Washington Healthcare Update

August 5, 2019

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This week in Washington: Congress is out for the summer work period. 





Proposed Regulations/Guidance

Final Guidances/Regulations




House Passes Short-Term Funding Extension for Medicaid Pilot Program

On July 30, the House passed a bill to keep a $1 billion Medicaid pilot providing mental health and addiction services running through mid-September—the third short-term funding extension in four months.

The bill, H.R 3253, passed during a pro forma session and already passed by the Senate, now heads to the president’s desk. It provides roughly $60 million to continue services through Sept. 13. The program’s champions plan to push for a longer-term extension.

The program was launched in 2017 and provides enhanced Medicaid funding to nearly 80 clinics across eight states designated as “certified community behavioral health centers.” If the funding ends, the clinics will stay open but will lose their enhanced match, which, clinic operators say, could lead to layoffs and reduced services.

The National Council for Behavioral Health, which provides technical assistance to the centers, estimates 300,000 people could lose access to services if funding isn’t renewed in September. That includes 9,000 people currently receiving medication-assisted treatment for opioid addiction.


Senate Passes Bipartisan Budget Deal, President Trumps Signs

On Aug. 1, the Senate passed a $2.7 trillion budget agreement with a 67-28 vote. The bipartisan agreement, H.R. 3877, passed in the House last week, and was signed by President Trump on Aug. 2. The agreement raises spending $320 billion over current levels and lifts the debt ceiling for two years. When Congress returns from summer recess, the process will begin to ensure funding is secured for after the Sept. 30 deadline.

Under the budget agreement, the defense spending limit will increase by $22 billion over current levels for fiscal 2020. The non-defense funding cap will be raised by $27 billion during that time. The measure hikes each of those budget limits by another $2.5 billion in fiscal 2021, which begins in October 2020.

Find the bipartisan deal here.


HHS Announces New Action Plan to Lay Foundation for Safe Importation of Certain Prescription Drugs

On July 31, the Department of Health and Human Services (HHS) and the Food and Drug Administration (FDA) announced a “Safe Importation Action Plan” that outlines two potential pathways that would lay the foundation for the safe importation of certain drugs originally intended for foreign markets.

The plan outlines the two pathways to allow safe drug importation from foreign markets:

  1. Authorization of pilot (or demonstration) projects developed by states, wholesalers or pharmacists and submitted for HHS review, outlining how they would import certain drugs from Canada that are versions of FDA-approved drugs that are manufactured consistent with the FDA approval. The notice of proposed rulemaking (NPRM) would include conditions to ensure the importation poses no additional risk to the public’s health and safety and that the demonstration projects would achieve significant cost savings to the American consumer.
  2. The FDA would provide recommendations to manufacturers of FDA-approved drugs who seek to import into the U.S. versions of those drugs they sell in foreign countries. Under this pathway, manufacturers would use a new National Drug Code (NDC) for those products, potentially allowing them to offer a lower price than what their current distribution contracts require. To use this pathway, the manufacturer or entity authorized by the manufacturer would establish with the FDA that the foreign version is the same as the U.S. version and appropriately label the drug for sale in the U.S. This pathway could be particularly helpful to patients with significantly high-cost prescription drugs. This would potentially include medications like insulin used to treat diabetes, as well as those used to treat rheumatoid arthritis, cardiovascular disorders and cancer.

Find the Action Plan here.

Trump Administration Tightens Rules for Opioid Prescriptions

During a White House drug policy briefing on July 29, on condition of anonymity under the media coverage rules established for the event, it was announced that the Federal Employee Health Benefits Program will tighten rules for covering prescription opioid painkillers. Under the new policy, the initial prescription will be for a 7-day supply, instead of up to 30 days. Patients will be able get up to three refills of 7 days apiece. Formal reauthorization that involves consulting a clinical professional will be required every 28 days.

CMS Advances MyHealthEData with New Pilot to Support Clinicians

On July 30, the Centers for Medicare and Medicaid Services (CMS) announced increased access to data for patients and providers though a new pilot program for clinicians called “Data at the Point of Care” (DPC). DPC is based on an industry-standard application-programming interface (API) and is part of the MyHealthEData administration-wide initiative led by the White House Office of American Innovation. Clinicians will be able to access the DPC pilot data directly within their workflow, without needing to log in to another application.

Find more information 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: CY 2020 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Proposed Rule

On July 29, the Centers for Medicare and Medicaid Services (CMS) proposed policies that follow directives in President Trump’s executive order entitled “Improving Price and Quality Transparency in American Healthcare to Put Patients First.” The proposed rule requires hospitals to not only publish their gross charges, or list prices, but also the negotiated price by specific payer and plan for a set of “shoppable” services. Those services could include anything that can be scheduled by a patient in advance, such as an MRI or hip replacement.

The rule also encourages site-neutral payment between certain Medicare sites of services, and proposes updates and policy changes under the Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System. The proposal includes the continuation of policy reducing reimbursement by nearly 30 percent for Part B drugs that hospitals buy through 340B. The policy is budget-neutral, so payment cuts are redistributed equally among hospitals.

Find the proposed rule here. The rule will be published on Aug. 8, 2019, and public comments are due on Sept. 27, 2019.

CMS: End Stage Renal Disease (ESRD) and Durable Medical Equipment Prosthetics, Orthotics and Supplies (DMEPOS) CY 2020

On July 29, the Centers for Medicare and Medicaid Services (CMS) issued a rule that proposes to update payment policies and rates under the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) for renal dialysis services furnished to beneficiaries on or after Jan. 1, 2020. This rule also proposes updates to the acute kidney injury (AKI) dialysis payment rate for renal dialysis services furnished by ESRD facilities to individuals with AKI and proposes changes to the ESRD Quality Incentive Program (QIP).

In addition, this rule proposes a methodology for calculating fee schedule payment amounts for new durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) items and services and making adjustments to the fee schedule amounts established using supplier or commercial prices if such prices decrease within five years of establishing the initial fee schedule amounts. This rule makes amendments to revise existing policies related to the competitive bidding program for DMEPOS and a Master List of DMEPOS items that could potentially be subject to face-to-face encounter and written order prior to delivery and/or prior authorization requirements.

The proposed rule includes requests for information (RFIs) on data collection resulting from the ESRD PPS technical expert panel, on possible updates and improvements to the ESRD PPS wage index, and on new rules for the competitive bidding of diabetic testing strips.

Find the proposed rule here. The rule will be published on Aug. 6, 2019.

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.

Final Guidances/Regulations

CMS: Fiscal Year 2020 Payment and Policy Changes for Medicare Inpatient Rehabilitation Facilities

On July 31, the Centers for Medicare and Medicaid Services (CMS) issued a final rule that updates Medicare payment policies and rates 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. This final rule moves CMS closer to unified post-acute care payment and updates IRF payment rates as required by statute.

Find the final rule here. The rule will be published on Aug. 8, 2019.

FDA Updates Guidance on Rare Pediatric Disease PRVs

On July 29, the Food and Drug Administration (FDA) released a revised draft guidance on rare pediatric disease priority review vouchers (PRVS), which are awarded to companies developing certain rare pediatric disease treatments and can then be sold. The revisions to the FDA’s guidance include a new definition for rare pediatric disease, as created by the Advancing Hope Act of 2016, which amends section 529 of the FD&C Act to define the pediatric population as from birth through 18 years. The FDA previously considered the pediatric population as from birth to 16 years.

The FDA revisions explains how the rare pediatric disease PRV program sunsets. After Sept. 30, 2020, the FDA may only award a voucher if the drug has rare pediatric disease designation and that designation was granted by Sept. 30, 2020. The FDA also includes revisions in the draft based on FDA’s experience with implementing the rare pediatric disease PRV program, including voucher request procedures.

Find the revised version here.


GAO: Medicare Physician Services—Spending On and Use of Billing Codes for Comprehensive Care Planning Services

On July 31, the Government Accountability Office (GAO) released a report on how doctors and other health care providers bill Medicare for care planning and how much was spent on these services. The GAO found that overall Medicare spending on longitudinal comprehensive care planning (LCCP)-type services that were billed to the 58 codes (13 specifically for care planning) increased from $26 billion in 2013 to almost $29 billion in 2017. While narrowly defined services accounted for a small share of this total spending ($467 million in 2017), spending on these narrowly defined services such as chronic care management increased rapidly. Moreover, spending growth on narrowly defined services was driven by increased use of these services rather than increases in reimbursement rates.

Find the full report here.

GAO: Medicare Plan Finder—Usability Problems and Incomplete Information Create Challenges for Beneficiaries Comparing Coverage Options

On July 30, the Government Accountability Office (GAO) released a report on the Medicare Plan Finder (MPF) website, a primary resource for comparing Medicare coverage options. The GAO found that it is difficult for beneficiaries to use and provides incomplete information, according to stakeholders and research studies. These sources and directors of State Health Insurance Assistance Programs (SHIP) GAO surveyed, who assist beneficiaries with their Medicare coverage choices, reported that beneficiaries struggle with using MPF because it can be difficult to find information on the website and the information can be hard to understand. For example, MPF requires navigation through multiple pages before displaying plan details, lacks prominent instructions to help beneficiaries find information, and contains complex terms that make it difficult for beneficiaries to understand information.

In response to the GAO’s survey, 73 percent of SHIP directors reported that beneficiaries experience difficulty finding information in MPF, while 18 percent reported that SHIP counselors experience difficulty. Medicare’s administrator plans to launch a redesigned website in August.

Find the full report here.

GAO: Medicaid—States’ Use and Distribution of Supplemental Payments to Hospitals

On July 29, the Government Accountability Office (GAO) released a report analyzing disproportionate share hospital (DSH) payments in Medicaid. The GAO analyzed data from the 2014 DSH audits, states’ independently audited and certified reports of hospital-level uncompensated care costs and DSH payments, from 47 states and the District of Columbia.

The GAO’s analysis of hospitals receiving DSH payments showed that in 2014, costs related to care for the uninsured comprised 68 percent of total uncompensated care costs, and the remaining 32 percent was the Medicaid shortfall. Across states, GAO found that total DSH payments varied significantly in 2014. DSH payment levels are generally tied to state DSH spending in 1992 and since 1993 states have been subject to a limit on the amount of federal funding that may be used for DSH payments.

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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