Washington Healthcare Update

January 7, 2019

Pardon Our Dust

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This Week: Happy New Year! The 116th Congress begins and healthcare issues are part of the “buzz” of day one. Part of the government is still closed. 

Government Shutdown Update: The shutdown does not impact CMS. However, the FDA is one of the agencies affected. The House of Representatives voted on Jan. 3 to fund the remaining portions of the government impacted by the shutdown, but that legislation is not expected to be considered by the Senate, despite being the same legislation the Senate passed in the waning days of the last Congress that the president rejected at the last minute. As of Jan. 7, the partial government shutdown will be at 17 days.









New Leadership

House Ways and Means Committee

  • Chairman: Rep. Richard Neal (D-MA)
  • Ranking Member: Rep. Kevin Brady (R-TX)

House Energy & Commerce

  • Chairman: Rep. Frank Pallone (D-NJ)
  • Ranking Member: Rep. Greg Walden (R-OR)

House Budget

  • Chairman: Rep. John Yarmuth (D-KY)
  • Ranking Member: Rep. Steve Womack (R-AR)

House Speaker Pelosi Supports Medicare-For-All Hearings

According to press reports, Speaker Pelosi is supportive of a hearing on Medicare-for-All proposals. The Medicare-for-All hearing is expected to be in the House Rules and Budget Committees and will be scheduled sometime in the next few weeks.

House Energy and Commerce Chair Pallone Announces Hearing to be Held on ACA and Texas Ruling

On Jan. 3, Chairman Frank Pallone (D-NJ) of the House Energy and Commerce Committee announced a hearing examining the impacts of the U.S. district judge’s decision in Texas to strike down the Affordable Care Act. While no exact date has been set, the hearing will be held sometime later this month.


New Leadership

The Senate also returned on Jan. 3, with swearing in of new members on Jan. 4. Committee memberships will be finalized Jan. 9.

Senate Finance

  • Chairman: Sen. Chuck Grassley (R-IA)
  • Ranking Member: Sen. Ron Wyden (D-OR)

Senate Health, Education, Labor & Pensions (Republican Committee Assignments)

  • Sen. Lamar Alexander (TN)
  • Sen. Mike Enzi (WY)
  • Sen. Richard Burr (NC)
  • Sen. Johnny Isakson (GA)
  • Sen. Rand Paul (KY)
  • Sen. Susan Collins (ME)
  • Sen. Bill Cassidy (LA)
  • Sen. Pat Roberts (KS)
  • Sen. Lisa Murkowski (AK)
  • Sen. Tim Scott (SC)
  • Sen. Mitt Romney (UT)
  • Sen. Mike Braun (IN)

Senate Finance (Republican Committee Assignments)

  • Sen. Chuck Grassley (IA)
  • Sen. Mike Crapo (ID)
  • Sen. Pat Roberts (KS)
  • Sen. Mike Enzi (WY)
  • Sen. John Cornyn (TX)
  • Sen. John Thune (SD)
  • Sen. Richard Burr (NC)
  • Sen. Johnny Isakson (GA)
  • Sen. Rob Portman (OH)
  • Sen. Pat Toomey (PA)
  • Sen. Tim Scott (SC)
  • Sen. Bill Cassidy (LA)
  • Sen. James Lankford (OK)
  • Sen. Steve Daines (MT)
  • Sen. Todd Young (IN)

Senate Democrats Joining Health-Related Committees

  • Sen. Jacky Rosen (NV) – Senate Health, Education, Labor & Pensions (HELP)
  • Sen. Maggie Hassan (NH) – Senate Finance
  • Sen. Catherine Cortez Masto (NV) – Senate Finance

*Note: Senate assignments are subject to ratification by the full Senate on Jan. 9.


FDA: Comment Period Extended for Informed Consent Proposed Rule

On Dec. 19, the Food and Drug Administration (FDA) responded to the request of the medical device industry, extending the comment period for its proposed rule that waives or alters informed consent regulations for minimal risk clinical investigations. The comment period is extended for 30 days, not the industry’s requested 60 days, with all comments due by Jan. 14.

Read the proposed rule here.

FDA: Guidance Outlining Advantages, Disadvantages of Oncology Endpoints

On Dec. 19, the Food and Drug Administration (FDA) revised old guidance on oncology endpoints based on specific context of use. The FDA addressed endpoints that could be used to measure disease activity or clinical benefit in later phase efficacy studies for cancer clinical trials. The guidance is part of the FDA’s efforts to reform and modernize the clinical trial process and innovative treatments, including those for cancer, following the guidelines set by the 21st Century Cures Act.

The FDA’s guidance includes the following endpoints: overall survival, symptom endpoints (patient-reported outcomes), disease-free survival or event-free survival, objective response rate, complete response and progression-free survival or time to progression.

Read the guidance here.

CMS: Finalized “Pathways to Success,” an Overhaul of Medicare’s National ACO Program

On Dec. 21, the Centers for Medicare & Medicaid Services (CMS) issued a final rule that redesigned the Medicare Accountable Care Organizations or ACOs, overhauling the Medicare Shared Savings Program (MSSP), the largest Medicare ACO program. The finalized “Pathways to Success” replaced the MSSP, decreasing the amount of time an ACO can stay in an upside-only track from six years to two years for new ACO participants and three years for new, low-revenue ACOs, including physician-led organizations and some rural organizations.

The new ACO program expands the skilled nursing facility three-day rule waiver eligibility and allows ACOs to choose prospective beneficiary assignment on a yearly basis. The program also lets ACOs offer incentive payments to beneficiaries for their efforts to improve their own health outcomes. The changes go into effect on July 1, 2019.

Read the final rule here.

CMS Raises Laboratory Fees by 20 Percent

On Dec. 28, the Centers for Medicare & Medicaid Service (CMS) announced it raised laboratory user fees by 20 percent, the first increase for laboratory oversight in 20 years. The notice will go into effect immediately for all labs certified under the Clinical Laboratory Improvement Amendments of 1988 (CLIA), or every lab that performs tests on human specimens, including hospitals’ in-house facilities and independent diagnostic labs.

CMS updated the program’s fee schedule in response to current fees’ no longer being sufficient to cover costs of the CLIA program. The increased fees for lab certification and compliance inspections for non-accredited labs close a $9.3 million gap between current costs and CLIA fee coverage.

Read the notice here.

CMS Automates Medicaid Drug Classification System

On Dec. 28, the Centers for Medicare & Medicaid Services (CMS) announced that the system that determines whether drugs are properly classified in the Medicaid Drug Rebate Program will become automated. The system will review manufacturer-reported data by matching it to Food and Drug Administration (FDA) data to verify manufacturer submissions, receive state drug utilization data via online submission, process the rebate agreement electronically and automate some of the current process for better data validations.


Federal Court Blocks Trump Administration’s Cuts to 340B Drug Discount Program

On Dec. 27, a federal judge blocked the Trump administration’s rule that reduces payments to hospitals under the 340B drug discount program, ruling that the government overstepped its authority in its effort to address high prescription medication costs. The judge further ruled that the near 28 percent, or about $1.6 billion, reduction in payments went against Congress’s intent when the program was initially approved.

Read District Judge Rudolph Contreras’s opinion on American Hospital Association, et al. v. Alex Azar II, here.

ACA Hearings Will be a Focus in January 2019

On Dec. 19, in a case the state of Maryland has brought to have the ACA declared constitutional, the Maryland attorney general made two requests. The first was to have an order blocking Acting U.S. Attorney General Whitaker from the post on grounds that his appointment violates the Constitution’s appointment clause. The argument is related to the ACA because if the appointment of Acting Attorney General Whitaker is not correct, then he should not be making decisions related to the cases in the courts related to the ACA. The second request was to declare the ACA constitutional.On Jan. 3, seventeen Democratic state attorneys general filed an appeal in the Texas case, in which U.S. District Judge Reed O’Connor ruled at the end of 2018 that the ACA was unconstitutional. The judge granted a stay of his ruling so the ACA remains in place and permitted the 17 Democratic state attorneys general to go ahead with an appeal. O’Connor has yet to rule on other issues in the case before him, which could have held up any appeal process. The appeal moves the case forward for consideration by the 5th U.S. Circuit Court of Appeals. Other hearings are expected in cases related to unpaid reimbursements for the cost-sharing reductions as well as a hearing on a multistate challenge to the Trump administration’s rule on association health plans.The federal government will appeal to the 10th Circuit Court of Appeals a challenge to its risk adjustment methodology and it received a temporary stay in litigation over the final rule on short-term plans.


GAO Report: Medicare Fee-For-Service; Second Year of Nationwide Reduced Payment Rates for Durable Medical Equipment

On Dec. 21, the Government Accountability Office (GAO) released a report for the second year on Medicare’s competitive bidding program for certain durable medical equipment. The GAO found that the number of suppliers who furnished rate-adjusted items in non-bid areas decreased in 2017, the same conclusion from 2016, continuing a long-term trend that began before the Centers for Medicare & Medicaid Services (CMS) adjusted rates in non-bid areas.

The GAO also found that beneficiary utilization showed little change and that there is little difference between non-rural and rural non-bid areas in terms of supplier and beneficiary utilization changes. The report incorporates technical comments from the Department of Health and Human Services (HHS).

Read the full 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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