Washington Healthcare Update

September 16, 2019

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This week in Washington: Hearing on public health impact of e-cigarettes, meeting on continuing appropriations for fiscal year 2020, and hearing on how pharmaceutical companies game the system.

Upcoming Hearings/Markups





Proposed Regulations/Guidance

Final Rules/Guidance




Upcoming Hearings/Markups

Tuesday, Sept. 17, 2019

House Committee on Rules: Meeting on continuing appropriations for fiscal year 2020

The House Committee on Rules will hold a meeting to discuss the continuing appropriations resolution for fiscal year 2020, following the Senate Appropriations Subcommittee on Labor-HHS-Education canceling its markup for the Labor-HHS appropriations bill last week. Find more information on the meeting here.

Thursday, Sept. 19, 2019

House Energy and Commerce Subcommittee on Consumer and Protection and Commerce: Profits over Consumers” Exposing How Pharmaceutical Companies Game the System” 

House Energy and Commerce Chairman Frank Pallone, Jr. (D-NJ) and Consumer Protection and Commerce Subcommittee Chair Jan Schakowsky (D-IL) announced that the Consumer Protection and Commerce Subcommittee will hold a hearing on Thursday, Sept. 19, at 10:30 a.m. in Room 2322 of the Rayburn House Office Building on product hopping in the pharmaceutical market. Information for this hearing, including the Committee Memorandum, witness list and testimony, and a live webcast, will be posted here as they become available.

Wednesday, Sept. 25, 2019

House Energy and Commerce Committee, Subcommittee on Oversight and Investigations: Hearing on public health impacts and regulatory authorities related to e-cigarette manufacturing, sales and use

Energy and Commerce Chairman Frank Pallone, Jr. (D-NJ) and Oversight and Investigations Subcommittee Chair Diana DeGette (D-CO) announced that the Oversight and Investigations Subcommittee will hold a hearing on Wednesday, Sept. 25, on the public health impacts and regulatory authorities related to e-cigarette manufacturing, sales and use. Testimony will be provided by the Centers for Disease Control and Prevention (CDC), the Food and Drug Administration (FDA) and state health officials.



House Committee on Energy and Commerce: “Improving Maternal Health: Legislation to Advance Prevention Efforts and Access to Care”

The Energy and Commerce Subcommittee on Health held a hearing on several bills to improve maternal health and welfare. The hearing discussed four maternal health bills: the Mothers and Offspring Mortality and Morbidity Awareness Act, introduced by Rep. Robin Kelly (D-IL); the Quality Care for Moms and Babies Act, introduced by Rep. Eliot Engel (D-NY); the Maternal Care Access and Reducing Emergencies Act, introduced by Rep. Alma Adams (D-NC); and the Healthy MOMMIES Act, introduced by Rep. Ayanna Pressley (D-MA).

Find witness testimonies and hearing updates here.

Why this is important: Republicans on the subcommittee expressed concern that passing federal legislation to ensure Medicaid coverage for beneficiaries up to one year after giving birth would prevent states from deciding how long the program should cover new mothers.

House Committee on Oversight and Reform: “The Administration’s Apparent Revocation of Medical Deferred Action for Critically Ill Children”

The House Committee on Oversight and Reform held a hearing to investigate the decision by Customs and Immigration Services (USCIS) to end consideration of non-military deferred action requests, commonly known as medical deferred action.

Find witness testimonies and hearing updates here.

Why this is important: Members heard from those affected by the policy, while Democratic members displayed frustration as representatives from Immigration and Customs Enforcement (ICE) refused to comment on the policy during the hearing. Rep. Ocasio-Cortez (D-NY) asked representatives to answer her questions on who recommended they give no comment at the subcommittee under oath and suggested that if they did not answer the questions, the subcommittee should seek a subpoena.


House Ways and Means Committee Aims for Surprise Billing Legislation in October

On Sept. 11, House Ways and Means Chairman Richard Neal (D-MA) announced that a bill would be available for markup in late October related to surprise billing. The chairman also said they were not discussing an air ambulance fix while finalizing surprise medical billing legislation.

Currently, the House Energy & Commerce Committee and the Senate Health, Education, Labor and Pensions (HELP) Committee have marked up surprise billing legislation. Both the House Ways and Means and the Education and Labor committees are planning to introduce their own bills. The Senate bill includes an air ambulance fix setting out-of-network charges to a geographic area median rate and the Energy & Commerce legislation does not include air ambulance provisions.


Senate Finance Asks CMS to Share Pharmacy Fees at Point of Sale

On Sept. 12, a bipartisan group of members of the Senate Finance Committee urged the Centers for Medicare and Medicaid Services (CMS) to lower what seniors pay for drugs at the pharmacy by requiring insurers to subtract fees they charge pharmacies from the price of drugs at the point of sale. Last November, CMS considered redefining “negotiated price” to include pharmacy price concessions, but CMS did not follow through with the informal proposal. The Senate Finance Committee wants CMS to revive the proposal for 2021.

Funding for Mental Health Demonstration Program

The Certified Community Behavioral Health Clinic demonstration program will lose its funding on Sept. 13 if the Senate does not act to pass another extension, and, despite reassurances by senators that funding is a priority, nothing appears to be moving. The program, which gives clinics providing mental health care and substance use disorder services in participating states enhanced Medicaid reimbursement, has been repeatedly funded through short-term extensions this year.

The House approved a longer-term extension that would fund the program through Dec. 31, 2021. However, the Senate has not picked up the long-term extension bill. Just before August recess on July 30, Congress passed its most recent short-term extension for the program through Sept. 13. House Energy & Commerce Chair Frank Pallone (D-NJ) and ranking Republican Greg Walden (OR) called on the Senate then to take up the longer-term extension that passed the House in June.

Sens. Roy Blunt (R-MO) and Debbie Stabenow (D-MI) introduced a bill earlier this year to fund the program for an additional two years as well as expand the number of participating states to 19.

Without congressional action, upwards of 9,000 individuals will lose access to medication-assisted treatment and 3,000 staff providing addiction and mental health services risk being laid off.

Senate Appropriations Cancels Markups

The Senate Appropriations Subcommittee on Labor-HHS-Education canceled its markup for the Labor-HHS bill because Republicans said Democrats were going to offer amendments related to abortion and that violated the handshake agreement to not offer “poison pills.” Other markups were also canceled.

Congressional leaders are now working on a Continuing Resolution that will be needed since the start of the new fiscal year is Oct. 1. Without a CR, the government would shut down. The stopgap proposal is expected to be unveiled in the House shortly and is expected to run until midnight Nov. 21.

Proposed Regulations/Guidance

SAMHSA: Proposed Rule to Loosen 42 CFR Part 2

On Aug. 22, the Substance Abuse and Mental Health Services Administration (SAMHSA) proposed a rule that would loosen substance use record privacy restrictions. The proposed rule is part of the Department of Health and Human Services’ (HHS) “Regulatory Sprint to Coordinated Care,” championed by HHS Deputy Secretary Eric Hargan. The rule is one of four expected as part of the sprint, including changes to the Health Insurance Portability and Accountability Act (HIPAA), Stark Law and the anti-kickback statute. HHS Secretary Alex Azar commented that HHS does not have the authority to fully align 42 CFR Part 2 with HIPAA but expressed support for legislation to do so in Congress.

Find the proposed rule here. Public comments are due by Oct. 25, 2019.

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: 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 proposed rule here.

FDA: New Required Health Warnings with Color Images for Cigarette Packages and Advertisements to Promote Greater Public Understanding of Negative Health Consequences of Smoking

On Aug. 15, the Food and Drug Administration (FDA) proposed a rule to require new health warnings on cigarette packages and in advertisements to promote greater public understanding of the negative health consequences of smoking. The proposed warnings feature photo-realistic color images depicting the health risks of cigarette smoking. When finalized, this rule would fulfill a requirement in the Family Smoking Prevention and Tobacco Control Act.

The new warnings would appear prominently on cigarette packages and in advertisements, occupying the top 50% of the area of the front and rear panels of cigarette packages and at least 20% of the area at the top of cigarette advertisements. The warnings would be required to appear on packages and in advertisements 15 months after a final rule is issued.

Find the proposed rule here.

Public comments must be submitted by Oct. 15, 2019.

FDA: General Clinical Pharmacology Considerations for Neonatal Studies for Drugs and Biological Products

On July 31, the Food and Drug Administration (FDA) released a draft guidance regarding clinical trial design for newborns. The neonatal period is defined as the day of birth plus 27 days for full-term infants and as the day of birth through the expected date of delivery plus 27 days for preterm infants. The draft guidance provides the FDA’s current thinking on clinical pharmacology considerations for neonatal studies for drugs and biological products. It discusses neonatal subgroup classification, dose selection and study design and analysis considerations for the conduct of neonatal clinical pharmacology studies.

The guidance encourages the design of studies using input from a multidisciplinary team involved in neonatal care, including parents. The guidance also recommends that sponsors should use “innovative quantitative approaches” to study data gathered from adult, preclinical, animal, in vitro or other pediatric studies to predict the doses and clinical trial designs best suited for newborns.

Find the draft guidance here.

Public comments must be submitted by Sept. 30, 2019.

Final Rules/Guidance

FDA to Finalize Policy Regulating Flavored E-Cigarettes

On Sept. 11, the Department of Health and Human Services (HHS) announced the Food and Drug Administration (FDA) will finalize a compliance policy that prioritizes the enforcement of premarket tobacco application (PMTA) requirements for non-tobacco-flavored e-cigarettes, including mint and menthol, and will clear the market of authorized flavored e-cigarette products. All tobacco-flavored products will be able to remain on the market subject to PMTA requirements. Manufacturers also will be able to submit PMTAs for the flavored tobacco products that will be removed from the market. The final guidance is expected in the coming weeks.


Supreme Court Schedules Oral Arguments in Oral ACA Insurer Cases

On Sept. 13, the Supreme Court said it will hear oral arguments on Dec. 10, 2019, in three combined cases from health insurers who say the federal government owes them hundreds of millions of dollars in Affordable Care Act (ACA) payments. The three insurers in the combined cases, Moda Health Plan, Land of Lincoln Mutual Health and Maine Community Health Options, argue they are owed money from the ACA’s risk corridor program, which was meant to protect insurers from huge losses during the first few years of the overhauled individual market. The ruling could serve as a precedent for dozens of other pending cases worth over $12 billion.


Medicaid Enrollment Decline Factors Into 8.5 Percent Uninsured Rate

On Sept. 10, new data from the Census Bureau’s Current Population Survey showed that a drop-off in Medicaid enrollment was the primary driver of the nation’s uninsured rate climbing to 8.5 percent in 2018, the first year since 2009 that the rate increased. About 17.9 percent of the country received Medicaid coverage in 2018, down from 18.5 percent in 2017. A decline of 0.7 percentage points represents about 2 million fewer people nationwide receiving Medicaid, and it was the largest change of any insurance type. Overall, 27.5 million people lacked health insurance last year, up from 25.6 million in the previous year.

Find the full report here.


GAO: Medicaid — Efforts to Identify, Predict or Manage High-Expenditure Beneficiaries

On Sept. 12, the Government Accountability Office (GAO) released a report on how states manage health care costs and improve care for high-cost Medicaid beneficiaries. The GAO previously reported that in fiscal years 2009 through 2011, the most expensive 5 percent of Medicaid beneficiaries accounted for nearly half of the expenditures for all beneficiaries; others have also found that a small percentage of beneficiaries account for a disproportionately large share of Medicaid program expenditures. These high-expenditure beneficiaries are an extremely diverse population with varying needs. The GAO found in this report that the seven selected states identified or predicted high-expenditure Medicaid beneficiaries using statistics and other approaches. For example, some states used risk scores, which estimate an individual beneficiary’s expected health care expenditures relative to the average expenditures for beneficiaries in the group.

To manage costs and ensure quality of care for high-expenditure beneficiaries, the seven selected states used care management and other strategies:

  • Care management – All the selected states provided care management, providing various types of assistance such as coordinating care across different providers to manage physical and mental health conditions more effectively, for beneficiaries in their fee-for-service delivery systems. Five of the states also contracted with managed care organizations (MCO) to deliver services for a fixed payment and required the MCOs to ensure the provision of care management services to high-expenditure beneficiaries.
  • Other strategies – Some of the seven selected states used additional strategies to manage care for high-expenditure beneficiaries. For example, Indiana officials described a program to restrict, or “lock in,” a beneficiary who has demonstrated a pattern of high utilization to a single primary care provider, hospital and pharmacy, if other efforts to change the beneficiary’s high utilization were unsuccessful.

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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