Washington Healthcare Update

December 10, 2018

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This Week: Congress averts government shutdown by passing two-week extension for Continuing Resolution, pushing the funding issues to Dec. 21.









Bipartisan, Bicameral Legislators Unveil FDA-Inspired Bill Regulating Diagnostic Tests

On Dec. 6, bipartisan House and Senate members released draft legislation for the Food and Drug Administration (FDA) to regulate in vitro clinical tests, including test kits and laboratory-developed tests (LDTs). The draft legislation resembles a legislative proposal put forward by the FDA in August.

The bill establishes a precertification program for lower-risk tests, where the FDA could establish standard validity requirements for non-novel, lower-risk tests. Reps. Larry Bucshon (R-IN) and Diana DeGette (D-CO) and Sens. Michael Bennet (D-CO) and Orrin Hatch (R-UT) introduced the bill, prioritizing the legislation in the 116th Congress.


Grassley, Wyden Introduce “The Right Rebate Act”

On Dec. 4, the incoming Senate Finance Committee chair Chuck Grassley (R-IA) and Ranking Member Ron Wyden (D-OR) introduced “The Right Rebate Act of 2018,” a bill to recoup Medicaid rebates from drug companies that misclassify drugs. Grassley and Wyden’s new bill would give HHS more power to recoup the full amount lost if companies misclassify their products in the future. It also would give HHS the ability to directly modify a drug’s classification, which HHS cannot currently do. The legislation is based on recent events related to the misclassification of a popular anti-allergy medicine as a generic instead of a brand-name product. That incorrect classification allowed the manufacturer to pay smaller rebates to states and government programs.

The bill also would let the government fine companies up to twice the amount in rebates they avoid by misclassifying brand drugs as generics, allow the Centers for Medicare and Medicaid Services (CMS) to suspend Medicaid coverage of drugs that companies refuse to reclassify and give the CMS power to force classification changes.


Trump Administration Calls for HSA, HRA Expansion

On Dec. 3, the Trump administration released a series of health policy recommendations to reduce barriers to competition in the individual and other markets, loosen network adequacy restrictions, expand access to health savings accounts and eliminate the employer mandate, altering the Affordable Care Act’s non-discrimination provisions. The report also includes a push to put consumers in direct control of their health spending. The Department of Health and Human Services (HHS), the Department of the Treasury and the Department of Labor jointly released the recommendations. Many of the recommendations have already been considered or passed by the committees of jurisdiction under GOP leadership.

Read the report here.

CMS Approves Medicaid Work Requirements in New Hampshire

On Nov. 30, the Centers for Medicare and Medicaid Services (CMS) allowed New Hampshire to move forward with a program of Medicaid work requirements, as well as a transition of the state’s expansion population from the exchanges to Medicaid managed care and the elimination of retroactive coverage for beneficiaries in the expansion population. CMS did not respond to New Hampshire’s requests to use asset testing and citizenship verification to determine Medicaid eligibility.

Medicaid work requirements are still being challenged in the courts. A lawsuit challenging Arkansas’s work requirements was filed in August and at a recent hearing, the state and the federal government argued that even if CMS exceeded its authority, the work requirements should be allowed to stand while CMS and the state fix what the judge deems needing changes.

CMS Extends Non-Emergency Ambulance Prior Authorization

On Dec. 4, the Centers for Medicare and Medicaid Services (CMS) again extended the prior authorization program for non-emergency, repetitive ambulance trips. The program extends for an additional year, through Dec. 1, 2019, in Delaware, Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina, Virginia, West Virginia and D.C.

OMB Reviews Final Version of 2016 Medicare Provider Enrollment Rule

On Dec. 3, the Office of Management and Budget (OMB) began reviewing a final rule aimed at improving the Medicare provider enrollment process in order to beef up program integrity. The proposed version, released in early 2016 under the Obama administration, called for removing or preventing enrollment of providers who try to avoid Medicare requirements with name and identity changes, and increasing the maximum amount of time that a provider can be removed from Medicare. The Center for Medicare and Medicaid Services’s (CMS) regulatory agenda notes that final rules for the provider enrollment rule are due March 1, 2019.


Supreme Court to Hear Case on CMS’s Rulemaking Authority in Jan. 2019

On Jan. 15, the Supreme Court will hear arguments for Azar v. Allina Health Services, a case that could define the extent of the Center for Medicare and Medicaid Services’s (CMS) authority to issue legal interpretations without conducting notice-and-comment rulemaking. The case involves the calculations of hospital payment adjustments for the 2012 payment year and CMS’s new formula to calculate the adjustments, leading to lower payments to disproportionate share hospitals.


FDA Clarifies Procedures for Generics to Request Meetings Post-CRL

On Dec. 3, the Food and Drug Administration (FDA) released a report to clarify the procedures for generic drug manufacturers to request meetings with the agency after receiving complete response letters (CRL) indicating deficiencies in their applications. The final guidance attempts to reach the goals of the latest generic drug user fees by helping to cut down on the number of review cycles needed to approve a drug.

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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