Washington Healthcare Update

July 29, 2019

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This week in Washington: The House is out for summer recess; Senate is in session until the end of this week.






Proposed Regulations/Guidance





Senate Committee on the Judiciary: “Oversight of the Enforcement of the Antitrust Laws”

Tuesday, July 23, 2019: The Senate Committee on the Judiciary’s Subcommittee on Antitrust, Competition Policy, and Consumer Rights held another hearing related to antitrust laws, seeking suggestions on oversight and enforcement at the federal level.

Why this is important: Members of the committee questioned executives from Amazon, Apple, Facebook and Google as part of the investigation into the major tech companies and possible anticompetitive threats posed. Members asked about a range of topics, from digital piracy to the disappearance of Facebook competitor MySpace, as well as Amazon’s competition with sellers that do business on its website. The executives argued that their organizations face robust competition from a variety of entities and that their products and platforms allow other businesses to be successful.

Senate Committee on Finance: “Promoting Elder Justice: A Call for Reform”

Tuesday, July 23, 2019: The Senate Committee on Finance held a hearing examining elder abuse by health care providers. Find witness testimonies and hearing updates as they become available here.

Why this is important: The Government Accountability Office (GAO) and the Office of the Inspector General (OIG) at the Department of Health and Human Services (HHS) released reports last week, with representatives testifying that the committee’s reauthorization of the Elder Justice Act should include nursing home reforms. Both the chairman of the committee and the ranking member have decades-long history in nursing home reform. The Centers for Medicare and Medicaid Services (CMS) has agreed to tighten reporting guidance and data requirements for state survey agencies on abuse and neglect in nursing homes following the reports and hearing, yet has not allowed the OIG to examine claims data.

House Ways and Means Committee: “Legislative Hearing on the Social Security 2100 Act”

Thursday, July 25, 2019: The House Ways and Means Committee held another hearing examining H.R. 860, the Social Security 2100 Act, introduced by Rep. John Larson (D-CT). Find the legislation here. Find witness testimonies and hearing updates as they become available here.

Why this is important: The committee held its fourth hearing on the Social Security 2100 Act, sponsored by 210 Democratic members, to expand Social Security benefits across the board. The bill is financed by increases in the 12.4 percent Social Security payroll tax rate and phasing out of the current $132,900 salary ceiling on which Social Security taxes apply. The payroll tax would rise by 0.1 percentage point each year. Social Security taxes would also be applied to earnings over $400,000. But since this dollar figure would not be indexed for wage growth, as is the current payroll tax ceiling, over several decades all earnings would be subject to Social Security taxes.

Senate Finance Committee: “Open Executive Session to Consider an Original Bill Entitled the Prescription Drug Pricing Reduction Act of 2019”

Thursday, July 25, 2019: The Senate Finance Committee held a markup on a legislative package to lower the costs of drugs. The legislation is entitled the Prescription Drug Pricing Reduction Act of 2019 (PDPRA), introduced by Chairman Chuck Grassley (R-IA) and Ranking Member Ron Wyden (D-OR). Find the hearing and related documents here. Find the CBO score here.

Why this is important: The bill is a bipartisan work product of the chairman and the ranking member. The bill, which would cap what Medicare beneficiaries pay for prescription drugs at $3,100 a year beginning in 2022 and would cap drug costs by requiring drug manufacturers to give rebates to Medicare if they increase their prices above inflation, was favorably reported to the Senate floor by a 19-9 vote.

An effort by Republicans to throw out the inflation cap piece of the bill narrowly lost by a 14-14 vote. Republicans said they opposed the provision out of concern that it is government price setting of prescription drugs. The director of the Congressional Budget Office (CBO) testified that the bill does not set drug prices, and only limits subsidies, which in turn will affect drug prices. The CBO score reported that the bill would save beneficiaries $27 billion in out-of-pocket costs.

House Committee on Oversight and Reform: “The Patient Perspective: The Devastating Impacts of Skyrocketing Drug Prices on American Families”

Friday, July 26, 2019: The House Committee on Oversight and Reform held another hearing on rising drug prices. Find witness testimonies and hearing updates here.

Why this is important: Since January, the committee has investigated pharmaceutical companies raising drug prices. On average, these prices escalated at five times the rate of inflation. The committee heard from a witness panel of patients who rely on medications with increasingly unaffordable prescriptions.


McKinley Introduces Bill to Prevent Patent Gaming, Boost Generic Market

On July 18, the House Energy & Commerce member David McKinley (R-WV) introduced a bill with cosponsor Rep. Peter Welch (D-VT) to amend a Food and Drug Administration (FDA) statute that provides monopoly extensions and incentivizes brand manufacturers to file numerous additional patents on their product in an attempt to prevent generic competition. 

Under the Reforming Evergreening and Manipulation that Extends Drug Years (REMEDY) Act, there would be fewer incentives for excessive patents, and the act would allow generic alternatives to enter the market without facing unnecessary litigation. The bill is a companion to Sen. Bill Cassidy’s (R-LA) REMEDY Act.

Monitor H.R. 3812 here.


Senate Passes Funding Patch for Medicaid Mental Health Pilot Program

On July 25, the Senate approved funding to keep a $1 billion Medicaid pilot providing mental health and addiction services running through mid-September.

An amendment to H.R. 3253, the Empowering Beneficiaries, Ensuring Access, and Strengthening Accountability Act of 2019, offered by Sen. Roy Blunt (R-MO), passed on voice vote. The amendment provides roughly $60 million to continue services through Sept. 13. The short-term funding is meant to support the program until funds appropriated for the next fiscal year are received. There is no timeline on when the House will take up the bipartisan bill.

Senate Will Not Vote on Drug-Pricing Bills Before August Recess

The Senate will not vote on drug pricing legislation before the August recess. The Senate’s recess begins Aug. 2. The Senate Finance, HELP, and Judiciary committees are expected to combine their drug-pricing bills into one package for a floor vote. Democrats have said they will not let a bill come to the floor unless they can offer amendments concerning drug price negotiations and protections for preexisting conditions.


HHS Announces Summit to Begin New Quality Roadmap

On July 9, the Department of Health and Human Services (HHS) announced a summit of public and health industry leaders to create a roadmap for streamlining HHS’s quality programs. The summit is a result of President Trump’s executive order for more transparency in health care signed in June. Deputy HHS Secretary Eric Hargan and Peter Pronovost, chief clinical transformation officer of University Hospitals, will chair a forum to discuss ways to revamp quality measures in the Centers for Medicare and Medicaid Services (CMS), the Centers for Disease Control and Prevention (CDC), the Agency for Healthcare Research and Quality (AHRQ) and others. The aim of the meeting is better understanding of the health system’s performance as the administration tries to improve these metrics and move toward value-based care.

HHS will accept nominations for participants until Wednesday, July 31, 2019.

Nominations must be submitted via email to DeputySecretary@hhs.gov with the subject line: “Quality Summit Application.”

Find further details on the summit here.

CMS Asks for Feedback to Reduce Regulatory Burdens

On June 6, the Centers for Medicare and Medicaid Services (CMS) announced a request for information (RFI) asking for another round of feedback on ways to cut administrative and regulatory burden through its Patients over Paperwork campaign, an initiative to lower health care costs. The RFI specifically looks for ways to cut down on the burden posed by prior authorization procedures, beneficiary enrollment and beneficiary eligibility determinations, as well as burdens on rural providers and duals.

Comments must be submitted by Aug. 12, 2019.

Find the RFI here.

Proposed Regulations/Guidance

CMS: Proposed Radiation Oncology (RO) Model

On July 10, the Centers for Medicare and Medicaid Services (CMS) proposed a Radiation Oncology (RO) Model as a payment model that tests if site-neutral payments, in which providers are paid the same rate no matter the care setting, for a 90-day episode of care can improve the quality of treatment and save Medicare money. The experiment targets radiation treatment for 17 different types of cancer. Payment will be based on proposed national base rates and trend factors and will be adjusted for geography and the mix of patients the provider treats.

Participants in the model could earn back a share of dollars that are withheld based on the quality of care and patient experience. The model is scheduled to begin next year and end in December 2024.

Find the unpublished, proposed rule here.

FDA: Harmonizing Compendial Standards with Drug Application Approval Using the USP Pending Monograph Process

On July 10, the Food and Drug Administration (FDA) released a draft guidance meant to speed up the generic drug approval process. The guidance explains how drug manufacturers should use the United States Pharmacopeia (USP) Pending Monograph Process (USP-PMP) to combine USP’s process for allowing revisions to compendial standards with the FDA’s approved quality and labeling requirements for drug product applications.

Find the draft guidance here.

Public comments must be submitted by Sept. 10, 2019.

FDA: Using the Inactive Ingredient Database

On July 10, the Food and Drug Administration (FDA) released a draft guidance that explains how drug manufacturers can better use the Inactive Ingredient Database (IID) in drug development, including to evaluate the safety of inactive ingredients, also known as excipients. The guidance discusses how the IID is structured; the data regarding excipients in the IID; and how nomenclature, maximum potency levels and units of measure are presented in the IID.

Find the draft guidance here.

Public comments must be submitted by Sept. 10, 2019.

FDA: Treatment for Heart Failure—Endpoints for Drug Development

On June 28, the Food and Drug Administration (FDA) released draft guidance seeking to clarify that an effect on symptoms or physical function, without a favorable effect on survival or risk of hospitalization, can be a basis for approving drugs to treat heart failure. The guidance also provides recommendations to sponsors on the need to assess mortality effects of drugs under development to treat heart failure.

Find the draft guidance here. Public comments are due by Aug. 28, 2019.

FDA: Biologics License Applications and Master Files

On June 28, the Food and Drug Administration (FDA) proposed a rule that allows biologic products to continue to include certain information, by reference, in drug master files even after having completed the transition from being regulated as drugs to being licensed as biologics. The goal of the proposal is to avoid disruptions and potential shortages. This includes insulin, which has been historically regulated as a drug and not a biologic. The proposed rule also codifies the FDA’s practice of allowing applications for biologics submitted under the Public Health Service Act (PHSA) to incorporate, by reference, certain information in master files, except for information related to the drug substance, drug substance intermediate or drug product.

Find the FDA press release here.

Find the proposed rule here. Public comments are due on Aug. 27, 2019

FDA Considering New Incentives for Safer Pain, Addiction Therapies

On June 20, the Food and Drug Administration (FDA) released a draft guidance weighing broader public health effects as it reviews proposed opioids that could be safer pain and addiction therapies, as well as any comparative advantage the proposed product would have over currently approved analgesics. The FDA also announced a public hearing for Sept. 17 to discuss the FDA’s benefit-risk assessment of opioid analgesics, including the manner in which risks of misuse and abuse of these products factor into the benefit-risk assessment.

Find the draft guidance, “Opioid Analgesic Drugs: Considerations for Benefit-Risk Assessment Framework,” here.

Public comments are due by Aug. 20, 2019.


Facebook Privacy Settlement Could Leave Patients at Risk

On July 24, the Federal Trade Commission (FTC) issued a settlement order with Facebook, requiring the company to set up an internal privacy oversight board and to document its use of health, financial, biometric and other sensitive information, as well as risks to consumers. The data the settlement requires Facebook to protect includes elements that the health care industry is required to protect under the Health Insurance Portability and Accountability Act (HIPAA).

The settlement does not address complaints patient advocates filed with the FTC alleging that the company failed to notify users that certain Facebook groups could divulge sensitive health data. It also does not include specific protections for patients using the platform to share health information with others who have the same medical condition.

Find the settlement order here.


GAO: Electronic Health Records—VA Needs to Identify and Report System Costs

On July 25, the Government Accountability Office (GAO) issued a report on the Department of Veterans Affairs’ (VA) need to comprehensively define the Veterans Health Information Systems and Technology Architecture (VistA), including a review of key aspects of VistA and the VA’s plans for modernization to the Cerner system, the same system used by the Department of Defense (DOD). The GAO found a lack of a sufficiently reliable total cost for VistA, and determined that addressing the lack of information could make the VA better positioned to transition to the new Cerner system.

The GAO recommends:

  • The Secretary of VA direct the Undersecretary for Health and the Assistant Secretary for Information and Technology/Chief Information Officer to develop and implement a methodology for reliably identifying and reporting the total costs of VistA. The methodology should include steps to identify the definition of VistA and what is to be included in its sustainment activities, as well as ensure that comprehensive costs are corroborated by reliable data.

Find the full report here.

GAO: Veterans Health Care—Opportunities Remain to Improve Appointment Scheduling within VA and through Community Care

On July 24, the Government Accountability Office issued a report that reiterates past recommendations that the Department of Veterans Affairs (VA) take action to ensure its facilities provide veterans with timely access to medical care. The report said that while the VA has taken a number of steps to address the recommendations, additional actions are needed:

  • The GAO found in 2012 that outpatient appointment wait times reported by VA were unreliable because VA did not ensure consistency in schedulers’ definitions of the dates by which wait times were measured. The GAO recommended that VA clarify these definitions. VA concurred and has taken a number of actions in response, including improved oversight through scheduling audits. However, VA’s first internal audit in August 2018 was unable to evaluate the accuracy and reliability of its wait-time data due to the lack of business rules for calculating them, indicating that additional efforts are needed to address this issue.
  • While improvements to VA’s scheduling policy and processes will help ensure veterans receive timely access to care, there are other factors that may also affect access that are not currently reflected in VA’s wait-time data. For example, the GAO found instances in which the time it took the agency to initially enroll veterans in VA health care benefits was more than three months.
  • The GAO has also made recommendations to improve appointment scheduling and ensure timely access to care from non-VA providers in VA’s community care programs that remain unimplemented. The GAO found in June 2018 that the data VA used to monitor the timeliness of the Veterans Choice Program’s appointments captured only a portion of the total appointment scheduling process. Although VA had a wait-time goal of 30 days, VA’s timeliness data did not capture certain processes, such as the time taken to prepare veterans’ referrals and send them to a third-party administrator. GAO found that if these were accounted for, veterans could potentially wait up to 70 calendar days to see a community care provider. VA officials stated that most recommendations will be addressed with new program tools it plans to implement. For example, VA is implementing a system for referral management and appointment scheduling expected to be available in all VA medical facilities by fiscal year 2021.
  • The GAO determined that while technology may be an important tool, VA would also need clear and consistent policies and processes, adequate oversight and effective training to help avoid past challenges.

Find the full report here.

GAO: Nursing Homes—Improved Oversight Needed to Better Protect Residents from Abuse

On July 23, the Government Accountability Office (GAO) issued an analysis on the Centers for Medicare and Medicaid Services’ (CMS) data and found that, while relatively rare, abuse deficiencies cited in nursing homes more than doubled, increasing from 430 in 2013 to 875 in 2017, with the largest increase in severe cases. The GAO also reviewed a representative sample of abuse narratives from 2016 through 2017. Physical and mental/verbal abuse occurred most often in nursing homes, followed by sexual abuse, and staff were more often the perpetrators of the abuse deficiencies cited. According to the report, CMS cannot readily access information on abuse or perpetrator type in its data and, therefore, lacks key information critical to taking appropriate actions.

The GAO recommends that:

  • The administrator of CMS require that abuse and perpetrator type be submitted by state survey agencies in CMS’s databases for deficiency, complaint and facility-reported incident data, and that CMS systematically assess trends in these data.
  • The administrator of CMS develop and disseminate guidance—including a standardized form—to all state survey agencies on the information nursing homes and covered individuals should include on facility-reported incidents.
  • The administrator of CMS require state survey agencies to immediately refer complaints and surveys to law enforcement (and, when applicable, to Medicaid Fraud Control Units (MFCU)) if they have a reasonable suspicion that a crime against a resident has occurred when the complaint is received.
  • The administrator of CMS conduct oversight of state survey agencies to ensure referrals of complaints, surveys and substantiated incidents with reasonable suspicion of a crime are referred to law enforcement (and, when applicable, to MFCUs) in a timely fashion.
  • The administrator of CMS develop guidance for state survey agencies clarifying that allegations verified by evidence should be substantiated and reported to law enforcement and state registries in cases where citing a federal deficiency may not be appropriate.
  • The administrator of CMS provide guidance on what information should be contained in the referral of abuse allegations to law enforcement.

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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