Washington Healthcare Update

December 9, 2019

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This Week in Washington: The House and Senate are back from Thanksgiving recess. Congress is expected to be in session until or about Dec. 20.

Upcoming Hearings and Markups





Final Regulations/Guidance

Proposed Regulations/Guidance



Upcoming Hearings/Markups

Tuesday, Dec. 10, 2019

House Committee on Energy and Commerce: “Proposals to Achieve Universal Health Care Coverage”

The Subcommittee on Health of the Committee on Energy and Commerce will hold a hearing on a variety of plans offered to achieve universal health care.

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

House Committee on Energy and Commerce: “Securing the U.S. Drug Supply Chain: Oversight of FDA’s Foreign Inspection Program”

The Subcommittee on Oversight and Investigations of the Committee on Energy and Commerce will hold a hearing on the methods, facilities and controls used in manufacturing, processing and packing of a drug product, through the FDA.

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

House Committee on Rules: “H.R. 3 – Elijah E. Cummings Lower Drug Costs Now Act”

The Rules Committee will meet to consider the rule under which H.R. 3, the Lower Drug Costs Now Act of 2019 [Elijah E. Cummings Lower Drug Costs Now Act of 2019]. In the House, all bills are considered under a rule which determines the length of debate and which amendments will be considered. The meeting will not begin before 3:45 p.m.  

Find more details as they become available here.

Thursday, Dec. 12, 2019

Senate Committee on Health, Education, Labor and Pensions (HELP): “Executive Session: S. 2971, Title VII Reauthorization, S. 2080, S. 2683, S. 2927 and Nominations”

The Senate HELP committee will hold an executive session on the following legislation and nominees:

  • S. 2971, CAPTA Reauthorization Act of 2019
  • S. ___, Title VII Reauthorization
  • S. 2080, Palliative Care and Hospice Education and Training Act
  • S. 2683, Child Care Improvement Act of 2019
  • S. 2927, NIMHD Research Endowment Revitalization Act of 2019
  • Nomination of Crosby Kemper III to be director, Institute of Museum and Library Services

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



House to Vote on Pelosi Drug Pricing Bill This Week

On Dec. 5, it was announced that Speaker Nancy Pelosi’s (D-CA) drug pricing bill, H.R. 3, will be voted on next week in the full House. As of now, there is no complete score of projected savings from the Congressional Budget Office (CBO) before the vote occurs. CBO has only evaluated the part of H.R. 3 that allows for direct government negotiation of some Medicare drug prices.

Progressive House Democrats are concerned that a provision by Rep. Pramila Jayapal (D-WA) added to the bill will dropped before the final bill goes to the House floor. The provision directs the federal government to examine how to require drug manufacturers to refund money to employer-sponsored health plans when the companies raised prices above the rate of inflation. Then regulations would have to be issued based on the study.

Pallone Works With FDA to Modify Cosmetics Bill, Eyes Preemption

On Dec. 4, House Energy & Commerce Chair Frank Pallone (D-NJ) said he has been working with the Food and Drug Administration (FDA) and Republican members, as well as stakeholders, to modify his bill, the Cosmetic Safety Enhancement Act of 2019. The changes would increase the FDA’s power to regulate cosmetics and shift the ingredient review and user fee language. Pallone added that he is open to adding some type of preemption clause. Ranking Member Greg Walden (R-OR) asked Pallone to add language preempting states’ cosmetics laws, and said whatever bill is voted on also should avoid burdening small businesses.


Senate Finance Releases Updated Drug Pricing Bill

On Dec. 6, the Senate Finance Committee’s Chairman Chuck Grassley (R-IA) and Ranking Member Ron Wyden (D-OR) released an updated version of the Prescription Drug Pricing Reduction Act of 2019. The bill now reduces senior’s Part D coinsurance, allows seniors to pay capped catastrophic costs over the year and moves part of the drug manufacturers’ share of seniors’ retail drug costs from the catastrophic phase of the program to the initial coverage phase. The changes resulted from an agreement after working with the Trump administration on updating the bill. The changes build off of the $25 billion reduction in beneficiary Part D cost-sharing (over a 10-year period) generated by the committee-reported bill by further reducing beneficiary costs on out-of-pocket spending.

Find the new text here.

Wyden, Booker Ask CMS, FTC and Health Care Companies to Evaluate Bias in AI Tools

On Dec. 3, Sens. Ron Wyden (D-OR) and Cory Booker (D-NJ) sent letters to the Centers for Medicare and Medicaid Services (CMS), the Federal Trade Commission (FTC) and the executives of UnitedHealth Group, Blue Cross Blue Shield, Cigna Corporation, Humana and Aetna asking them to ensure artificial intelligence tools used in health care are not biased. The letters warn that biased artificial intelligence algorithms can pose threats to marginalized communities by denying them care. In the letter to the health plans, the senators asked what artificial intelligence tools they use, what algorithms they use and why, and what efforts they make to combat biases. The senators asked for responses by Dec. 31 of this year.

Find the letter to CMS here.

Find the letter to the FTC here.

Find the letter to the chosen executives here.

Senate HELP Sends Nomination for FDA Commissioner to Senate Floor

On Dec. 3, the Senate Health, Education, Labor and Pensions Committee voted 18-5 in favor of Stephen Hahn’s nomination as FDA commissioner. The nomination will now go to the Senate floor for a final vote.


USMCA Biologics Provision May Be Changed If Deal Reached

To get the U.S.-Mexico-Canada trade agreement (USMCA) through Congress, the U.S. has proposed a plan to drop a provision that provides 10 years of market protection for drug manufacturers of biologic medicines. The Trump administration is currently in talks to reach a final agreement on the USMCA with Democrats in Congress and Mexico. The current provision includes a 10-year intellectual protection provided for biologics, which Mexico would like reduced. If the provision were dropped, then individual countries would set their own laws on biologics. This is an issue that continues to evolve.

Final Regulations/Guidance

CMS: Hospital Price Transparency Requirements: CY 2020 Hospital Outpatient Prospective Payment System (OPPS) Policy Changes

On Nov. 15, the Centers for Medicare and Medicaid Services (CMS) finalized policies that follow directives in President Trump’s executive order entitled “Improving Price and Quality Transparency in American Healthcare to Put Patients First.” The rule requires facilities to disclose currently confidential rates they have negotiated with insurers, what the hospital is willing to accept from a patient and the minimum and maximum negotiated charges. The requirement would apply for all items and services and be available online in a single data file.

Hospitals will have to post that information online for 300 common services in an easily understandable format. CMS will specify 70 of these services, and the rest can be chosen by the hospitals. Hospitals that do not comply could face fines of up to $300 per day.

Find the final rule here.

In response to comments, CMS is extending the effective date to Jan. 1, 2021, to ensure hospital compliance with these regulations.

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: Transparency in Coverage Proposed Rule

On Nov. 15, the Centers for Medicare and Medicaid Services (CMS) proposed a rule with the Department of Labor and the Department of the Treasury to implement President Trump’s executive order on Improving Price and Quality Transparency in health care.

The rule proposes to make each non-grandfathered group health plan or health insurance issuer offering non-grandfathered health insurance coverage in the individual and group markets be required to make available to participants, beneficiaries and enrollees (or their authorized representative) personalized out-of-pocket cost information for all covered health care items and services through an internet-based self-service tool and in paper form upon request. The same plans would be required to make available to the public the in-network negotiated rates with their network providers and historical payments of allowed amounts to out-of-network providers through standardized, regularly updated machine-readable files. This would provide opportunities for innovation to drive price comparison and consumerism in the health care market.

This proposed rule also solicits comments on:

  • Whether group health plans and health insurance issuers should also be required to make available through a standards-based application programming interface (API) the cost-sharing information referenced above that is proposed to be disclosed through the internet-based self-service tool and the machine-readable files.
  • How health care quality information can be incorporated into the price transparency proposals included in these proposed rules.

Find the proposed rule 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. The rules include 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 Best Practices in Drug and Biological Product Postmarket Safety Surveillance for FDA Staff

On Nov. 6, the Food and Drug Administration (FDA) released a draft guidance on best practices for drug safety surveillance, made available to the public in compliance with requirements of the 21st Century Cures Act. The draft guidance outlines the FDA’s approach for timely postmarket analyses of drugs and biologics, and includes a high-level overview of tools, methods and signal detection and evaluation activities, using varied data sources, for drug safety surveillance to provide a broader context and a general overview of our overarching effort and commitment in this area.

Find the draft guidance here. Public comments are due by Jan. 6, 2020.

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. Public 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.


Appeals Court Lifts Some Injunctions That Blocked “Public Charge” Rule for Immigrants

On Dec. 5, a three-judge panel of the 9th Circuit Court of Appeals voted, 2-1, to stay preliminary injunctions issued by federal judges in California and Washington against the “public charge” policy from the Trump administration just before it was to take effect in October. However, the policy is still on hold because federal judges in New York City and Maryland blocked the “public charge” rule as well. The 9th Circuit does not have jurisdiction over these courts. The Department of Justice (DOJ) is also appealing the remaining injunctions.

Hospitals Sue Trump Administration, Say Price Transparency Rule Violates Free Speech

On Dec. 4, the American Hospital Association (AHA), the Association of American Medical Colleges (AAMC), the Children’s Hospital Association (CHA) and the Federation of American Hospitals (FAH) sued the Trump administration in an attempt to block the new price transparency rule that requires hospitals to publish the rates they negotiate with insurers. The lawsuit says that forcing hospitals to disclose their secret negotiated rates violates the First Amendment, and that the rule violates the Affordable Care Act (ACA) and the Administrative Procedure Act. The plaintiffs argue that the Department of Health and Human Services (HHS) lacks the statutory authority to require and enforce this provision.

Find a press release on the lawsuit here.


GAO: Child Welfare – Various HHS Offices Provided Input on Decision to Grant Exception From Religious Nondiscrimination Requirement

On Nov. 25, the Government Accountability Office (GAO) released a report on federal funding for foster care contracts, and how rules for funding forbid religious discrimination against foster parent applicants. South Carolina is one of two states that have requested an exception to the religious discrimination rule. It argued that the rule violated faith-based foster care agencies’ rights because they had to abandon their beliefs or forego funding. The Department of Health and Human Services (HHS) granted the exception. This report describes HHS’s process for reviewing and approving requests for exceptions from its administrative grant regulations, including nondiscrimination requirements.

GAO focused this review on any requests for exceptions that would apply to programs operated under the Children’s Bureau, the specific office within HHS that oversees the federal foster care program, from 2014, the year the exception provision took effect, through 2019. GAO reviewed relevant federal laws and regulations, agency documents and both the letter from South Carolina requesting the exception and HHS’s response letter granting it.

Find the full report here.

GAO: Veterans Health Care – Services for Substance Use Disorders, and Efforts to Address Access Issues in Rural Areas

On Dec. 2, the Government Accountability Office (GAO) released a report on the addiction treatment paid by the Department of Veterans Affairs (VA) for veterans. Overall, veterans living in rural areas use VA’s addiction treatment services at the same rate as those in urban areas. However, providing treatment services in rural areas poses specific challenges to veterans and nonveterans alike, such as a shortage of specialized providers and lack of transportation. VA data analyzed by the GAO showed in rural areas, 27 percent of veterans with an opioid use disorder received medication-assisted treatment—an approach that combines behavioral therapy and the use of medications—compared to 34 percent in urban areas. The VA is taking steps to address these issues, such as using local service organizations to transport veterans for treatment.

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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