Washington Healthcare Update

October 29, 2018

Pardon Our Dust

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This Week: President signs opioid legislation; Administration announces drug pricing plan for Part B drugs; Administration proposes expanded use of HRAs;



In recess for midterm elections.


In recess for midterm elections.





Trump Administration Announces HRA Regulatory Proposal to Prevent Adverse Selection

The Trump administration announced a regulatory proposal to permit employees to go to the individual market to purchase health coverage, and cover the costs via a tax-preferred health reimbursement arrangement (HRA), by 2020.

The rule also allows employers to contribute up to $1,800 in an HRA that can be used to purchase supplemental coverage, including vision, dental or short-term insurance. The administration proposed the creation of a new special enrollment period in the individual market for workers offered the HRAs to purchase health benefits. The proposed rule does not change the current tax treatment of traditional employer-sponsored health insurance. The open comment period on this rule ends Dec. 28.

The proposed regulation can be found here.

President Trump Announces Proposal to Stop Rising Drug Costs

In a speech at the Department of Health and Human Services (HHS) on Oct. 24, President Trump announced a proposal to address the rising costs of prescription drugs. The proposal allows Medicare to directly negotiate prices with drug manufacturers for medications administered under Medicare’s Part B program. The administration contends Part B drug prices are over-priced. Drug manufacturers say Part B drugs are the average price of the commercial market. The proposal also sets drug prices using an international pricing index based on prices in other nations with similar economies.

The Trump administration officials announced the use of the Center for Medicare and Medicaid Innovation, created by the Affordable Care Act (ACA), to carry out the proposal. The Trump administration will accept public comments before starting the project.

President Trump Signs Bipartisan Opioid Legislation

On Oct. 24, President Trump signed into law H.R. 6, the SUPPORT for Patients and Communities Act. The bipartisan opioid legislation passed the Senate on Oct. 3 and directs funding to federal agencies and states to increase access to make addiction treatment a priority. The new law sets in place interventions to help mitigate the opioid crisis with efforts to prevent overprescription and train law enforcement to intercept shipments at U.S. borders.


Plaintiffs Reject DOJ Stance in Short-Term Plan Suit

Plaintiffs in the case to block the Trump administration’s rule expanding short-term health insurance plans are against the Department of Justice’s (DOJ) position that the plaintiffs do not have standing. The plaintiffs, a group of stakeholders, argue the rule violates the intent of the Affordable Care Act (ACA) by steering patients away from ACA-compliant plans. The plaintiffs filed a reply brief on Oct. 22, before the federal D.C. District Court heard oral arguments on Oct. 26 on the motion for the court to immediately suspend the rule.

In the lawsuit, Association for Community Affiliated Plans et al. v. U.S. Department of Treasury, et al., the stakeholders want the court to suspend the short-term health insurance rule prior to the Nov. 1 start of open enrollment.

HHS Asks Federal Court to Put 340B Ceiling Price Lawsuit on Hold

The Department of Health and Human Services (HHS) told a federal court that it will release a proposal Nov. 1 to move the effective date for the 340B ceiling prices and penalties rule to Jan. 1, up from July 1. HHS told the court that a lawsuit based on that original date should be put on hold. The hospital groups suing HHS over multiple implementation delays responded to the D.C. District Court that it is unlikely the Health Resources and Services Administration (HRSA) can make it through the rulemaking process by Jan. 1. The hospitals are also concerned that the rule’s implementation could slip to April, considering HRSA has said changes are only made on a quarterly basis.


FDA: Guidance on Drug Verification System Requirements

On Oct. 24, the Food and Drug Administration (FDA) released a draft guidance on what systems drug companies must have in place to comply with legal requirements regarding the quarantine and investigation of suspect drugs, as well as the quarantine and disposal of illegitimate drugs. The document is part of a series of three other guidances released earlier this fall, all intended to help drug companies and repackagers prepare to comply with approaching deadlines set in stone by the 2013 Drug Supply Chain Security Act (DSCSA).

Read the guidance here.

The Washington Healthcare Update will return on Monday, Nov. 12 

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

Stephanie Kennan, Senior Vice President

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