Washington Healthcare Update

April 22, 2019

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This week in Washington: Congress is in recess.










House Judiciary Committee: “TBA Markup on CREATES Act, Pay-for-Delay Legislation”

The House Judiciary Committee is planning a markup on the CREATES Act and pay-for-delay legislation. The date of the markup is to be announced.Last month, Judiciary Committee Chair Jerrold Nadler (D-NY) said he intended to introduce a bill to prohibit deals in which a brand drug maker pays a generic competitor to abandon a patent challenge, delaying their entry into the market. Rep. Nadler has not yet introduced the bill. The House Energy & Commerce Committee passed a version of the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act with bipartisan amendments earlier this month.


Schakowsky, Rooney Reintroduce Drug Price Justification Bill

On April 18, Reps. Jan Schakowsky (D-IL) and Francis Rooney (R-FL) reintroduced a bill that would require manufacturers to provide the Department of Health and Human Services (HHS) with advance notice and justification of price hikes on prescription drugs. The Fair Accountability and Innovative Research (FAIR) Drug Pricing Act of 2019 forces drug manufacturers to submit a pricing information and justification report to HHS at least 30 days in advance of drug price increases larger than 10 percent of the drug’s price over one year, or 25 percent over three years.

Pallone, Shalala Introduce Bill to Ban Online E-Cig Sales, Raise Minimum Purchase Age

On April 16, House Energy & Commerce Committee Chair Frank Pallone (D-NJ) and Rep. Donna Shalala (D-FL) introduced a bill allowing the Food and Drug Administration (FDA) to collect user fees for e-cigarettes, raise the minimum age to purchase tobacco to 21 and prohibit online sales of tobacco products. The bill also bans all characterizing tobacco product flavors, requiring the FDA to finalize rulemaking to implement graphic health warnings for cigarette packages, and holds all deemed tobacco products to the same advertising and sales requirements applied to combustible cigarettes.

Monitor the bill here.

Bipartisan Bill Introduced to Exempt APMs from Stark Law Provisions

On April 10, Reps. Raul Ruiz (D-CA), Larry Bucshon (R-IN), Ron Kind (D-WI) and Kenny Marchant (R-TX) reintroduced the Medicare Care Coordination Improvement Act of 2019 in the House. The bill provides to alternative pay models the same physician self-referral waivers that accountable care organizations were granted by the Affordable Care Act (ACA). The bill also gives providers working to develop a new demo for a better alternative payment model (APM) a three-year waiver. Moreover, the bill lets APMs and those testing potential APMs get around the Stark law’s volume or value prohibition.


CMS Adds 12 DME Items to Required Prior Authorization List

On April 18, the Centers for Medicare and Medicaid Services (CMS) added more power wheelchairs and pressure reducing support surfaces to the list of durable medical equipment (DME) that must undergo prior authorization. CMS also added four new items to the master list of DME that are frequently subject to unnecessary use.

Find the Prior Authorization update here.

CMS Issues Final Rule for the 2020 Annual Notice of Benefit and Payment Parameters

On April 18, the Centers for Medicare and Medicaid Services (CMS) released the final annual Notice of Benefit and Payment Parameters for the 2020 benefit year, known as the 2020 Payment Notice. The rule reduces user fees for plans offered on HealthCare.gov, and encourages the use of lower-cost generic drugs, while improving market stability and consumer choice.

Within the final rule is a provision to limit the use of drug industry coupons to control medicine costs and expand the use of generics in Affordable Care Act (ACA) plans. The rule allows insurers in 2020 to exclude manufacturer coupons from counting toward patients’ annual limitation on cost sharing if a medically appropriate generic drug is available. It applies to individual market, small group, large group and self-insured group health plans, to the extent permitted by applicable state laws.

Read the final rule here.

The final rule will be published on April 25, 2019 here.

CMS Proposes Fiscal 2020 Pay Rates for Inpatient Psychiatric Facilities

On April 17, 2019, the Centers for Medicare and Medicaid Services (CMS) proposed a rule that would update Medicare payment policies for facilities under the Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS) and the Inpatient Rehabilitation Quality Reporting Program (IRF QRP). The proposal increases Medicare payments to inpatient psychiatric facilities by 1.7 percent in fiscal year 2020 while adding a new quality measure intended to assess whether patients with certain diagnoses are filling their prescriptions after being discharged from such facilities. Once finalized, the rule will take effect Oct. 1, 2019.

Read the proposed rule here.

The rule will be published on April 24, 2019 here; comment period ends on June 17, 2019

CMS Proposes Boosting Payments to Inpatient Rehabilitation Facilities

On April 17, 2019, the Centers for Medicare and Medicaid Services (CMS) proposed a rule to update Medicare payment policies for facilities under the Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS) and the Inpatient Rehabilitation Quality Reporting Program (IRF QRP) for fiscal year (FY) 2020.

CMS is proposing to raise the estimated payments per discharge for inpatient rehabilitation facilities in federal fiscal 2020 by 2.3 percent, or $195 million, compared to 2019. The proposal could boost payments in urban areas by 2.2 percent and rural areas by 4.3 percent compared to the year before.

The proposed rule will be published in the Federal Register April 24, 2019.

Comment period ends on June 27, 2019.

Read the proposed rule here.

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) issued 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 on to 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 today, 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 June 3, 2019.

Read the proposed rule and submit comments here.


GAO: CMS Needs to Address Gaps in Federal Oversight of Nursing Home Abuse Investigations That Persisted in Oregon for at Least 15 Years

On April 15, the Government Accountability Office released a report on abuse allegations in nursing homes, as investigated by state agencies, known as survey agencies, contracted to the Centers for Medicare & Medicaid Services (CMS). The GAO found that an Oregon agency, Oregon’s Adult Protective Services (APS), a state program that is part of Oregon’s Department of Human Services but is separate from the survey agency, was investigating complaints and facility-reported incidents of abuse in nursing homes for over 15 years. As a result, CMS did not get information from those investigations and the results were not included on its site.

The GAO made the following three recommendations to CMS:

  1. CMS should evaluate state survey agency processes in all states to ensure all state survey agencies are meeting federal requirements that state survey agencies are responsible for investigating complaints and facility-reported incidents alleging abuse in nursing homes, and that the results of those investigations are being shared with CMS.
  2. CMS should identify options for capturing information from Oregon’s APS investigations of complaints and facility-reported incidents of abuse and incorporate this information into oversight of Oregon nursing homes.
  3. CMS should clearly communicate to consumers the lack of data on abuse complaints and facility-reported incidents in Oregon nursing homes contained in the CMS Nursing Home Compare website.

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

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