Washington Healthcare Update

October 8, 2018

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This Week: D.C. obsessed with Supreme Court nomination; opioids legislation hits the president’s desk for signature; 340B continues to be of concern to hospitals.










House and Senate Urged to Protect 340B Drug Discount Program

In an Oct. 2 letter, more than 700 hospitals and health systems urged House and Senate leadership to protect the 340B drug discount program in light of recent regulations and legislative proposals. In the 2018 hospital outpatient pay rule, the Center for Medicare and Medicaid Services (CMS) cut hospitals’ Medicare reimbursement for 340B drugs by almost 30 percent. CMS has proposed to extend Medicare reimbursement cuts to off-campus facilities in the 2019 hospital outpatient pay rule.

Hospitals also raised concerns about the Health Resources and Services Administration’s (HRSA) repeatedly pushing back the 340B ceiling price and penalties rule and have sued to force implementation of the final rule. On the legislative side, the hospitals have raised concerns that a number of bills introduced in both chambers, mostly by Republicans, could limit the program.


Senate Sends Bipartisan Opioid Package to be Signed into Law

On Oct. 3, the Senate passed the final version of the opioids, by a vote of 98-1, with Sen. Mike Lee (R-UT) in opposition and Sen. Ted Cruz (R-TX) not voting. The bill now goes to the White House for President Trump’s signature. The finalized bill would accelerate research to find a nonaddictive painkiller, ease restrictions on which health care professionals could prescribe medication-assisted treatment and increase support for state prescription drug monitoring programs to prevent abuse. The legislation seeks to prevent illicit opioids from being shipped to the United States through international mail, provide grants to a variety of substance abuse prevention programs and make numerous smaller changes to Medicaid and Medicare.

The package also includes newer language aimed at closing a loophole in separate gag-order legislation that requires biologics makers to report pay-for-delay settlements to the Federal Trade Commission (FTC).

Not included in the legislation was an effort by brand-name drug manufacturers to get changes made to the Part D donut hole. It is likely they will make an effort to lower their Part D liabilities during a lame duck session.


OMB Reviewing Physician Fee Schedule and Part B Rule

The White House’s Office of Management and Budget is reviewing the final physician fee schedule and Part B rule. Of concern to stakeholders is the possible inclusion of controversial drug-pricing measures. The proposed version of the rule included cuts to Part B drugs and an overhaul of how Medicare pays for office visits, as well as how doctors document those visits.

Officials from the Department of Health and Human Services (HHS) supported the proposal from the Center for Medicare and Medicaid Services (CMS) to cut doctors’ pay for administering new biologics as a drug price-cutting measure. House Ways & Means Chair Kevin Brady (R-TX) and health subcommittee chair Peter Roskam (R-IL) urged CMS to reconsider the proposal. Many physician groups, including doctors who stand to benefit from the change, oppose a separate proposal to consolidate pay rates for office visits.

CMS to Increase Oversight of Hospital Watchdogs

On Oct. 4, the Trump administration announced increased oversight of organizations that accredit and inspect most U.S. hospitals. The Centers for Medicare and Medicaid Services (CMS) grants accrediting authority and confirmed it will change the way it measures the performance of accrediting organizations in a pilot project and will provide the public with new information about accreditors’ and hospitals’ performance.

Additional federal action is expected in the fall that could require new regulations. The agency is concerned about potential conflicts of interest in the industry. The actions by CMS are aimed at the nation’s 10 federally approved health care accreditors. Additionally, the House Energy and Commerce Committee launched an investigation into the organizations earlier this year. The committee’s process is ongoing.


Hearing on Short-Term Plan Injunction Set for Oct. 26 as New Rule Goes into Effect

On Oct. 2, a District of Columbia federal judge scheduled a hearing for Oct. 26 on stakeholders’ motion to immediately suspend the administration’s short-term health plan rule. The plaintiffs filed the motion for preliminary injunction on Sept. 28, arguing that the short-term health plan rule finalized in August is unlawful because it undermines the structure of the Affordable Care Act and irreparably harms the insurance market, among other reasons.

Under the new federal rule, that went into effect Oct. 2, short-term plans can run for up to 364 days and may be extended for up to three years. The rule reversed Obama-era rules that limited the plans to 90 days. Judge Richard Leon ordered the defendants to file a response to the motion for preliminary injunction by Oct. 15, and the plaintiffs must reply by Oct. 22.


CMS: Reforms to Medicare’s Local Coverage Determination (LCD) Process

On Oct. 3, the Centers for Medicare & Medicaid Services (CMS) announced changes to the way contractors decide which technologies are covered and published a revision to Medicare’s Program Integrity Manual to reflect the changes. The changes and the updated manual responds to Congress’ requirement in the 21st Century Cures Act for more transparency in the LCD process and aims to ensure an open LCD process that meets patients’ needs.

Medicare Administrative Contractors (MACs) determine which health care items and services meet requirements for Medicare coverage—taking into account local variations in the practice of medicine—through “local coverage determinations” or LCDs. LCDs are issued when national determinations do not exist, or when MACs need to further define a national determination. The changes and the updated manual responds to Congress’ requirement in the 21st Century Cures Act for more transparency in the LCD process and aims to ensure an open LCD process that meets patients’ needs.

The Medicare Program Integrity Manual includes instructions, policies and procedures that MACs use to administer the Medicare fee-for-service program. Chapter 13 of the manual addresses LCDs. The manual revisions announced are the first revisions since August 2015.

Read the manual revisions here.

FDA: Draft Guidance on Citizen Petitions and Petitions for Stay of Action

On Oct. 2, the Food and Drug Administration (FDA) issued draft guidelines that restrict the filing of citizen petitions for the purpose of delaying approval of biosimilars. Under the new guidelines, the FDA’s annual reports filed with Congress would cite improper use of these petitions, and the FDA may refer the petitions to the Federal Trade Commission (FTC). The FTC could then conduct an antitrust inquiry. The open comment period for these guidelines closes on Dec. 3 of this year.

Read rel=”noopener noreferrer” the draft guidance here.


Iowa to Sell Health Plans That Can Disqualify People Based on Pre-Existing Conditions

New health plans sold through Iowa’s Farm Bureau will ask applicants if they have any pre-existing conditions related to mental health, blood pressure, reproductive system, lungs or the respiratory system, among others. The Iowa Farm Bureau confirmed some applicants with pre-existing condition could be turned away or face higher premiums, yet did not provide the specific conditions defined as “pre-existing.”

According to the bureau’s checklist, if an applicant says they were treated for any of the 16 conditions in the past five years, they are required to provide detailed explanations of the treatments, medications and current status.

The plans were made into law by Iowa Gov. Kim Reynolds (R) in April, allowing the Iowa Farm Bureau to collaborate with Wellmark Blue Cross Blue Shield on self-funded “health benefit plans.” To be eligible, applicants must be an Iowa Farm Bureau member living in the state, and not eligible for Medicare, Medicaid or an employer group health plan. The plans, which will be available starting Nov. 1, are expected to be much cheaper than plans sold on the state’s ObamaCare (Affordable Care Act) exchange because they do not have to meet federal requirements. The Iowa law takes advantage of a loophole in ObamaCare by contending that health benefit plans offered by the Farm Bureau and Wellmark are not actually health insurance plans.

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

Stephanie Kennan, rel=”noopener noreferrer” 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 rel=”noopener noreferrer” 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 rel=”noopener noreferrer” Washington, D.C.

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