Washington Healthcare Update

September 24, 2018

Pardon Our Dust

We recently launched this new site and are still in the process of updating some of our archived content. Some details of this article may be incomplete, links may be broken, and other elements may not display properly yet. We appreciate your patience and understanding.

This Week: Labor-HHS funding approved by Senate in “minibus”; Grassley looks at nursing home data on preventable errors; FDA announces penalties for researchers if false or partial data submitted; “Public Charge” rule proposed.



The House is in recess, returning Sept. 25.







Senate Judiciary Committee Asks CMS for Data on Nursing Home Safety

On Sept. 20, Sen. Chuck Grassley (R-IA), chairman of the Judiciary Committee, asked the Centers for Medicare & Medicaid Services (CMS) to clarify the tracking and prevention of errors in nursing homes. In a letter to CMS Administrator Seema Verma, Grassley cited a CMS oversight report that found one-third of Medicare beneficiaries experienced some harm during their stay in nursing homes, with most of those events likely preventable. Sen. Grassley recommends more data to craft necessary policy fixes.

Senate Proposes Limits on Surprise Health Care Billing

On Sept. 20, a bipartisan group of senators proposed legislation to limit surprise health care billing, which can leave consumers with significant medical debts. The Protecting Patients from Surprise Medical Bills Act would limit the ability of health care providers to charge significantly higher prices for out-of-network services.

The draft legislation would prohibit providers from charging a patient the difference between what a payer covers and the cost of an out-of-network ED visit. Payers then pay the difference between a provider’s costs and the health plan’s current benefit allowance.

The bill sets specific rates for how much payers are required to pay if patients use nonemergency services out of network within certain regions. The bipartisan senators included a provision that would require providers to disclose when they are referring patients to additional out-of-network services. The act also would require the Department of Health and Human Services (HHS) to conduct a feasibility study by 2025 about the impacts of the bill on cost sharing, access to care, health care costs and emergency care use.

Sens. Bill Cassidy (R-LA), Michael Bennet (D-CO), Chuck Grassley (R-IA), Tom Carper (D-DE), Todd Young (R-IN) and Claire McCaskill (D-MO) sponsored the act.

Senate Passes Defense and Labor-HHS Appropriations Minibus

On Sept. 18 the Senate passed the final conference agreement on H.R. 6157, the Department of Defense, Labor, Health and Human Services, Education, and Related Agencies minibus appropriations bill. The bill also provides for funding until Dec. 7 for federal agencies for which appropriations have not yet been completed. The conference report, which was negotiated between the House and Senate:

  • Increases NIH funding of $2 billion;
  • Provides CDC $7.9 billion for threats like pandemics and $2 billion to prepare for and prevent public health social services emergencies with programs such as biomedical research and acquisition of medical supplies and hospital preparedness grants;   
  • Creates the first Infectious Diseases Rapid Response Reserve Fund where funds only become available for use in the event of a future public health emergency; and
  • Provides $6.7 billion in funding to combat the opioid epidemic. This funding will go toward activities authorized under the 21st Century Cures Act and other addiction and recovery funds. This legislation also provides increases for state opioid response grants.      

CHIP Funds Cut with Democratic Support

On Sept. 19, the Senate voted to cut $7.7 billion in unused Children’s Health Insurance Program (CHIP) funds. Both parties agreed to reduce the funding because it will have no effect on CHIP operations. Democrats maintain that the reason they could support this reduction when they have opposed it in the past is that this version of the reductions will allow funds to be reinvested into other health, education and labor programs. President Trump’s proposed reductions in CHIP eliminated the funds altogether.


FDA Announces Penalties for Researchers if False or Partial Data Submitted

On Sept. 20 the Food and Drug Administration (FDA) announced civil monetary penalties for researchers who submit false or incomplete data to the government’s clinical trials database. The FDA’s new guidance came in response to reports of medical centers’ failing to submit data to ClinicalTrials.org—the data submission website monitored by the agency.

The new guidance specifies penalty assessments:

  • With data submission irregularity or through its own investigations of a complaint, the FDA can submit a preliminary letter notifying the institution of noncompliance.
  • Failure to resolve the problem culminates in a fine of $10,000 plus an additional $10,000 per day of noncompliance after the initial fine.

Read the draft guidance here.

“Public Charge” Regulation Posted By Homeland Security

On Sept. 22, The Trump administration proposed a new rule under which immigrants can be denied “lawful permanent residency” if they have received certain government benefits, or the government anticipates that they may do so in the future.  This rule, which comes for the Department of Homeland Security targets the Supplemental Nutrition Assistance Program (food stamps), Temporary Assistance for Needy Families (welfare), Medicaid, and Medicare Part D (prescription drug subsidies).

The regulation could force millions of low-income families to choose between government assistance and permanent settlement in the United States. Advocates fear it could ultimately restrict children’s access to food and health care.

The move will affect mainly legal immigrants and their families, since undocumented immigrants are not eligible for most federal benefits.

In a departure from leaked drafts, the proposed rule won’t target immigrants who have received subsidized health insurance under the Affordable Care Act or the Children’s Health Insurance Program. The rule also does not impact the Earned Income Tax Credit, a refundable tax break for low- to moderate-income families.

In addition, immigrants won’t be penalized if their children are U.S. citizens and receive government benefits. If their children are not U.S. citizens, benefits they receive can be judged evidence that the parents will require government assistance, allowing denial of permanent residency.

DHS will seek broad public comment on the rule, a process that typically takes one year. Among the unresolved questions is whether to allow refusal of benefits based on participation in the Children’s Health Insurance Program (CHIP), which provides low-cost coverage to families that earn too much to qualify for Medicaid.

Even without a change in policy, immigrants are already turning down government subsidies to help buy staple foods and infant formula for fear that it could bar them from receiving a green card. 

The proposed regulation would provide a more robust enforcement mechanism for longstanding statutory boilerplate that bars immigrants “likely to become a public charge.” Immigration law doesn’t define the phrase explicitly.  However, age, health, family status, financial resources, education, and skills can be taken into account.  Guidance issued under President Bill Clinton, further outlined that immigrants could be considered a public charge if they were “primarily dependent” on government benefits, but narrowly defined those benefits as cash assistance or long-term, institutionalized care. This proposed rule greatly expands that definition.

Under the rule, an immigrant could be denied a green card if he or she received government benefits of up to 15 percent of the federal poverty level — currently $1,821 for an individual and $3,765 for a family of four, according to the two people briefed on the latest version. The proposed regulation would offer a more generous cushion for immigrant families than an earlier draft that set the yearly threshold at just 3 percent of the poverty level.

The question of how the proposed rule applies to deportability remains unclear.


Six States File Seek Court Order to Block the IRS from Collecting Tax on Medicaid Plans

Six GOP-led states filed suit on Sept. 21as an effort to block the IRS from collecting an ACA tax that Medicaid plans are required to pay Oct. 1. The states are seeking an immediate court order that would bar the IRS from collecting an estimated $675 million in 2018 payments under the controversial tax known as the Health Insurance Providers Fee.

The HIPF is a tax created by the Affordable Care Act and assessed against most health insurers, including the managed-care companies that operate large portions of many states’ Medicaid programs. The six states argue that federal regulations have unlawfully required states to cover the cost of the tax by including that cost in the capitation rates that the states pay to their Medicaid plans.

Initially, the states sought this action as part of an existing federal lawsuit involving a legal challenge to the way the tax was assessed in previous years. On Sept. 20, the judge in that case ruled it was too late for the states to amend that lawsuit and seek new relief. The states—Texas, Kansas, Louisiana, Indiana, Wisconsin and Nebraska—responded to that ruling the next day by filing a new lawsuit aimed solely at the 2018 tax year.

The states argue that, if the IRS is allowed to collect the tax from the states’ private Medicaid plans on Oct. 1 as scheduled, the states will be on the hook to reimburse the plans for the cost of paying that tax even though states are supposed to be exempt from paying it.

Federal law requires Medicaid capitation contracts to be actuarially sound. Federal law also exempts states from paying the HIPF tax. The states argue that the only way to reconcile these two provisions is for the IRS to stop collecting the tax from Medicaid plans altogether.

Congress suspended collection of the tax in 2017 and 2019, but it is in effect for 2018.


Centers for Disease Control & Prevention (CDC) Report: U.S. Mortality Rates

On Sept. 20 the Centers for Disease Control and Prevention (CDC) announced that death rates increased for five of the leading twelve causes of death from 2000 to 2016. The CDC report listed the five leading causes of death as unintentional injuries, Alzheimer’s disease, suicide, chronic liver disease and septicemia.

Read the report.

Centers for Medicare & Medicaid Services (CMS) Report: Medicaid Spending Hits $592.2 Billion in 2017

On Sept. 20 the Centers for Disease Control and Prevention (CDC) reported that Medicaid spending hit $592.2 billion in 2017, up from the $580.9 billion spent on Medicaid in 2016. Federal expenditures account for $370.6 billion of the $592.2 billion spent in 2017. The majority of spending was on traditional Medicaid enrollees, while the adult expansion population cost $70.6 billion in 2017, up from $66.5 billion in 2016.

CMS Administrator Seema Verma is concerned about able-bodied adults threatening the long-term viability of the Medicaid program; for almost two years, CMS approved numerous waivers allowing work requirements and coverage lockouts on the expansion population for nonpayment of premiums. Still, Medicaid spending is expected to grow over the next 10 years at an average annual rate of 5.7 percent and an enrollment of 82.3 million by 2026.

Read the report.

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

Stephanie Kennan, Senior Vice President

Founded rel=”noopener noreferrer” in 1998,McGuireWoods Consulting LLC(MWC) is a full-service public affairs firm offering infrastructure andeconomic development, strategic communications & grassroots, and governmentrelations services. rel=”noopener noreferrer” 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.

To rel=”noopener noreferrer” sign up for the Weekly Washington Healthcare Update, use our onlinesubscription form.

McGuireWoods Consulting LLC
2001 K Street
Suite 400
Washington, DC 20006-1040
+1 202 857 1700