Washington Healthcare Update

December 17, 2018

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This Week: The Affordable Care Act was found unconstitutional, but nothing will change as it winds through the courts. As the 115th Congress comes to a close, last-minute bills are introduced, some healthcare legislation passed and CBO releases its biannual book of ideas to reduce the deficit. It is unclear if the government will shut down or not; the continuing resolution runs out on the 21st.









House Passes Medicaid Package, Includes Senate Drug Misclassification Bill

The House of Representatives voted 400-11 to pass a health care bill (H.R. 7127) that includes the ACE Kids Act, legislation that would allow state Medicaid programs to use a health home model to coordinate care for children with medically complex conditions. Among other provisions, the bill would maintain spousal impoverishment protections, require states to come into compliance with asset verification requirements and provide for civil monetary penalties against manufacturers that knowingly misclassify drugs under the Medicaid Drug Rebate Program.

Ways and Means Chair Pushes Device, Insurance, “Cadillac” Tax Delays by End of the Year

On Dec. 10, outgoing House Ways and Means Committee Chairman Rep. Kevin Brady (R-TX) introduced a revised tax and IRS oversight package that also includes the delay and repeal of certain Affordable Care Act taxes. The legislation would include a five-year delay of the medical device tax, a two-year delay of the health insurance tax and a one-year delay of the Cadillac tax—delays that were Republican priorities in the Save American Workers Act, which never reached a floor vote. The chairman believes the bill could pass with bipartisan support before Christmas.

Text of the revised tax package can be located here.

Ways & Means Republicans Introduce Medicare Red Tape Reduction Package

On Dec. 11, the House Ways and Means Republicans introduced a package of seven bills as part of their Medicare Red Tape Relief Project. The legislation includes proposals to permanently eliminating physician supervision requirements for critical access hospitals, repealing the 96-hour rule for critical access hospitals and requiring prior authorization notification and a study on simplification.


Senate Democrats Introduce Bill for HHS to Block Drug Price Rises

On Dec. 13, Democratic Sens. Richard Blumenthal (CT), Kamala Harris (CA), Amy Klobuchar (MN) and Jeff Merkley (OR) introduced legislation allowing the government to prohibit prescription drug price hikes if they are unjustifiably expensive. The Curbing Unreasonable Rises and Excessively (CURE) High Drug Prices Act allows the Department of Health and Human Services (HHS) to prohibit drug price increases that it decides are excessive.


CMS: Final Rule to Continue Risk Adjustment Payment

On Dec. 7, the Centers for Medicare and Medicaid Services (CMS) issued a final rule on 2018 risk adjustment methodology and provided an explanation of its risk adjustment methodology. The final rule made no changes to the proposed rule and explained actions taken to make the program budget-neutral. CMS expects to provide issuers $4.8 billion in risk adjustment transfers for the 2018 benefit year.

Read the final rule here.

FDA: New Guidance to Assure the Quality of Compounded Drugs

On Dec. 10, the Food and Drug Administration (FDA) released new draft guidance to make it easier for compounding pharmacies to become outsourcing facilities and make sure those facilities maintain current good manufacturing practices (CGMP). The guidance, which revises a 2014 draft guidance on the same topic, is the first in a series of steps to ensure outsourcing facilities stay compliant with FDA safety rules.

FDA: Proposed Rule and Guidances to Advance Biosimilars

On Dec. 11, the Food and Drug Administration (FDA) released a proposed rule and a group of guidance documents aimed at creating biologics competition by bringing more biosimilars to market. The rule and guidances address anticompetitive behavior that results from abuse of risk mitigation plans, and aims to allow biological products that are currently approved as drugs to smoothly transition to the biologics product category.

Read the rule here.

FDA: Data Integrity and Compliance with Drug CGMP

On Dec. 12, the Food and Drug Administration (FDA) issued final guidance to clarify the role data integrity plays in current good manufacturing practices (CGMP) for drugs. The guidance also promotes partnerships between the FDA and its international regulatory counterparts on best practices for data security to help manufacturers advance their own compliance policies.

FDA Ends Generic Drug Labeling Rule and Announces New Labeling Program

On Dec. 13, the Food and Drug Administration (FDA) ended a generic drug-labeling proposal that would have allowed generic drug manufacturers to update their drug labels with new information independent of labeling changes to the brand reference product. At the same time, the FDA announced a new program to update labels on certain generic cancer drugs.

Read the announcement here.


Ninth Circuit Says Administration Cannot Allow Companies to Deny Birth Control Coverage

On Dec. 13, a three-judge panel in the Ninth Circuit blocked rules by the Trump administration that allowed more employers to opt out of providing women with no-cost birth control. Those rules changed the birth control coverage requirements in regulations the Department of Health and Human Services (HHS) issued in October 2017 as part of implementing the Affordable Care Act. However, the administration has issued new rules on contraceptive coverage that may take effect in January, likely resulting in new legal challenges.

Federal Judge Rules Affordable Care Act Unconstitutional

On Dec. 14, a federal judge in Texas ruled to strike down the Affordable Care Act (ACA), declaring the ACA’s individual mandate as unconstitutional. Congress already eliminated the individual mandate’s tax penalty for failing to obtain insurance coverage, making the mandate unenforceable. If the ruling by the judge stands, it would remove coverage for pre-existing conditions and essential health benefits, such as mental health, substance abuse, prescription medications, as well as infant, pediatric and maternal care of about 17 million Americans.

California Attorney General Xavier Becerra leads the group of states that intend to appeal the decision. It would be the third major ACA case heard in front of the Supreme Court, which has twice upheld the law.


Congressional Budget Office (CBO) Gives Positive Score for Senate Bill to Reform OTC Drug Regulations

On Dec. 7, the Congressional Budget Office (CBO) reported that the Over-the-Counter Monograph Safety, Innovation, and Reform Act of 2018 would create a new user fee program for over-the-counter (OTC) monograph reform bill and would not increase the budget deficit. The Senate bill allows the Food and Drug Administration (FDA) to collect and spend fees paid for by industry through 2023 to cover the costs of expediting FDA’s regulatory activities relating to the OTC products. The bill also grants two years of exclusivity for certain qualifying OTC drugs.

Congressional Budget Office: Options for Reducing the Deficit, 2019 to 2028

On Dec. 13, the Congressional Budget Office (CBO) released its biannual budget options report. This report includes 121 options that would decrease federal spending or increase federal revenues. The health-related policies included limiting federal spending for Medicaid to generate a gross savings of as much as $805 billion between 2020 and 2028. One of the largest raises in revenue would be to repeal the forthcoming 40 percent tax on high-cost employer plans, the “Cadillac” tax, and instead limit the open-ended tax exclusion for employer-sponsored insurance (ESI).

GAO: Medicare – Payments for Certain Long-Term Care Hospitals That Specialize in Spinal Cord Treatment

On Dec. 13, the Government Accountability Office (GAO) released a report on spinal cord injuries that result in secondary complications that often lead to decreased functional independence and quality of life. The 21st Century Cures Act changed how Medicare pays certain long-term care hospitals (LTCH) that provide spinal cord specialty treatment. For these hospitals, the act included a temporary exception from how Medicare pays other LTCHs. Two LTCHs—Craig Hospital in Englewood, CO, and Shepherd Center in Atlanta, GA—have qualified for this exception.

The GAO found that most Medicare beneficiaries treated at these two hospitals typically receive specialized care for multiple chronic conditions and other long-term complications that develop after initial injuries, such as pressure ulcers that can result in life-threatening infection. The two hospitals also provide specialty care for acquired brain injuries, such as traumatic brain injuries.

Read the report here.

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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