Washington Healthcare Update

April 1, 2019

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Coming Week’s Highlights: Drug pricing hearing with pharmacy benefit manager companies, hearing on rising insulin costs, MedPAC April public meeting.

Upcoming Hearings

Upcoming Events









Upcoming Hearings

Tuesday, April 2, 2019

House Committee on Energy and Commerce: “Priced Out of a Lifesaving Drug: The Human Impact of Rising Insulin Costs”
The Subcommittee on Oversight and Investigations of the Committee on Energy and Commerce will hold a hearing to address the consequences of rising insulin costs. The subcommittee chair, Rep. Diana DeGette (D-CO), is also chair of the House Diabetes Caucus. Insulin has become an example of a drug for which prices have increased significantly. Find a link to witness testimonies, member statements and the hearing live feed here.

Tuesday, April 9, 2019

Senate Finance Committee: “TBA Drug Pricing Hearing with PBMs”
The Senate Finance Committee will continue its drug pricing series by inviting pharmacy benefit manager companies (PBMs) to testify before the committee. The invitation was extended on March 12 to Cigna, CVS Caremark and CVS Health, Humana, OptumRx and Prime Therapeutics; all have accepted to testify before the committee. The committee has not noticed the hearing officially—it has been rescheduled to April 9 due to NATO Secretary General Jens Stoltenberg’s joint address to Congress on the original date, April 3. 

Upcoming Events

April 4-5, 2019

MedPAC April Public Meeting
The Medicare Payment Advisory Commission (MedPAC) will hold this month’s public meeting during the first week of April. Find the MedPac April meeting agenda here.

April 11-12, 2019

MACPAC April Public Meeting
The Medicaid and CHIP Payment and Access Commission will hold this month’s public meeting during the second week of April.



House Committee on the Budget: “Department of Health and Human Services FY2020 Budget”

Tuesday, March 26, 2019: The House Committee on the Budget held a hearing examining the proposed FY2020 budget for the Department of Health and Human Services (HHS) with Deputy Secretary of HHS Eric Hargan. Find a link to witness testimonies, member statements and the hearing live feed here.

Why this is important: The House Budget Committee hosted the Department of Health and Human Services (HHS) Deputy Secretary Eric Hargan for a budget hearing. Hargan argued that HHS had the largest discretionary budget in the country behind defense in 2018, making prioritization necessary. Some of the priorities of the proposed budget include budget reforms for patient-centered health care, access to affordable prescription drugs and a value-based payment system for outpatient and ambulatory services. Democratic members of the committee noted that the budget calls for a $291 million investment in HIV/AIDS, but a $769 million cut to the National Institute of Allergy and Infectious Diseases, which is responsible for most of the research on this disease. The budget also calls for an additional $50 million for pediatric cancer but cuts the National Cancer Institute by $897 million.

Senate Committee on Health, Education, Labor and Pensions (HELP): “Implementing the 21st Century Cures Act: Making Electronic Health Information Available to Patients and Providers”

Tuesday, March 26, 2019: The Senate Committee on Health, Education, Labor and Pensions will hold a hearing on making electronic health information available to patients and providers, a provision of the 21st Century Cures Act. Find a link to witness testimonies, member statements and the hearing live feed here.

Why this is important: The chairman of the Senate Health Committee, Lamar Alexander (R-TN), backed new federal regulations to remove roadblocks patients can face in obtaining copies of their electronic medical records. He argued the proposed rule from the Department of Health and Human Services (HHS) removes barriers and makes it easier for patients to more quickly access, use and understand their personal medical information. The committee expressed some concern that the use of electronic health information could be moving too fast, and could cause a privacy and security issue. While witnesses supported the rules as a step in the right direction for industry, Dr. Christopher Rehm, chief medical informatics officer of LifePoint Health, argued a major remaining problem in electronic medical is the lack of interoperability across rival data systems.

House Committee on Energy and Commerce: “Health Subcommittee Bill Markup”

Wednesday, March 27, 2019: The Energy and Commerce Subcommittee on Health held a markup for 12 pieces of legislation related to pre-existing conditions, Affordable Care Act (ACA) protections, protecting against short-term or associated health plans and the rising cost of prescription drugs. All 12 bills were forwarded to the full committee, and no amendments introduced by Republicans during debates received approval. Find a link to the full markup here. Find a full summary of the markup and corresponding legislation here.

Senate Committee on the Budget: “Fiscal Year 2020 Budget Resolution – Day 1”

Wednesday, March 27, 2019: The Senate Committee on the Budget held a two-part markup to consider the FY2020 Budget Resolution. The first day consisted primarily of opening statements. Find a link to witness testimonies, member statements and the hearing live feed here.

Senate Committee on the Budget: “Fiscal Year 2020 Budget Resolution – Day 2”

Thursday, March 28, 2019: This was the second part of the Senate Committee on the Budget’s two-part markup to consider the FY2020 Budget Resolution. The second part of the hearing includes the consideration of amendments. Find a link to witness testimonies, member statements and the hearing live feed here.

Why this is important: The Senate Budget Committee approved the proposed budget resolution that would allow for spending cuts by reducing both defense and nondefense spending for 2020. The resolution advanced in an 11-8 vote. There is no guarantee that the resolution will be considered by the full Senate or that the House will consider a budget resolution. Find a summary of the resolution here.


Rep. Clyburn and Sen. Sanders Introduce Bill to Double Community Health Center Funding

On March 28, House Majority Whip James Clyburn (D-SC) and Sen. Bernie Sanders (I-VT) announced legislation in their respective chambers that would extend funding for community health centers and the National Health Service Corps for five years with a 10% annual increase and $4.6 billion in additional funding to allow health centers to expand their mental health and addiction services as well as update their facilities.

Pallone Requests OIG Probe into CMS’s Use of Communications Contractors

On March 29, House Energy and Commerce Committee Chairman Frank Pallone (D-NJ) requested an investigation into the Centers for Medicare and Medicaid Services’s (CMS) use of contractors, following a news report on CMS’s ties to communications consultants used by Administrator Seema Verma who are reportedly partisan. Pallone asked the Department of Health and Human Services’ (HHS) Office of the Inspector General (OIG) to immediately begin an investigation into how these contracts were approved and whether all regulations and ethical guidelines were followed when using taxpayer dollars.


Kaine, Bennet to Introduce Public Option

On Tuesday, Sens. Kaine (D-VA) and Bennet (D-CO) are expected to reintroduce their “Medicare X” plan, which would create a new public option for health insurance.

Under their bill, the plan would be an option on the individual and small business exchanges. Members of the plan would have access to the Medicare network of doctors in addition to the benefits of other plans under the Affordable Care Act like maternity and newborn care. It would also establish a reinsurance program to reduce premiums.

The latest version of the bill also would expand access to tax credits. The senators’ proposal would remove the current tax credit cap and allow people who make more than the current threshold of 400% of the federal poverty level to be eligible for the tax credit—whether they’re on a Medicare X plan or a private insurance plan.


CMS: New Part D Policies Address Opioid Epidemic

On March 28, the Centers for Medicare and Medicaid Services (CMS) introduced new Medicare Part D opioid safety policies to reduce prescription opioid misuse while preserving medically necessary access to these medications. The new opioid policies include improved safety alerts at the pharmacy for Part D beneficiaries who are filling their initial opioid prescription or who are receiving high doses of prescription opioids. Medicare drug plans will perform additional safety checks by sending pharmacies an alert to review certain opioid prescriptions before they are filled. Safety alerts may cover situations like:

  • Possible unsafe amounts of opioids. The pharmacist or Medicare drug plan may need to perform a closer safety review of the prescription with the prescribing doctor if a Part D beneficiary receives opioid prescription(s) that exceed a certain amount.
  • First prescription fills for opioids. Part D beneficiaries may be limited to a 7-day supply or less for acute pain if they haven’t recently taken opioids (such as within the past 60 days). The limit is based on medical best practices that show that the risk of developing an opioid use disorder increases after 7 days of use. This policy is not intended for current users of prescription opioids.
  • Use of opioids and benzodiazepines at the same time. These medications can be dangerous when taken in combination.

For more information on the new Part D opioid safety policies, see here.

CMS Announces One-Year Extension of Grandmothered Plans

On March 25, the Centers for Medicare and Medicaid Services (CMS) released the Health Insurance Exchanges 2019 Open Enrollment Report. As a supplement to the report, CMS issued a guidance extending for one additional year, the nonenforcement policy to allow issuers to continue certain health plans, referred to as “grandmothered” plans, which do not meet all the many mandates and restrictions in the Patient Protection and Affordable Care Act (PPACA).

The report shows plan selections in Exchange plans in the 50 states and D.C. remained steady at 11.4 million. This represents a decline of around 300,000 plan selections from the same time last year. In addition, as outlined in the report, average total premiums for plans selected through HealthCare.gov dropped by 1.5% from the prior year, the first decline since the Exchanges began operations in 2014.

Find the OEP Final Report here.

Find the guidance here.

FDA: Modifications to Compliance Policy for Certain Deemed Tobacco Products

On March 13, the Food and Drug Administration proposed an end to current compliance policy as it applies to flavored electronic nicotine delivery system (ENDS) products such as electronic cigarettes (other than tobacco-, mint- and menthol-flavored products), and prioritizing enforcement of such products offered for sale in ways that pose a greater risk for minors to access these tobacco products.

In addition, the FDA expects manufacturers of all flavored ENDS products (other than tobacco-, mint- and menthol-flavored) that remain on the market under these new conditions to submit premarket applications to the agency by Aug. 8, 2021. This application date is one year earlier than the agency previously proposed.

Public release is TBD.

CMS Seeks Recommendations That Allow Americans to Purchase Health Insurance Across State Lines

On March 6, the Centers for Medicare and Medicaid Services (CMS) issued a request for information (RFI) for recommendations on how to eliminate regulatory, operational and financial barriers to enhance issuers’ ability to sell health insurance coverage across state lines. This announcement builds on President Trump’s Oct. 2017 executive order “Promoting Healthcare Choice and Competition Across the United States,” which intends to provide Americans relief from rising premiums by increasing consumer choice and competition. 

In particular, CMS requests feedback on how states can take advantage of Section 1333 of the Patient Protection and Affordable Care Act, which provides for the establishment of a regulatory framework that allows two or more states to enter into a health care choice compact to facilitate the sale of health insurance coverage across state lines. CMS is primarily looking for input on how to expand access to health insurance coverage across state lines, effectively operationalize the sale of health insurance coverage across state lines and understand the financial impacts of selling health insurance coverage across state lines.

Comment period ends May 6, 2019.

Find the RFI and submit comments here.


FDA: Update on Nonproprietary Naming of Biological Products

On March 7, the Food and Drug Administration (FDA) issuing draft guidance that proposes to apply the naming convention only to new originator biologics and interchangeable biosimilars and to exempt currently licensed or approved biologics or products that are in the process of being licensed, including insulin. The draft guidance is a reversal of the FDA’s 2017 decision to require that all biologics follow a nonproprietary naming protocol.

The FDA cited brand-biologic industry concerns that changing the names of older biologics would impose costs on the health care system that could then be passed onto patients, and could create confusion among patients and health care providers.

Comment period ends on May 7, 2019; comments can be submitted here.

Find the draft guidance here.

FDA: Quality Considerations for Continuous Manufacturing

On Feb. 26, the Food and Drug Administration (FDA) released a draft guidance on what factors brand and generic drug manufacturers should consider when setting up and using a continuous manufacturing system to produce their products. The guidance outlines the benefits of continuous manufacturing over traditional batch manufacturing, including the efficiency that comes with continuous manufacturing that could eventually lead to lower drug prices for consumers.

Comment period ends on May 28, 2019; comments can be submitted here.

Find the draft guidance here.

FDA: Competitive Generic Therapies Draft Guidance

On Feb. 19, the Food and Drug Administration (FDA) published a draft guidance on how drug manufacturers can apply for the competitive generic therapy (CGT) pathway, intended for generic versions of drugs that have little-to-no competition in the market. This guidance encourages more generic drug manufacturing and explains how exclusivity would work under the CGT pathway, including exclusivity given to multiple CGT pathway-approved drugs that fit certain criteria.

Comment period ends on April 22, 2019; comments can be submitted here.

Find the draft guidance here.

ONC/CMS: Interoperability; Exceptions to Information Blocking

On Feb. 11, the Centers for Medicare and Medicaid Services (CMS) and the Office of the National Coordinator (ONC) released proposed rules to support secure access, exchange and use of electronic health information. The Interoperability and Patient Access Proposed Rule from CMS outlines opportunities to make patient data more useful and transferable through open, secure, standardized and machine-readable formats while reducing restrictions on health care providers. The ONC rule calls on the health care industry to adopt standardized application programming interfaces (APIs), which will allow individuals to securely and easily access structured electronic health information (EHI) using smartphone applications.

In addition to the policy proposals, CMS released two requests for information (RFIs) to obtain feedback on interoperability and health information technology (health IT) adoption in post-acute care (PAC) settings, and the role of patient matching in interoperability and improved patient care.

Comment period ends on May 3, 2019.

Read the proposed rule and submit comments here.

HHS Proposal Calls for Reforming Drug-Rebate System

Published on Feb. 6, a proposal by the Department of Health and Human Services (HHS) called for a ban on drug rebates, unless shared directly with seniors at the pharmacy counter, significantly lowering out-of-pocket retail drug spending for the minority of seniors on expensive drugs. The proposal would raise premiums for all Medicare beneficiaries. Part of the administration’s plan is set to take effect in a year and an anticipated legal challenge by pharmacy benefit managers (PBMs) could delay implementation.

The proposal cuts rebates tied to a percentage of list price that drug manufacturers pay to Part D plans, Medicaid managed care and PBMs by taking away the long-standing exemption for rebates in anti-kickback law. The administration proposed two new safe harbor protections: one that would allow rebates that are shared with patients at the point of sale and another that would let PBMs charge flat fees for their services.

Comment period ends on April 8, 2019.

Read the proposed rule here.


DOJ Reverses Original Stance, Says Entire ACA Now Invalid

On March 25, the Department of Justice (DOJ) told the 5th Circuit Court of Appeals that it now agrees with Texas Federal Judge Reed O’Connor’s Dec. 14 decision that the ACA’s individual mandate is no longer valid and therefore the entire Affordable Care Act (ACA) is unlawful. The DOJ had previously said while it agreed that the mandate is not valid, it would defend all parts of the law except the community rating and guarantee issues provisions that protect those with pre-existing conditions.

Judge Delivers Blow to Administration on Association Health Plans

A federal judge ruled that the Trump administration’s attempt to expand the availability of “association health plans,” which may lack some health benefits and consumer protections required under the Affordable Care Act, is illegal and deliberately attempts to “end-run” around the ACA. According to the ruling, the Department of Labor stretched the definition of “employer” too far and ignored what is lawful under the ACA and the Employee Retirement Income Security Act.

Judge Negates Work Requirements for Medicaid in Arkansas and Kentucky Cases

On March 27, Judge Boasberg, who was named to the U.S. District Court for the District of Columbia in 2011, ruled the federal government failed to justify that adding employment conditions and other changes to Medicaid in Arkansas and Kentucky advanced Medicaid’s basic purpose of providing health coverage and remanded both projects back to HHS. The Justice Department has not yet said whether it will appeal. Arkansas Gov. Asa Hutchinson said the judge’s decision to invalidate his state’s Medicaid work requirement “is wrong” and that the state remains “fully committed” to requiring some enrollees to work in order to keep their health benefits.


GAO: DOD’s Proposed Plan for Oversight of Graduate Medical Education Programs

On March 28, the Government Accountability Office (GAO) released a report on the Department of Defense’s (DOD) graduate medical education programs. The GAO found the DOD developed a plan to oversee graduate medical education programs, which includes the measures Congress required. DOD has not yet begun implementing the plan.

In commenting on a draft of this report, the DOD did not fully agree with GAO’s finding that the DOD had not developed plans to implement its new GME oversight process, citing as a basis certain preliminary steps it had taken. Based on the preliminary nature of these steps and other reasons explained in the report, GAO stands by its finding.

Find the full report here.

GAO: Medicare and Medicaid – CMS Should Assess Documentation Necessary to Identify Improper Payments

On March 27, the Government Accountability Office (GAO) released a report on how accurately the Centers for Medicare & Medicaid Services (CMS) uses estimates of improper payments to help identify the causes and extent of Medicare and Medicaid program risks and develop strategies to protect the integrity of the programs. The GAO found that Medicare and Medicaid have different documentation requirements for some of the same services, contributing to substantially different estimated error rates.

The GAO made four recommendations to CMS:

  1. The Administrator of CMS should institute a process to routinely assess, and take steps to ensure, as appropriate, that Medicare and Medicaid documentation requirements are necessary and effective at demonstrating compliance with coverage policies while appropriately addressing program risks.
  2. The Administrator of CMS should take steps to ensure that Medicaid medical reviews provide robust information about and result in corrective actions that effectively address the underlying causes of improper payments. Such steps could include adjusting the sampling approach to reflect state-specific program risks, and working with state Medicaid agencies to leverage other sources of information, such as state auditor and the Department of Health and Human Services’s Office of the Inspector General findings.
  3. The Administrator of CMS should take steps to minimize the potential for Payment Error Rate Measurement (PERM) medical reviews to compromise fraud investigations, such as by directing states to determine whether providers selected for PERM medical reviews are also under fraud investigation and to assess whether such reviews could compromise investigations.
  4. The Administrator of CMS should address disincentives for state Medicaid agencies to notify the PERM contractor of providers under fraud investigation. This could include educating state officials about the benefits of reporting providers under fraud investigation, and taking actions such as revising how claims from providers under fraud investigation are accounted for in state-specific FFS improper payment rates, or the need for corrective actions in such cases.

CMS concurred with three recommendations, but did not concur with the recommendation on Medicaid medical reviews. GAO maintains that this recommendation is valid as discussed in this report.

Find the full report here.

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

Stephanie Kennan, Senior Vice President
Mariam Eatedali, Research Associate

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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