Washington Healthcare Update

April 29, 2019

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This week in Washington: Congress is back from a two week recess. 

Upcoming Hearings/Markups




Proposed Regulations



Upcoming Hearings/Markups

Tuesday, April 30, 2019

House Committee on Rules: “Hearing on the Medicare for All Act of 2019,” H.R. 1384
The House Committee on Rules will hold a hearing on the Medicare for All Act of 2019. This hearing will be the first time Congress has ever held a hearing on Medicare for All. The Rules Committee typically holds hearings when a bill has been considered by other committees, gone through a markup process and sent to Rules to determine how the bill will be considered on the House floor. However, Speaker Pelosi promised Medicare for All supporters that the Rules Committee and the Budget Committee would hold hearings. The House Budget Committee is likely to hold a hearing next month. Read the witness list and other information.

House Committee on Energy and Commerce: “The Payment of Prescription Drugs in Medicare Parts B & D”
The House Committee on Energy and Commerce will hold a hearing on the cost of drugs in Medicare Part B and Part D. The hearing covers Medicare’s prescription drug programs as the Health Subcommittee looks at proposals to strategically improve coverage and lower costs for seniors. Find the full hearing and witness testimonies here.


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 has not been 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.



Grassley to Hold Nursing Home Hearing After GAO, OIG Reports Released in Summer

On April 22, Senate Finance Committee Chair Chuck Grassley (R-IA) announced plans to hold oversight hearings concerning nursing home care after the Government Accountability Office (GAO) and the Department of Health and Human Services’s (HHS) Office of Inspector General (OIG) reports on the topic are released this summer. Grassley has a long history in oversight of the nursing home care, as does the ranking member of the committee, Sen. Ron Wyden (D-OR).


Administration Preparing Rollback of Protections for Transgender Patients

The Trump administration is preparing to release within the next few weeks regulations to roll back protections for transgender patients and empower health care workers to refuse care based on religious objections.

One rule would replace an Obama administration policy extending nondiscrimination protections to transgender patients, which have been blocked in court. A second rule would finalize broad protections for health workers who cite religious or moral objections to providing services such as abortion or contraception, a priority for Christian conservative groups allied with the administration.

The Obama administration issued transgender patient protections as part of a rule enforcing the Affordable Care Act’s Section 1557 banning discrimination in health care based on sex. Several legal cases have considered this issue, but patient protections were halted in 2016 by a Texas federal judge who found Congress did not intend to protect gender identity. This month, the Justice Department told the judge it agreed with the ruling.

CMS Extends Existing Duals Demos, Invites Other States to Join

On April 24, the Centers for Medicare and Medicaid Services (CMS) invited states that are not currently participating in the duals demonstration to contact CMS about starting their own version, whether through the capitated financial alignment model, the managed fee-for-service model or some other state-specific model. CMS also said it plans to allow states that are already in the demonstration to make some changes, if necessary, or to extend the ongoing demo for multiple years.

Find the announcement here.

HHS and CMS to Launch New Value-Based Pay Demos for Primary Care

On April 22, the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) announced new models for primary care, Primary Care First and Direct Contracting, with the goal to reduce administrative burdens and allow primary care providers to spend more time caring for patients while reducing overall health care costs. The models were developed by the Innovation Center and are part of HHS Secretary Alex Azar’s value-based transformation initiative.

Two of the new model options are targeted at smaller practices as part of Primary Care First, and the three Direct Contracting options are meant for larger organizations, while all of the options are voluntary.

Read the press release here.

Department of Commerce: March-In Rights Should Not Be Used for Drug Pricing

On April 24, the Department of Commerce (DOC) released a report that concluded that march-in rights should not be used to control market prices, and that is consistent with a draft report released by the DOC at the end of last year. The report also added that clarification of the appropriate uses of march-in rights would not require legislative changes.

March-in rights allow the funding agency to request a third party to effectively ignore the exclusivity of a patent awarded and grant additional licenses to other “reasonable applicants.” March-in rights were created by the Bayh-Dole Act and was one of the most controversial provisions of the law.     

According to the report, the government’s position is that patent law references reasonable licensing terms, while those asking to invoke march-in rights frame the phrase as a duty to provide drugs at a reasonable cost to consumers.

Find the full report here.

CMS Releases Final Notice of Benefit and Payment Parameters for 2020 and Cuts Navigator Training for Assisting People with Chronic Illness

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.

Under the finalized rule, the Centers for Medicare and Medicaid Services (CMS) announced there is no longer a requirement for navigators to train assisters to help people with chronic illness and limited English proficiency and other populations requiring help beyond selecting health insurance, and will limit how much help navigators must give individuals after they have signed up for coverage. CMS said the changes would allow the exchanges to spend less money operating the navigator program.

Read the final rule here.

Proposed Regulations

CMS: Fiscal Year (FY) 2020 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Acute Care Hospital (LTCH) Prospective Payment System

On April 23, 2019, the Centers for Medicare and Medicaid Services (CMS) proposed to update Medicare payment policies for hospitals under the Inpatient Prospective Payment System (IPPS) and the Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) for fiscal year 2020. The proposals include a raise in pay for low-wage hospitals by cutting pay for high-wage hospitals, as part of the reforms to the hospital wage index, as well as raising the add-on pay for new technology and providing a path for breakthrough devices approved by the Food and Drug Administration (FDA) to access add-on payments. CMS also proposed policy changes to increase significantly Medicare pay to hospitals for administering expensive chimeric antigen receptor T-cell (CAR-T) cancer drugs and make it easier for hospitals to get the maximum possible reimbursement for administering the CAR-T cell therapies.

The bundled proposals will be published on May 3, 2019 here.

Find the unpublished proposed rule here.

CMS Proposes Fiscal 2020 Pay Rates for Inpatient Psychiatric Facilities

On April 17, 2019, the Centers for Medicare and Medicaid Services (CMS) proposed to modify the market basket used to calculate inpatient psychiatric facility payments. The rule would use 2016 instead of 2012 as a base year and add a new claims-based measure to the Inpatient Psychiatric Facility Quality Reporting Program starting in FY 2020.

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.

Comment period ends on June 17, 2019.

Find the proposed rule here.

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.

Comment period ends on June 27, 2019.

Find the proposed rule 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.

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.


GAO: Actions Needed to Strengthen Oversight and Coordination of Health Care for American Indian and Alaska Native Veterans

On April 22, the Government Accountability Office (GAO) released a report examining Veterans Affairs (VA) and Indian Health Service (IHS) oversight of the implementation of a memorandum of understanding (MOU) to improve:

  • the health status of American Indian and Alaska Native (AI/AN) veterans since 2014;  
  • the use of reimbursement agreements to pay for AI/AN veterans’ care since 2014; and
  • key issues identified by selected VA, IHS and tribal health program facilities related to coordinating AI/AN veterans’ care.

The GAO found that the VA’s reimbursements increased by 74 percent between FYs 2014-2018 and that the VA and IHS could more effectively collaborate and measure program performance with the following three recommendations:

  • As the VA and IHS revise the MOU and related performance measures, the Secretary of Veterans Affairs should ensure these measures are consistent with the key attributes of successful performance measures, including having measurable targets.
  • The Secretary of Veterans Affairs should, in consultation with IHS and tribes, establish and distribute a written policy or guidance on how referrals from IHS and THP facilities to VA facilities for specialty care can be managed.
  • As VA and IHS revise the MOU and related performance measures, the director of IHS should ensure these measures are consistent with the key attributes of successful performance measures, including having measurable targets.

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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