Washington Healthcare Update

October 15, 2018

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This Week: Senate vote on short-term health plans fails; Trump signs legislation to block gag clauses in drug pricing



The House is in recess until Nov. 13





Senate Vote Fails to Block Trump Administration’s Short-Term Health Plans

On Oct. 10, the Senate failed to block the Trump administration’s expansion of short-term insurance plans. The administration reversed new regulations for insurers to sell short-term health plans outside the Affordable Care Act (ACA) markets for up to a year, rather than the previous limit of three months. Sen. Tammy Baldwin (D-WI) introduced the measure to block the expansion rule. The measure failed with a 50-50 tied vote, not reaching the needed majority. Sen. Susan Collins (R-ME) was the only Republican to vote in favor of the resolution.

Senate Judiciary Committee Chairman Asks FTC to Probe Hospital Contracts

Sen. Chuck Grassley (R-IA), chairman of the Senate Judiciary Committee, asked the Federal Trade Commission (FTC) to investigate whether contracts between insurers and hospital systems are limiting competition and increasing health care costs. Sen. Grassley shared concern about secret contract terms that some hospital systems use to protect business and avoid efforts to curb costs. The contracts can add extra fees and prevent exclusion of doctors and hospitals based on quality or cost.

Senate Budget Republicans Ask CBO to Test New Insurance Model by Redoing ACA Estimates

On Oct. 4, GOP senators on the Budget Committee requested that the Congressional Budget Office (CBO) do a real-world test of its updated health insurance simulation model—which estimates coverage and premiums for the under-65 population. The CBO would redo the initial Affordable Care Act (ACA) coverage and spending estimates to see if they would match more closely to the actual numbers. The senators also asked for more details about the model, known as HISM2, before the CBO uses it to develop 2019 baseline projections and future cost estimates.

Senators Ask Trump Administration to Increase Focus on Maternal Deaths

On Oct. 9, a bipartisan group of senators asked the Trump administration to focus on reducing deaths caused by pregnancy complications. The 14 senators, led by Tom Carper (D-DE), Bill Nelson (D-FL), Tim Scott (R-SC) and Shelley Moore Capito (R-WV), wrote to the Department of Health and Human Services (HHS) asking for a review of existing data and recommendations for action. A bill addressing the issue, Preventing Maternal Deaths Act of 2017, would fund state efforts to study and reduce maternal deaths. The bill, H.R. 1318, passed the Senate health committee and is stalled in the House.

Senators Raise Concerns About FDA Precertification Program for Software

Sens. Elizabeth Warren (D-MA), Patty Murray (D-WA) and Tina Smith (D-MN) raised concerns about the Food and Drug Administration’s (FDA) precertification program in which precertified software developers would not be subject to premarket review. In the letter to the FDA on Oct. 10, the senators asked what statutory authority FDA has to establish the program, what criteria the FDA will use to evaluate firms and how the FDA will continue to hold firms to standards of safety and efficacy. The senators gave the FDA until Nov. 9 to respond.


President Trump Signs Bills Banning Drug Pricing “Gag Clauses”

On Oct. 10, President Trump signed two bills that stop insurers from enforcing “gag clauses” that stop pharmacies from telling customers about how to save money on prescription drugs. The Patient Right to Know Drug Prices Act and the Know the Lowest Price Act are intended to help patients find out whether a prescription would cost less if they were to pay for it out of pocket rather than with their health insurance. Under the measures, pharmacists are not obligated to tell a customer about the lower cost, but are no longer forbidden from sharing the information with patients.

DOJ Approves CVS Health and Aetna $69 Billion Merger

On Oct. 10, the Justice Department (DOJ) approved the $69 billion merger between CVS Health and Aetna. As the last major free-standing pharmacy manager, CVS Health had revenues of about $185 billion last year, and provided prescription plans to roughly 94 million customers. Aetna, one of the nation’s largest insurers with about $60 billion in revenue last year, covers 22 million people in its health plans.

The companies have said they will save administrative and patient care costs when they combine, in part by steering Aetna customers to walk-in clinics in CVS stores for less expensive medical services. CVS could offer more preventive care services and screenings in its clinics and plans to cut costs by $750 million annually, two years after the deal closes.

FDA: Draft Guidance on Development of Complex Generic Drugs

On Oct. 9, the Food and Drug Administration (FDA) announced draft guides meant to advance the development of complex generic drug products. Two of the guides detailed how to design and conduct studies for various transdermal and topical delivery systems (TDS), and 25 are product-specific documents intended to help the industry develop generic TDS products. The FDA plans to issue more guidance over the next few months to promote generic competition for complex drugs.

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

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

Part A and B Premium and Deductibles Announced

The Centers for Medicare and Medicaid Services (CMS) announced the 2019 premiums and deductibles for Part A and Part B of Medicare. The Part A deductible will increase $24 dollars to $1364. The majority of beneficiaries do not pay a premium for Part A. The Part B premium will increase to $135.50 per month, up from $134. About 2 million beneficiaries pay less than the full premium due to a statutory provision that holds them harmless if the amount of their premium increase is larger than their social security cost of living increase. The Part B deductible will also increase to $185 dollars from $183.

HHS Expected to Release Proposed Rule to Post Drug List Prices in Ads this Week

The Department of Health and Human Services (HHS) is expected to release a proposed rule that requires drug manufacturers to post the list price of a drug in direct to consumer advertisements. The Senate considered an amendment in the opioid legislation to do the same, but the amendment was dropped from the final legislation. Drug manufactures have opposed this, saying in essence that the list price is not the same price as what consumers would pay.

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

Stephanie rel=”noopener noreferrer” Kennan, Senior Vice President

Founded in 1998,McGuireWoods Consulting LLC(MWC) is a full-service public affairs firm offering infrastructure andeconomic development, strategic communications rel=”noopener noreferrer” & 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 rel=”noopener noreferrer” firms in Washington, D.C.

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