Washington Healthcare Update

September 30, 2019

Pardon Our Dust

We recently launched this new site and are still in the process of updating some of our archived content. Some details of this article may be incomplete, links may be broken, and other elements may not display properly yet. We appreciate your patience and understanding.

This week in Washington: The House and Senate are in recess.






Proposed Regulations/Guidance

Final Rules/Guidance






Senate Special Committee on Aging: “Promoting Healthy Aging – Living Your Best Life Long into Your Golden Years”

The Senate Special Committee on Aging held a hearing for seniors seeking to maintain a healthy lifestyle as they age.

Find the hearing transcript here.

House Energy and Commerce Committee, Subcommittee on Health: “Making Prescription Drugs More Affordable: Legislation to Negotiate a Better Deal for Americans”

The Subcommittee on Health of the Committee on Energy and Commerce held a legislative hearing to discuss Speaker Nancy Pelosi’s (D-CA) new drug pricing bill (H.R. 3), which gives the Department of Health and Human Services (HHS) authority to negotiate drug prices that apply to all payers, including the commercial market. The hearing also discussed several different proposals that would permit government negotiation of drug prices.

  • H.R. 3, the “Lower Drug Costs Now Act of 2019”
  • H.R. 275, the “Medicare Prescription Drug Price Negotiation Act of 2019”
  • H.R. 448, the “Medicare Drug Price Negotiation Act”
  • H.R. 1046, the “Medicare Negotiation and Competitive Licensing Act of 2019”

Find more information for this hearing here.

Why this is important: Progressive Democrats have said Speaker Pelosi’s proposed plan (H.R. 3) does not go far enough, but Democratic members did not act divided in their support of the bill during the hearing. Instead, Republican members emphasized the partisan nature of the bill, raising concerns that bipartisan gains made recently through work in the subcommittee have been lost with this new proposal. Republican members emphasized that they were left out of writing the bill.

House Energy and Commerce Committee, Subcommittee on Oversight and Investigations: “Sounding the Alarm: The Public Health Threats of E-Cigarettes”

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 held a hearing on Wednesday, Sept. 25, on the public health impacts and regulatory authorities related to e-cigarette manufacturing, sales and use. Testimony was provided by the Centers for Disease Control and Prevention (CDC), the Food and Drug Administration (FDA) and state health officials.

Find the hearing and corresponding materials here.

Why this is important: As of Sept. 19, 2019, 530 cases of lung illness associated with the use of e-cigarette products have been reported in 38 states and one U.S. territory. As of the same date, seven deaths related to this illness have been confirmed in California, Illinois, Indiana, Kansas, Minnesota and Oregon. Members are concerned, and gained insight from the witness panel on how to proceed after the FDA finalizes a compliance policy to prioritize the premarket authorization requirements to clear the market of unauthorized non-tobacco-flavored e-cigarettes, including mint and menthol e-cigarettes.

House Committee on Education and Labor: Health, Employment, Labor and Pensions (HELP) Subcommittee: “Making Health Care More Affordable: Lowering Drug Prices and Increasing Transparency”

The House Committee on Education and Labor, HELP subcommittee held a hearing on the drug-pricing plan released by House Speaker Nancy Pelosi (D-CA) last week. H.R. 3, the Lower Drug Costs Now Act of 2019, allows the secretary of the Department of Health and Human Services (HHS) to negotiate drug prices and creates fines for drug manufacturers that do not follow these negotiated prices.

Find the hearing and corresponding materials here.

Why this is important: Republican members are concerned that because Republicans were left out of the crafting of the legislation, the plan is partisan and will stifle the market and innovation. Republicans feel any progress toward a bipartisan proposal has been tarnished. Some witnesses and Republican members viewed the negotiation proposal as price controls on prescription drugs.

Republican members debated whether drug-pricing negotiations will deter innovation, while Democratic members argued that the NIH could carry the weight of innovative research. The hearing ended with no shared consensus between parties.


E&C Launches Investigation into Private Equity Firms’ Role in Surprise Billing

On Sept. 16, House Energy & Commerce Chairman Frank Pallone (D-NJ) and Ranking Member Greg Walden (R-OR) launched an investigation into private equity firms’ role in surprise medical billing, starting with three firms that own physician staffing companies and emergency transport companies: KKR & Co. Inc., Blackstone Group and Welsh, Carson, Anderson & Stowe. Reps. Pallone and Walden requested information and documents pertaining to the firms’ ownership of private physician staffing and emergency transportation companies, which research cited by the Energy and Commerce committee shows are a leading source of surprise medical billing.

Find the press release here.


Senate Passes CR to Avert Government Shutdown until Nov. 21

On Sept. 27, the Senate passed a continuing resolution (CR) 82-15 to fund the government through Nov. 21. The bill passed the House last week. President Trump is expected to sign the bill. The short-term funding bill includes a package of health extenders, including funding for community health centers and Medicaid in Puerto Rico and other territories at current levels.

The CR delays a $4 billion reduction in Medicaid disproportionate share hospital (DSH) payments through Nov. 21.

The CR includes a provision that was recommended from the Medicaid and CHIP Payment and Access Commission. That provision would exclude a manufacturer’s authorized generic drug price from the average manufacturer price of its brand product. The bill also would remove manufacturers from the definition of wholesaler in the Medicaid drug rebate program. The CR includes a short-term delay of the Medicaid DSH cuts.

Grassley, Wyden Release Legislative Text of Finance Committee-Passed Prescription Drug Pricing Reduction Act

On Sept. 25, Senate Finance Committee Chairman Chuck Grassley (R-IA) and Ranking Member Ron Wyden (D-OR) released the statutory text of the Prescription Drug Pricing Reduction Act (PDPRA), S. 2543. The text mirrors the chair’s mark that passed the Finance Committee in July with a bipartisan, two-thirds majority. The PDPRA would change enrollee cost sharing in the initial coverage limit and the coverage gap, cap enrollee cost sharing above the catastrophic out-of-pocket threshold and change the amount of annual out-of-pocket spending needed to trigger catastrophic coverage (from $5,100 to $3,100).

In addition, the financing structure of the benefit would be modified by lowering federal reinsurance during the catastrophic coverage period to 20 percent. The bill also sunsets the existing manufacturer discount program in the coverage gap and institutes a new manufacturer rebate in the catastrophic coverage phase of the benefit (equal to a 20 percent discount off net prices for branded drugs.

Find the statutory text of the bill here.

Find the Senate Finance Committee report here.

Warner Files for Forced Vote to Overturn Trump Administration ACA Waivers

On Sept. 25, Sen. Mark Warner (D-VA) filed a discharge petition forcing the Senate to vote on a resolution under the Congressional Review Act that would undo the Trump administration’s policy that allows states to use Affordable Care Act (ACA) 1332 waivers to provide “skimpy” health plans that do not meet the ACA benefit requirements. Filing a discharge petition starts a time line which means the Senate must vote by Nov. 12.

Despite the ACA’s requiring that a 1332 waiver provide coverage as affordable and comprehensive as the ACA’s, the Trump administration said people merely need to be offered, not enrolled in, coverage as comprehensive as ACA plans under a 1332 waiver. The administration said people could select a less-comprehensive plan, such as a short-term plan or association health plan, so long as an ACA plan were available.


FDA Approves First Vaccine That Prevents Both Monkeypox and Smallpox

On Sept. 24, the Food and Drug Administration (FDA) announced the first FDA-approved vaccine for both monkeypox and smallpox, a disease that FDA biologics director Peter Marks said many Americans have no immunity to and could pose a national security threat if it were released intentionally. The vaccine has been added to the Strategic National Stockpile, the country’s largest supply of medical supplies, for use in an emergency. Though vaccines for smallpox have existed in some form for centuries, this new vaccine, called Jynneos, is the first approved by the FDA to prevent monkeypox as well. The FDA said it is intended to be used in adults 18 years of age or older who are at high risk for infection with the diseases.

Find the press release here.

FDA to Revamp New Drug Review Office

On Sept. 26, the Food and Drug Administration (FDA) announced a major reorganization of the Office of New Drugs (OND), Office of Translational Sciences (OTS) and Office of Pharmaceutical Quality (OPQ). The purpose of the drug center reorganization, named the New Drugs Regulatory Program Modernization, is to make drug reviews more effective and efficient by increasing the number of review divisions. Each review division will specialize in certain types of drugs. The reorganization is the first phase of FDA’s ongoing multiphase regulatory improvement initiative, which includes structural changes, process and documentation improvements, and enhancements to administrative and regulatory operations.

Find more information here.

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: 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

CMS’ Discharge Planning Rule Supports Interoperability and Patient Preferences

On Sept. 26, the Centers for Medicare and Medicaid Services (CMS) issued a final rule revising the discharge planning requirements that hospitals (including long-term care hospitals, critical access hospitals [CAHs], psychiatric hospitals, children’s hospitals and cancer hospitals), inpatient rehabilitation facilities and home health agencies must meet to participate in Medicare and Medicaid programs. It requires the discharge planning process to focus on a patient’s goals and treatment preferences. Additionally, hospitals are mandated to ensure each patient’s right to access their medical records in an electronic format.

The rule also implements requirements from the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act) that includes how facilities will account for and document a patient’s goals of care and treatment preferences. Additionally, if a patient is discharged to a post-acute care provider, the rule requires the facility’s care team assist patients, their families or the patient’s representative in selecting a post-acute care (PAC) provider by sharing key performance data.

This rule finalizes the provisions of the following three distinct proposed rules:

  • Regulatory Provisions to Promote Program Efficiency, Transparency, and Burden Reduction (“Omnibus Burden reduction”), published September 20, 2018;
  • Hospital and Critical Access Hospital (CAH) Changes to Promote Innovation, Flexibility, and Improvement in Patient Care, published June 16, 2016; and
  • Fire Safety Requirements for Certain Dialysis Facilities, published November 4, 2016.

Find the final rule here.


NIH Awards Nearly $1 Billion in Research Grants to Address Addiction, Chronic Pain

On Sept. 25, the National Institutes of Health (NIH) announced the allocation of $945 million in grants to researchers investigating how to combat opioid addiction and chronic pain. The funding is the largest sum ever given to one program by the NIH, though it will not provide services directly to people who have already been affected by the opioid epidemic. The funding extends across 41 states through the Helping to End Addiction Long-term Initiative or NIH HEAL Initiative. The trans-NIH research effort aims to improve treatments for chronic pain, curb the rates of opioid use disorder (OUD) and overdose, and achieve long-term recovery from opioid addiction.

Find more information here.


GAO: Animal Use in Research – Federal Agencies Should Assess and Report on Their Efforts to Develop and Promote Alternatives

On Sept. 24, the Government Accountability Office (GAO) released a report on how the Department of Health and Human Services (HHS), Department of Agriculture (USDA) and Environmental Protection Agency (EPA) have developed animal use alternatives and collaborate on these efforts in an interagency group. However, the agencies do not routinely measure the effect of those efforts. The GAO found that the group of agencies have not routinely developed or reported metrics that demonstrate how their efforts to encourage the use of alternative methods affect animal use. They have also not designated an interagency workgroup to address the challenges related to developing and reporting such metrics.

The GAO recommends:

  • The director of the NIH’s National Institute of Environmental Health Sciences (1) facilitate the establishment or designation of a workgroup of representatives of the Interagency Coordinating Committee on the Validation of Alternative Methods member agencies to develop metrics that the agencies could use to assess the progress they have individually or collectively made toward reducing, refining or replacing animal use in testing and (2) incorporate those metrics into the committee’s biennial progress reports.

Find the full report here.

GAO: Disaster Response – HHS Should Address Deficiencies Highlighted by Recent Hurricanes in the U.S. Virgin Islands and Puerto Rico

On Sept. 20, the Government Accountability Office (GAO) released a report on shortcomings in the Department of Health and Human Services’ (HHS) public health and medical services to the U.S. Virgin Islands and Puerto Rico after Hurricanes Irma and Maria. The GAO found that HHS’ disaster response had insufficient staffing at emergency operations centers that contributed to confusion over the status of evacuated patients. The deficiencies GAO identified were in many cases a function of preparedness policies, or lack thereof. As a result, they could adversely affect future large-scale responses unless addressed.

The GAO also found that HHS did not have a full understanding of the capabilities and limitations of its support agencies, including the Departments of Defense, Homeland Security and Veterans Affairs. Consequently, HHS’ needs were not always aligned with the resources that its support agencies could provide, resulting in some deployed resources not being properly and efficiently utilized. HHS also lacked plans for the territories that accounted for the chronic and primary care needs in isolated communities.

The GAO made seven recommendations, listed here.

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.

To sign up for the Weekly Washington Healthcare Update, use our onlinesubscription form.

McGuireWoods Consulting LLC
2001 K Street
Suite 400
Washington, DC 20006-1040
+1 202 857 1700