Washington Healthcare Update

May 6, 2019

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This week in Washington: Hearings continue on the price of prescription drugs, Senate Committee on Finance to hold a hearing on Medicare physician payment reform, while the Senate HELP Committee will hold its second hearing in a series on electronic health information and further implementing the 21st Century Cures Act. 

Upcoming Hearings/Markups






Final Regulations

Proposed Regulations



Upcoming Hearings/Markups

Tuesday, May 7, 2019

Senate Judiciary Committee: “Intellectual Property and the Price of Prescription Drugs: Balancing Innovation and Competition”
The Senate Judiciary Committee will hold a hearing on practices by drug manufacturers to delay the patent system and extend monopolies on prescription drugs. Find witness testimonies, live feed and other information here.

Senate Health, Education, Labor and Pensions (HELP) Committee: “Implementing the 21st Century Cures Act: Making Electronic Health Information Available to Patients and Providers, Part II”
The Senate HELP committee will hold the second hearing in a series on electronic health information and further implementing the 21st Century Cures Act. Witnesses include Dr. Don Rucker, the National Coordinator for Health Information Technology at the Department of Health and Human Services (HHS), and Dr. Kate Goodrich, the Director and Center for Medicare and Medicaid Services (CMS) Chief Medical Officer. Find witness testimonies, live feed and other information here.

Wednesday, May 8, 2019

Senate Committee on Finance: “Medicare Physician Payment Reform After Two Years: Examining MACRA Implementation and the Road Ahead”
The Senate Finance Committee will hold a hearing to evaluate how well the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 is meeting its goals in reforming physician payments and to discuss ways to improve the law’s implementation. Find witness testimonies, live feed and other information here.

Thursday, May 9, 2019

House Committee on Energy and Commerce: “Lowering Prescription Drug Prices: Deconstructing the Drug Supply Chain”
The House Committee on Energy and Commerce will hold a hearing on the drug supply chain, including drug manufacturers, pharmacy benefit managers (PBMs), insurers, hospitals, pharmacies and patients—all represented by the witnesses testifying. The purpose of the hearing is to get to the root causes of high prescription drug costs, how prices are set and how each supply chain member can help lower prices. Find witness testimonies, live feed and other information here.


House Ways & Means Committee: Hearing on Single-Payer Issue
The House Ways & Means Committee will hold a hearing on the single-payer issue, marking the first time in decades that one of the two main health care committees of jurisdiction will hold a hearing on the topic. The other health care panel, the House Energy and Commerce Committee, has so far declined to commit to holding a hearing on the issue. The House Rules Committee held a hearing on Medicare for All last week. The date of the hearing has yet to be announced.



House Committee on Rules: “Hearing on the Medicare for All Act of 2019,” H.R. 1384

Tuesday, April 30, 2019: The House Committee on Rules held 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 been 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.

Find the full hearing and witness testimonies here.

House Committee on Energy and Commerce: “The Payment of Prescription Drugs in Medicare Parts B & D”

Tuesday, April 30, 2019: The House Committee on Energy and Commerce held 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.

Find a summary of the hearing here.

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

Tuesday, April 30, 2019: The House Judiciary Committee held a markup and voted to send four drug-pricing and competition bills to the House floor, including pay-for-delay legislation, the CREATES Act and a bill that would allow the Federal Trade Commission (FTC) to crack down on brand drug manufacturers’ use of sham citizen petitions to delay generic drug competition. The committee also voted in favor of Chair Jerry Nadler’s (D-NY) Preserve Access to Affordable Generics and Biosimilars Act, which allows the FTC to penalize companies that reach patent dispute settlements that delay generic or biosimilar competition.

All bills were favorably reported to the House with no added amendments, and by unanimous voice vote:

  • H.R. 965, the “CREATES Act”
  • H.R. 2375, the “Preserve Access to Affordable Generics and Biosimilars Act”
  • H.R. 2374, the “Stop Significant and Time-wasting Abuse Limiting Legitimate Innovation of New Generics Act”
  • H.R. 2376, the “Prescription Pricing for People Act of 2019”

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.

Find the full markup here. 


Senate Democrats Introduce the “Choose Medicare Act”

On May 1, Sens. Chris Murphy (CT) and Jeff Merkley (OR), alongside Democratic colleagues, introduced the “Choose Medicare Act,” which allows anyone not on Medicare or Medicaid to enroll in Medicare, and gives employers the option to offer Medicare to employees instead of, or in addition to, private insurance.

The list of 15 cosponsors includes: Sens. Dianne Feinstein (D-CA), Kamala Harris (D-CA), Richard Blumenthal (D-CT), Brian Schatz (D-HI), Tammy Baldwin (D-WI), Dick Durbin (D-IL), Jack Reed (D-RI), Tina Smith (D-MN), Jeanne Shaheen (D-NH), Tammy Duckworth (D-IL), Cory Booker (D-NJ), Kirsten Gillibrand (D-NY) and Martin Heinrich (D-NM).

Monitor the bill here.


House to Vote on Two Drug Pricing Bills This Week

On May 3, House Speaker Nancy Pelosi (D-CA) confirmed that the House will vote on two prescription drug-pricing bills this week with the intent to make it easier for generic and biosimilar drug manufacturers to access information on drug patents and marketing exclusivity.

  • H.R. 1503 – The Orange Book Transparency Act of 2019 makes changes to the Food and Drug Administration’s (FDA) “orange” book to provide better information on brand drug and patent exclusivity. Monitor the bill here.
  • H.R. 1520 – The Purple Book Continuity Act of 2019 update the FDA’s “purple” book on patents and exclusivity for biologic medicines. Monitor the bill here.

CBO Releases Report on Single-Payer Health Care System Designs

At the request of the House Budget Committee Chairman, John Yarmouth (D-KY), the Congressional Budget Office (CBO) created a report on design considerations and consequential factors of the single-payer health care debate. This report was released on May 1. The report provides Congress with a neutral framework for approaching single-payer proposals. While CBO’s assessment explicitly refrains from specifics, it did outline factors to consider, and possible issues faced, when designing, implementing or transitioning to single-payer health care.

Key considerations to note:

  • The report addresses whether or not unauthorized immigrants would be eligible for universal health care coverage, a population that averaged 11 million people per month in 2018.
  • A public plan means increased cost and provides a specified set of health care services to all eligible enrollees, meaning participants would not have a choice of insurer or health benefits like those that they do now.

Find the full report here.

DeLauro, Schakowsky Reintroduce the “Medicare for America Act”

On May 1, Reps. Rosa DeLauro (D-CT) and Jan Schakowsky (D-IL) reintroduced the “Medicare for America Act,” a bill that allows all Americans to enroll in an expanded Medicare program that includes coverage of prescription drugs, dental, vision, hearing and long-term care for disabilities. Anyone already enrolled in Medicare, Medicare or the Children’s Health Insurance Program on the Affordable Care Act would be enrolled automatically. Private insurance would still exist alongside Medicare for America.

Monitor the bill here.


CMS: RFI to Spur State Interest in Eased 1332 Waiver Criteria

On May 3, the Centers for Medicare and Medicaid Services (CMS) and the Department of the Treasury released a request for information (RFI) asking for ideas on how to entice states to apply for Affordable Care Act 1332 waivers that take advantage of the more-flexible criteria set by the Trump administration last fall. Only eight states requested waivers under the Obama administration era’s guidance and all but one of those was to create a state-based reinsurance program. No states have requested waivers under the Trump administration’s updated guidance so far.

Find the RFI here.

CMS Outlines Comprehensive Strategy to Foster Innovation for Transformative Medical Technologies

On May 2, at the Medical Device Manufacturers Association (MDMA) annual meeting, Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma outlined CMS’ comprehensive strategy to improve patients’ access to emerging technologies. The future directions outlined in the address build on recently released CMS policies intended to spur innovation in health care:

  1. For issuing Healthcare Common Procedure Coding System (HCPCS) codes, CMS is changing the current process of allowing only one opportunity per year to apply for new Level II codes. CMS is moving to a process with quarterly opportunities to apply for drugs, and semi-annual opportunities to apply for devices. The intention is to improve the ability for technologies to move through the adoption curve, and additional details will be forthcoming on the updates to the process.
  2. For technologies with Current Procedural Terminology (CPT) Category III codes (which are temporary codes used for emerging technologies), CMS is clarifying that for technologies that do not fall under an existing LCD, Medicare contractors are required to follow the transparent new Local Coverage Determination process for every local coverage decision, including reviewing the evidence with respect to the technology. This clarification was part of a list of answers to commonly asked questions about the Local Coverage Determination.

Find Administrator Verma’s full speech here.

FDA Launches Webpage for Complex Generic Guidance Updates

On May 1, the Food and Drug Administration (FDA) announced the launch of a webpage dedicated to making public plans to issue or revise guidances for complex generic drugs. The launch follows a recommendation made by the Government Accountability Office (GAO) one year ago. The purpose of the webpage is to help generic drug companies better plan their development of complex generic drug products. The webpage will be updated each quarter, when the FDA issues a new set of product-specific guidances.

Find the new webpage here.

Final Regulations

CMS Finalizes Rule to Protect Medicaid Provider Payments

On May 2, the Centers for Medicare and Medicaid Services (CMS) released the Medicaid Provider Reassignment Regulation final rule removing a state’s ability to divert portions of Medicaid provider payments to third parties outside of the scope of what the statute allows. The intention of the final rule is to ensure that providers receive their complete payment, and that any circumstance where a state redirects part of a provider’s payment is clearly allowed under the law.

Find 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.


Trump Administration Files Formal Request to Strike Down Entire Affordable Care Act

On May 1, the Trump administration formally declared its opposition to the entire Affordable Care Act (ACA), arguing in a federal appeals court filing that the law was unconstitutional and should be struck down, a position the Department of Justice (DOJ) took in March.

The formal announcement mirrored the switch from the first position taken by the administration, where some portions of the law, including the provision allowing states to expand their Medicaid programs, remained constitutional.


CBO Score Outlines Potential Offset If HHS Rebate Rule Delayed

On May 2, the Congressional Budget Office (CBO) estimated that the Department of Health and Human Services (HHS) proposal to eliminate anti-kickback safe harbors extended to pharmacy benefit managers (PBMs) for rebate negotiations and instead extend them to point-of-sale discounts, would increase federal spending $177 billion from 2019 to 2029. Part D plan sponsors often use the savings from rebates negotiated by pharmacy benefit managers (PBMs) to lower premiums across membership, meaning premiums would also go up as a result of the Trump administration’s proposed rule.

Find the CBO score report here.

GAO: Veterans Health Administration — Past Performance System Recommendations Have Not Been Implemented

On April 30, the Government Accountability Office (GAO) released a report that the Veterans Health Administration (VHA), after previous reviews internally of the Strategic Analytics for Improvement and Learning (SAIL) system and one review from a private consulting organization, neither assessed the given recommendations nor implemented them. The report finds that while the VHA ranks medical centers on overall quality from 1 star to 5 stars, these rankings are based on a performance measurement system that may not effectively measure quality of care. The VHA has been on the GAO High Risk List since 2015.

The GAO recommends:

  • The Under Secretary for Health assess recommendations from two previous evaluations of SAIL. This assessment should include the documentation of decisions about which recommendations to implement and assignment of officials or offices as responsible for implementing them.
  • The Under Secretary for Health implement, as appropriate, recommendations resulting from the assessment of the two previous SAIL evaluations.

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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