Washington Healthcare Update

October 14, 2019

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This week in Washington: The House and Senate return tomorrow from a two-week-long recess.

Upcoming Hearings/Markups




Proposed Regulations/Guidance

Final Rules/Guidance




Upcoming Hearings/Markups

Thursday, Oct. 17, 2019

House Ways and Means Committee: “Investing in the U.S. Health System by Lowering Drug Prices, Reducing Out-of-Pocket Costs, and Improving Medicare Benefits”

The House Ways and Means Committee will hold a hearing on prescription drug pricing costs, as well as discussing the government drug price negotiation plan released by House Speaker Nancy Pelosi (D-CA), H.R. 3. The Ways and Means Committee is one of the committees to hold jurisdiction on the topic, and Chair Richard Neal (D-MA) is a cosponsor of H.R. 3.

Find more details on the hearing as they become available, here.

Ahead of the hearing, find the Congressional Budget Office (CBO) report on H.R. 3 here.



Blue Dog Democrats Urge Speaker Pelosi to Call Vote on Several Bipartisan Drug-pricing Bills

On Oct. 7, the Blue Dog Coalition asked House Speaker Nancy Pelosi to hold votes on several bipartisan drug-pricing bills, instead of wrapping them into government price negotiation legislation, the same request Republicans are making to the speaker. The Blue Dog Coalition also clarified that they want all the bills to be taken up separately from the drug-pricing bill that includes Pelosi’s drug-pricing plan, H.R. 3.

The Blue Dog Coalition wants the House to take up the following bills:

  • H.R. 965, the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act of 2019
  • H.R. 1499, the Protecting Consumer Access to Generic Drugs Act of 2019
  • H.R. 2115, the Public Disclosure of Drug Discounts Act
  • H.R. 1520, the Purple Book Continuity Act of 2019
  • H.R. 1503, the Orange Book Transparency Act of 2019
  • H.R. 1781, the Payment Commission Data Act of 2019
  • H.R. 938, the Bringing Low-cost Options and Competition while Keeping Incentives for New Generics (BLOCKING) Act of 2019

For more information about these bills here.


CMS Rejects GAO’s Advice to Supervise Costs of Medicaid Work Requirements

On Oct. 10, the Government Accountability Office (GAO) announced that the Centers for Medicare and Medicaid Services (CMS) rejected the GAO’s recommendation to consider the administrative costs of Medicaid work requirement programs when looking at whether 1115 waivers are budget neutral. The GAO report found that work requirements can increase Medicaid administrative costs as states that adopt the policy update their eligibility and enrollment systems, educate beneficiaries, train staff and develop ways to monitor compliance.

See GAO Report below.

CMS: Increasing Transparency on Abuse and Neglect for Nursing Home Patients, Residents, Families and Caregivers

On Oct. 7, the Centers for Medicare and Medicaid Services (CMS) announced the enhancement of the information available to nursing home residents, families and caregivers on CMS’s Nursing Home Compare website. The site will display a consumer alert icon next to nursing homes that have been cited for incidents of abuse, neglect or exploitation. This move is part of CMS’s five-part approach to ensuring safety and quality in nursing homes, which Administrator Seema Verma announced in April 2019.

The new alert icon will be launched on Oct. 23, 2019.

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.

OIG: Revisions to Safe Harbors Under the Anti-Kickback Statute, Etc.

On Oct. 9, the Department of Health and Human Services Office of Inspector General (OIG) proposed a rule that creates three new safe harbors for certain remuneration exchanged between or among eligible participants: care coordination arrangements aimed at improving quality and outcomes; value-based arrangements with substantial downside financial risk; and value-based arrangement with full financial risk. Modifications to existing AKS safe harbors include more flexibility for part-time and outcomes-based arrangements, removing the part-time schedule requirement and the aggregate compensation set-in-advance requirement. Modifications were also made to expand and modify mileage limits to rural areas and for transportation of patients discharged from inpatient facilities. As for electronic health records, the proposal extends the interoperability provision.

Find the proposed rule here—it is not yet published in the Federal Register.

CMS: Modernizing and Clarifying the Physician Self-Referral Regulations (Stark Law Rule)

On Oct. 9, the Centers for Medicare and Medicaid Services (CMS) proposed a rule that will create new, permanent exceptions to the Stark Law for value-based arrangements. These exceptions would apply broadly to care provided to all patients, not just Medicare beneficiaries. The proposed rule requires health care entities to provide written documentation that explains arrangements and patient populations being targeted, and the outcomes being measured in terms of value. There is a new exception to protect compensation not exceeding an aggregate of $3,500 per calendar year if certain conditions are met, for limited remuneration to a physician.

There is also a new exception for cybersecurity technology and related services, where CMS proposes protecting arrangements involving the donation of certain cybersecurity technology and related services. Modifications to compensation exceptions were added. There is also a proposal to expand the 90-day grace period for writing requirements. CMS proposed the deletion of goal posts for when an entity knows the period of disallowance ended. And, the proposal includes modifying the physician contribution requirement to the electronic health records’ conditions, and allowing certain donations of replacement technology.

CMS is soliciting comments about the role of price transparency in the context of the Stark Law and whether to require cost-of-care information at the point of a referral for an item or service. 

Find the proposed rule here—it is not yet published in the Federal Register.

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: Patient-Focused Drug Development: Methods to Identify What Is Important to Patients’ Guidance

On Sept. 30, the Food and Drug Administration (FDA) released a second draft guidance in a series of four patient-focused drug development guidances, as required under the 21st Century Cures Act. The series looks at how to collect and submit information from patients and caregivers for medical product development and regulatory decision-making. This draft guidance explains three research methods to do so: qualitative research, quantitative research and mixed-method research.

Find the draft guidance here.

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

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 photorealistic 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 percent of the area of the front and rear panels of cigarette packages and at least 20 percent 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 tomorrow, Oct. 15, 2019.

Final Rules/Guidance

HHS: Guide for Clinicians on the Appropriate Dosage Reduction or Discontinuation of Long-Term Opioid Analgesics

On Oct. 10, the Department of Health and Human Services (HHS) released a report on opioid tapering, advising slow, cautious and deliberate decisions in reducing dosages, while consulting patients the entire time. The guidelines emphasize a personalized approach to opioid tapering for each patient, and do not recommend opioids be tapered rapidly or discontinued suddenly due to the significant risks of opioid withdrawal, unless there is a life-threatening issue confronting the individual patient.

Find the full guidance here.

CMS: Revisions to Requirements for Discharge Planning for Hospitals, Critical Access Hospitals and Home Health Agencies, and Hospital and Critical Access Hospital Changes to Promote Innovation, Flexibility and Improvement in Patient Care

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 Sept. 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 Nov. 4, 2016.

Find the final rule here.


Federal Judge Blocks Public Charge Rule

On Oct. 11, three federal judges temporarily blocked the Trump administration’s public charge rule that denies green cards and visa extensions to immigrants if they briefly use Medicaid or other forms of public assistance such as food stamps, housing subsidies and cash assistance. The lawsuit was filed by New York, Connecticut and Vermont, where the three judges issued injunctions. The lawsuit argues that the Department of Homeland Security is violating the Administrative Procedure Act by issuing the rule. The Trump administration issued a statement on Oct. 11, expressing disappointment with the injunctions.


Medicaid and CHIP Payment and Access Commission (MACPAC) October Meeting

MACPAC will meet on Oct. 31–Nov. 1, 2019, at the Ronald Reagan Building and International Trade Center.


GAO: Medicaid Demonstrations – Actions Needed to Address Weaknesses in Oversight of Costs to Administer Work Requirements

On Oct. 10, the Government Accountability Office (GAO) released a report on states that require Medicaid beneficiaries to report work or other activities like training in order to keep their Medicaid coverage. As of July, the Centers for Medicare and Medicaid Services (CMS) had approved nine states’ requests to test these requirements.

The GAO found that costs to administer work requirements range from millions to hundreds of millions of dollars per state. The GAO added that CMS does not consider these costs when approving work requirements, which are not supposed to increase Medicaid spending.

The GAO recommends:

  • The administrator of CMS require states to submit and make public projections of administrative costs when seeking approval of demonstrations, including those with work requirements and all other demonstrations.
  • The administrator of CMS account for the administrative costs of demonstrations, including those with work requirements and all other demonstrations, when assessing whether demonstrations are budget neutral.
  • The administrator of CMS assess the risks of providing federal funds for costs to administer work requirements that are not allowable and should respond to risks by improving oversight procedures, as warranted. This assessment should consider risks related to costs for information systems, beneficiary supports and managed care.

Find the full report here.

GAO: Medicare – Spending on Certain Disposable Wound Care Devices in Home Health

On Oct. 10, the Government Accountability Office (GAO) released a report on disposable negative pressure wound therapy devices that home health agencies provide to homebound beneficiaries. Considering that Medicare does not generally cover disposable devices, the GAO found that Medicare paid home health agencies about $735,000 for these devices, provided to 340 beneficiaries from January 2017–June 2018.

Outside of Medicare, the GAO found limited coverage for disposable negative pressure wound therapy (NPWT) devices for use in the home, based on its review of publicly available medical policies and coverage information. For the five selected state Medicaid programs that the GAO reviewed, the publicly available information reviewed did not explicitly establish coverage for disposable NPWT devices. Most of the eight commercial insurers the GAO reviewed do not currently cover home use of disposable NPWT devices.

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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