Washington Healthcare Update

November 4, 2019

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This week in Washington: Senate to hold a hearing on the response to lung illness and rising youth electronic cigarette use, as well as a hearing on protecting veterans from a variety of scams, including fake charities.

Upcoming Hearings/Markups






Final Regulations/Guidance

Proposed Regulations/Guidance


Upcoming Hearings/Markups

Wednesday, Nov. 6, 2019

Senate Committee on Aging: “Veteran Scams: Protecting Those Who Protected Us”

The Senate Committee on Aging will hold a hearing on protecting veterans from a variety of scams, including fake charities.

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

Wednesday, Nov. 13, 2019

Senate Health, Education, Labor and Pensions (HELP) Committee: “Examining the Response to Lung Illnesses and Rising Youth Electronic Cigarette Use”

The Senate Health, Education, Labor and Pensions (HELP) Committee will hold a hearing to examine the Food and Drug Administration’s (FDA) and Centers for Disease Control and Prevention’s (CDC) response to lung illnesses and rising youth electronic cigarette use.

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



Senate Committee on Finance: “Medicaid: Compliance with Eligibility Requirements”

Wednesday, Oct. 30, 2019: The Senate Committee on Finance, Subcommittee on Health held a hearing on eligibility requirements under the Medicaid program. This hearing foreshadows action that is expected to be taken by the administration soon related to states’ ensuring Medicaid recipients are eligible for Medicaid. 

Why this is important: The OIG recommended that states have better oversight over eligibility of enrollees, while the GAO identified the need for CMS to publicly share more data and take part in greater oversight of the state auditors. The Louisiana Legislative Auditor argued that states have too much latitude, and should be required to use federal tax data, with additional verification using federal databases.

The Center on Budget and Policy Priorities added that low-income Americans are having an unnecessary churn of going on and off coverage because it is difficult to reach them, or to report changes of status, and recommended better use of technology to do so.

In addition, the Centers for Medicare and Medicaid (CMS) is planning a rule focused on how states determine who is eligible for Medicaid. The effort follows concern from Trump officials that states are improperly classifying certain Medicaid beneficiaries as ACA expansion enrollees and getting more federal funds than allowed.

The administration is also considering a separate regulation to make more transparent how states finance their Medicaid programs and their use of supplemental payments. Concern has been raised that oversight of these arrangements has been lax and may lead to overspending. CMS could issue rules this fall.

Find more details on the hearing here.  

Senate Health, Education, Labor and Pensions (HELP) Committee: Health Legislation Markup, including Over-the-Counter (OTC) Drug Safety, Innovation, and Reform Act of 2019

Thursday, Oct. 31, 2019: The Senate Health, Education, Labor and Pensions (HELP) Committee held a markup of eight bipartisan, public health bills, all of which were favorably reported to the Senate floor, by voice vote.

  • S. 1657, Ticks: Identify, Control, and Knockout Act
    Sens. Susan Collins (R-ME), Angus King (I-ME) and Tina Smith (D-MN) introduced this bill that will authorize centers of excellence and grants to states to improve treatment of diseases transmitted by vectors like mosquitos, ticks and fleas. The legislation will also require a national strategy to ensure federal agencies coordinate to combat these diseases.
  • S. 2619, Healthy Start Reauthorization Act of 2019
    Sens. Richard Burr (R-NC) and Sherrod Brown (D-OH) introduced this bill to help prevent low birth weights to give babies the best opportunity at living long, healthy lives.
  • S. 1399, Title VIII Nursing Workforce Reauthorization Act of 2019
    Sens. Jeff Merkley (D-OR), Richard Burr (R-NN), Marsha Blackburn (R-TN) and Tammy Baldwin (D-WI) introduced a bill to update and reauthorize programs that help ensure we have the trained nurses that are needed. Sen. Lisa Murkowski (R-AK) added an amendment, adopted by voice vote, which added community health aides to the bill as well.
  • S. 995, Lifespan Respite Care Reauthorization Act of 2019
    Sens. Susan Collins (R-ME) and Tammy Baldwin (D-WI) introduced a bill to continue the support of state programs that give breaks to the 45 million Americans who provide care for a seriously ill or disabled family member with special needs.
  • S. 1130, Scarlett’s Sunshine on Sudden Unexpected Death Act
    Sens. Bob Casey (D-PA) and Johnny Isakson (R-GA) introduced a bill that provides grants to help states prevent sudden unexpected infant and child deaths and to better understand the causes of these deaths.
  • S. 1608, Promoting Physical Activity for Americans Act
    Sens. Roger Wicker (R-MS) and Sherrod Brown (D-OH) introduced a bill that requires the Department of Health and Human Services to routinely update its recommendations on exercise.
  • S. 2629, United States Public Health Service Modernization Act of 2019
    Sens. Mike Rounds (R-SD) and Doug Jones (D-AL) introduced a bill that allows the Secretary of HHS to create a ready reserve of public health professionals to ensure preparation in response to a national or public health emergency.
  • S. 2740, Over-the-Counter Drug Safety, Innovation, and Reform Act of 2019
    Sens. Johnny Isakson (R-GA) and Bob Casey (D-PA) introduced this bill to modernize how over-the-counter medications are regulated and brought to market. The bill includes a provision that provides 18 months of market exclusivity for new or improved OTC products to promote innovation and streamlines the FDA’s OTC rule-making process. The bill also authorizes a five-year user fee program at the Food and Drug Administration (FDA), allowing the FDA to make more hires in overseeing the industry.

Find markup details here.


House Passes Two Drug Price Reform Bills

On Oct. 28, 2019, the House unanimously passed two bills that, if enacted, would require public disclosure of the discounts drug companies provide to pharmacy benefit managers (PBMs). H.R. 2115, the Public Disclosure of Drug Discounts Act, would assist payers in comparing the discounts Pharmacy Benefit Managers (PBMs) receive from drug manufacturers. H.R. 1781, the Payment Commission Data Act of 2019, also passed the House, and gives the Medicare Payment Advisory Committee (MedPAC) and the Medicaid and CHIP Payment and Access Commission drug pricing and rebate data to aid in the recommendations provided to Congress.

McGuireWoods Consulting and McGuireWoods LLP co-authored a piece on the passage of these two bills, here.

Ways and Means Passes Speaker Pelosi’s Drug Pricing Negotiation Bill, H.R. 3

On Oct. 22, the House Ways and Means Committee passed its amended version of H.R. 3, the Lower Drug Prices Now Act, by a 24-17 vote along party lines. Health subcommittee Chairman Lloyd Doggett (D-TX) voted present on passage after unsuccessful attempts to expand the reach of the drug pricing reforms. The committee also endorsed renaming the bill the Elijah E. Cummings Lower Drug Prices Now Act.

The Ways and Means bill will now be consolidated with the marked-up bills from the House Energy and Commerce, and Education and Labor Committees for a full House vote, expected in November.


Senate Rejects Spending Package for Defense, Labor-HHS-Education, Energy-Water, Passes Four of Twelve Approps Bills

On Oct. 31, the Senate rejected the first procedural motion with a vote of 51-41 of the spending package, H.R. 2740, which included the Defense, Labor-HHS-Education, State-Foreign Operations and Energy-Water spending measures for fiscal 2020. The motion requires 60 votes of support. Senate Democrats said that Republican senators have not worked in a bipartisan manner to negotiate spending levels in H.R 2740.

The Senate did pass a minibus, H.R. 3055, with an 84-9 vote that includes four appropriations bills, Agriculture-FDA, Commerce-Justice-Science, Interior-Environment and Transportation-HUD.

Bipartisan Members of Congress Reintroduce Bill to Expand Telehealth Coverage

On Oct. 30, Sens. Brian Schatz (D-HI), Roger Wicker (R-MS.), Cindy Hyde-Smith (R-MS), Ben Cardin (D-MD) and Rep. Peter Welch (D-VT) reintroduced S. 2741, the CONNECT for Health Act, a bill that expands payment for telehealth services. The update takes out geographic restrictions on payment for various services, including for virtual mental health treatment, and allows patients to get coverage for treatment given in their homes.

The bill also waives some restrictions for national and public health emergencies, while removing site restrictions for the Indian Health Services and Native Hawaiian Health Care Systems and having the CMS’s Innovation Center test out a new telehealth payment model for Medicare.

Monitor the bill here.


Trump Administration Nominates Stephen Hahn as FDA Commissioner

On Nov. 1, the Trump administration nominated Stephen Hahn as the new Food and Drug Administration (FDA) commissioner. Since former FDA commissioner Scott Gottleib left his post in March 2019, Ned Sharpless has been the acting FDA commissioner. The deadline for a nomination was Nov. 1.

Final Regulations/Guidance

CMS: Final Rules for Calendar Year (CY) 2020 Medicare Payment Rates

On Nov. 1, the Centers for Medicare and Medicaid Services (CMS) issued a final rule that includes updates to payment policies, payment rates, and quality provisions for services furnished under the Medicare Physician Fee Schedule (PFS) effective on or after January 1, 2020. The changes in the final rule implement provisions of President Trump’s Executive Order on Protecting and Improving Medicare for Our Nation’s Seniors.

The final rule revises the times, medical decision-making process for all evaluation and management (E/M) codes and requires performance of history, and exam only when medically appropriate. A physician can choose the E/M visit level based on either medical decision making or time. The final rule also reduces the number of levels to four, from five levels of coding, for office/outpatient visits for new patients and revises some code definitions. It cuts payments for psychologists and social workers by 7%, and to physical therapists by 8% starting in 2021.

Find the final rule here.

CMS: New Home Infusion Therapy Benefit and Home Health Regulations

On Oct. 31, the Centers for Medicare and Medicaid Services (CMS) finalized changes to the Home Health Prospective Payment System (HH PPS), including a new home infusion therapy benefit. The final rule with comment period implements the executive order on Protecting and Improving Medicare for Our Nation’s Seniors, signed by President Trump, by eliminating requirements of the Medicare program that are more stringent than applicable federal or state laws for maintenance therapy. The final rule with comment period also increases Medicare payments to home health agencies (HHAs) by an estimated 1.3 percent ($250 million) for calendar year (CY) 2020.

The final rule with comment period will be published in the Federal Register on Nov. 8, 2019.

Find a link to the final rule with comment period, here.

CMS: Modernizing Payment Methodologies to Provide Kidney Patients with Better Value and Results

On Oct. 31, the Centers for Medicare and Medicaid Services (CMS) finalized changes to the Medicare rules for Durable Medical Equipment Prosthetics, Orthotics, and Supplies (DMEPOS), the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) and the ESRD Quality Incentive Program (QIP). These changes support the development and use of innovative technologies, provide more access to new treatments in kidney care and attempt to modernize program integrity methods to better combat waste, fraud and abuse in the Medicare program. They are also aligned with the goals of President Trump’s two recent executive orders on Advancing American Kidney Health and Protecting and Improving Medicare for Our Nation’s Seniors.

The final rule will be published in the Federal Register on Nov. 8, 2019.

Find the final rule here.

Proposed Regulations/Guidance

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.

Public comments must be submitted by Dec. 31, 2019.

CMS Informal RFI: Potential Oncology Care First Model in Preparation for the November 4 Public Listening Session

On Nov. 1, the Centers for Medicare and Medicaid Services (CMS) Center for Medicare and Medicaid Innovation (Innovation Center) announced that at its Public Listening Session, which invites feedback on value-based payment for high-quality oncology care, it hopes to gather feedback on an informal Request for Information (RFI) that outlines a potential Oncology Care First (OCF) Model.

The Public Listening Session will take place on Nov. 4, 2019.

Written feedback on the informal RFI will be accepted until Nov. 25, 2019, and can be sent to OCF@cms.hhs.gov.

Find the informal RFI here.

CMS Releases Kidney Care Choices Model Request for Application

On Oct. 24, the Center for Medicare and Medicaid Innovation (Innovation Center) announced that the request for applications (RFA) for the Kidney Care Choices (KCC) Model has been posted here. The deadline to submit an application is Jan. 22, 2020.

The KCC Model is a voluntary model to reduce Medicare expenditures while preserving or enhancing quality of care for beneficiaries with end-stage renal disease (ESRD) and chronic kidney disease (CKD). The KCC Model contains the following four options:

  1. The CMS Kidney Care First (KCF) option
  2. The Comprehensive Kidney Care Contracting (CKCC) Graduated option
  3. The CKCC Professional option
  4. The CKCC Global option

Stay up to date on the latest Kidney Care Choices Model news and updates by subscribing to the KCC Model listserv

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 rules includes the expansion of 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.

Public comments must be submitted by Dec. 31, 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: Draft Guidance on Developing Drugs for Hepatitis D Infection

On Nov. 1, the Food and Drug Administration (FDA) released a draft Chronic Hepatitis D Virus Infection: Developing Drugs for Treatment Guidance. The draft guidance will assist sponsors in the clinical development of drugs for the treatment of chronic hepatitis D virus (HDV) infection. HDV infection occurs only in people who have hepatitis B virus (HBV) infection.

The draft guidance addresses the FDA’s current recommendations regarding the overall development program and clinical trial designs for the development of drugs and biologics for the treatment of chronic HDV infection. Sponsors are encouraged to communicate with the FDA Center for Drug Evaluation and Research’s Division of Antiviral Products (DAVP) about the development of drugs to treat HDV infection.

Find the draft guidance here. Comments are due by Jan. 1, 2020.

FDA: Drug Products Labeled as Homeopathic Guidance

On Oct. 24, the Food and Drug Administration (FDA) pulled a compliance policy allowing leeway for unapproved homeopathic drugs to remain on the market if they met certain criteria, unless FDA found a quality or manufacturing issue. FDA said products should go through the formal drug approval process before they can be sold again.

To replace the older policy, the FDA released a revised draft guidance on a risk-based approach. As a result, FDA intends to prioritize enforcement and regulatory actions involving certain categories of such products that potentially pose a higher risk to public health.

Find the draft guidance here.

Public comments must be submitted by Dec. 24, 2019.

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.


GAO: Medicaid Eligibility – Accurate Beneficiary Enrollment Requires Improvements in Oversight, Data and Collaboration

On Oct. 30, the Government Accountability Office (GAO) released a report on Medicaid eligibility errors, as the Centers for Medicare and Medicaid Services (CMS) attempts to improve oversight of the Medicaid program. GAO has identified areas where additional actions could improve program oversight and ensure that only eligible individuals are enrolled in the Medicaid program. These actions include closing gaps in oversight of eligibility determinations and related expenses, improving data and furthering federal-state collaboration.

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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