organizations to provide beneficiaries with certain incentive payments and offer end-stage renal disease patients receiving home dialysis telehealth technologies should be implemented; (2) stakeholders how to lay out potential value-based arrangements, alternative pay models and care coordination efforts they are interested in pursuing, and how those might be impacted by the anti-kickback statute, as well as their benefits. The office also asks how value should be defined and used in a safe harbor or exception, so that OIG could evaluate the value of an arrangement to determine if it complies with such an exemption; (3)  how the waivers for CMS’s innovation center models and Medicare Shared Savings Program ACOs are working, and if safe harbors for beneficiary incentives are necessary to protect certain value-based arrangements; and (4) for feedback on the intersection of health technology, cybersecurity and the anti-kickback statute.

CMS to Allow Indication-based Formulary Design in Medicare Part D in 2020

The Centers for Medicare and Medicaid Services said in a memo that starting in 2020, Medicare Part D plans can adjust their formularies to cover the best drug for each patient condition, which it said would increase the plans’ power to negotiate lower prices with drug companies and provide beneficiaries with a wider range of options.

Prior to the announcement on Aug. 29, Part D plans were required to cover all FDA-approved indications for a drug. Now a Part D plan can choose to cover only certain indications, but it must ensure that there is another therapeutically similar drug on the formulary for the non-covered indication.

The idea was in the Trump drug-pricing blueprint and the top three Part D plan sponsors. Critics are concerned that the concept will bring about higher prices. For example, The Pew Charitable Trusts stated, “For drugs that are currently priced for a low-value, high-volume use, enforceable indication-based pricing may actually lead to higher drug spending. In this instance, manufacturers would raise the price for the uncommon, high-value use without concern that insurers would restrict access for the common, low-value use, which may increase overall drug spending.”

CMS Seeks a Different Judge in Kentucky Case

CMS is seeking to have a lawsuit challenging Arkansas’s planned Medicaid work requirements transferred to a different judge after the case was assigned to Judge James Boasberg, who ruled in June against Medicaid work requirements in Kentucky.

Judge Boasberg, who sits on the U.S. District Court for the District of Columbia, invalidated CMS’s approval of Kentucky’s 1115 waiver after finding that CMS failed to explain how it would promote the objectives of the Medicaid statute. Earlier this month, advocates for beneficiaries filed a new lawsuit in the same court challenging CMS’s approval of an Arkansas waiver authorizing work requirements. The Arkansas lawsuit was designated as a related case to the Kentucky lawsuit and assigned to Boasberg under court rules.

CMS is asking the case be randomly reassigned to one of the court’s 23 judges.

The court’s rules define two cases as “related” if they “involve common issues of fact” or “grow out of the same event or transaction,” among other criteria.

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

Stephanie Kennan, Senior Vice President

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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