Washington Healthcare Update

December 16, 2019

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This Week in Washington: The House and Senate will leave for the holidays by Dec. 20.






Final Regulations/Guidance

Proposed Regulations/Guidance




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

Tuesday, Dec. 10, 2019: The Subcommittee on Health of the Committee on Energy and Commerce held a hearing on a variety of plans offered to achieve universal health care.

Why this is important: The committee examined nine legislative proposals that could expand health insurance coverage universally, including Medicare buy-in bills.

The legislation discussed:

  • H.R. 1277, the “State Public Option Act”
  • H.R. 1346, the “Medicare Buy-In and Health Care Stabilization Act of 2019”
  • H.R. 1384, the “Medicare for All Act of 2019”
  • H.R. 2000, the “Medicare-X Choice Act of 2019”
  • H.R. 2452, the “Medicare for America Act of 2019”
  • H.R. 2463, the “Choose Medicare Act”
  • H.R. 4527, the “Expanding Health Care Options for Early Retirees Act”
  • H.R. 584, the “Incentivizing Medicaid Expansion Act of 2019”
  • H.R. 2085, the “Consumer Health Options and Insurance Competition Enhancement Act” or the “CHOICE Act”

Find more details on the hearing here.

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

Tuesday, Dec. 10, 2019: The Subcommittee on Oversight and Investigations of the Committee on Energy and Commerce held a hearing on the methods, facilities and controls used in manufacturing, processing and packing of a drug product, through the FDA.

Why this is important: The committee discussed the FDA’s regulation of cosmetics, general public health preparedness and response to the flu season. There was further discussion of Chairman Frank Pallone’s (D-NJ) legislation, the Cosmetic Safety Enhancement Act of 2019.

Find more details on the hearing here.

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

Tuesday, Dec. 10, 2019: The Rules Committee considered H.R. 3, the Lower Drug Costs Now Act of 2019 [Elijah E. Cummings Lower Drug Costs Now Act of 2019].

Find more details here.

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

Thursday, Dec. 12, 2019: The Senate HELP committee held 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 here.


House Passes Speaker Pelosi’s Drug Pricing Plan, H.R. 3

On Dec. 12, the House voted 230-192 to pass H.R. 3, the Elijah E. Cummings Lower Drug Costs Now Act, forwarding the bill to the Senate. The bill, Speaker Nancy Pelosi’s (D-CA) drug pricing plan, requires pharmaceutical companies to directly negotiate the price of 50 drugs with the Department of Health and Human Services (HHS). The bill also includes Rep. Pramila Jayapal’s (D-WA) amendment to extend price-spike protections to private plans. Senate Majority Leader Mitch McConnell (R-KY) has already said the bill will not be considered in the Senate, and last week, Senate Finance Committee Chairman Chuck Grassley (R-IA) announced some updates to his bill with Ranking Member Ron Wyden (D-OR) that reduces Medicare beneficiary drug cost sharing and adjusts manufacturer discounts for pharmacy-dispensed drugs. Sen. McConnell has yet to indicate when a floor vote may be for the bill, S. 2543, the Prescription Drug Pricing Reduction Act (PDPRA).

Ways and Means Announces Surprise Medical Billing Plan

On Dec. 11, the House Ways and Means Committee released a proposal from Chairman Richard Neal (D-MA) and Ranking Member Kevin Brady (R-TX) that is now an alternative option to a previously announced bipartisan deal made with the Energy and Commerce Committee and the Senate Health, Education, Labor and Pensions (HELP) Chairman Lamar Alexander (R-TN). The Ways and Means plan would at first let insurers and doctors try to work out payment on their own, and if they cannot come to agreement, begin arbitration.

The Energy and Commerce/HELP Committees’ agreement would allow providers to receive reimbursement according to insurers’ median in-network rate for out-of-network care, but allow them to appeal to arbitration for amounts exceeding $750. Air ambulance bills have a threshold of $25,000 for arbitration. After the agreement’s announcement, the chairman of the Commerce Committee, Roger Wicker (R-MS), announced that he did not support the air ambulance fix and would like to change that, but it is unclear what he would substitute.

The Energy and Commerce Committee’s bill has support from the Senate HELP Committee and the Trump administration. Full text for the Ways and Means plan is not yet available.


Senate Confirms FDA Commissioner Nominee, Stephen Hahn

On Dec. 13, the Senate confirmed Stephen Hahn, 71-18, as the new Food and Drug Administration (FDA) commissioner. Hahn was chair of the radiation oncology department at the University of Pennsylvania medical school for nine years until 2015, when he joined MD Anderson Cancer Center in Texas and became the chief medical executive last year.

Congress Reaches Deal in Principle on $1.3 Trillion Budget Deal

On Dec. 12, House Appropriations Committee Chairman Nita M. Lowey (D-NY) and Senate Appropriations Committee Chairman Richard C. Shelby (R-AL) announced that a deal had been reached in principle to approve a $1.3 trillion deal in federal spending for 2020, in hopes of avoiding a government shutdown this week. The House could vote on the spending bill as soon as Tuesday, and the Senate is set to follow before the week is done. Negotiations for the delay or repeal of several health care-related taxes are ongoing, despite the deal. The talks on the delay or repeal of the Affordable Care Act’s (ACA) health insurance, medical device and Cadillac taxes continue with the shortened timeline.


HHS OIG: Medicare Advantage Plans Collected $6.7 Billion in Improper Payments

In a new report released Dec. 12, the Department of Health and Human Services’ (HHS) Office of the Inspector General (OIG) found that private insurers in the Medicare Advantage (MA) program may have improperly collected billions of federal dollars by inflating enrollees’ health conditions. The report showed data of insurers adding diagnoses for patients that were not in their doctors’ own records, at a cost of about $6.7 billion in 2017. The OIG report noted concern for the accuracy of the data, and further concern that if the patients are as sick as the insurers are claiming, the proper care was not provided.

Find the full report here.

USMCA Deal Eliminates Biologic 10-Year Protection, Patent Evergreening

On Dec. 10, a finalized deal on the United States, Mexico and Canada trade agreement (USMCA) between the Trump administration and Democrats in Congress led to the deletion of a provision that had a 10-year data exclusivity period for biologics, with the possibility of lowering drug prices as a result. The deal also takes out language that allows patent evergreening, when brand-name drug manufacturers extend patents to maintain power in the market when a new or related drug is created.

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.


GAO: Drug Safety – Preliminary Findings Indicate Persistent Challenges with FDA Foreign Inspections

On Dec. 10, the Government Accountability Office (GAO) released a report on concerns they had with the Food and Drug Administration’s (FDA) inspection of foreign and domestic drug manufacturers, when ensuring drug safety and effectiveness. The GAO found that the number of inspections of foreign drug manufacturers has declined since FY 2016, which FDA attributes in part to fewer inspectors and difficulty filling jobs abroad, and that most foreign inspections are preannounced, giving manufacturers time to prepare for inspections. The GAO has long-standing concerns about FDA’s ability to oversee the global supply chain, a High Risk Series issue for 10 years.

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

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