Washington Healthcare Update

January 21, 2020

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 is not in session. The Senate will resume the impeachment trial on Tuesday.






Proposed Regulations/Guidance




House Committee on Energy and Commerce: “A Public Health Emergency: State Efforts to Curb the Opioid Crisis”

Tuesday, January 14, 2020: The Subcommittee on Oversight and Investigations of the Committee on Energy and Commerce held a hearing on actions taken by states to address the current opioid crisis.

Why this is important: Common themes from the witness panel of representatives from Pennsylvania, Massachusetts, West Virginia, North Carolina and Rhode Island included an appreciation for federal funding, and requests to ensure that the funding remains stable and expected for many years, reminding the members of the committee that addressing the crisis is a long, but possible, process. The witnesses noted that recovery housing for those addicted to opioids has been helpful, and that key challenges for states is the threat of a small workforce and language barriers. The witnesses noted that in each state, there has been a shift from opioids to other substances (such as alcohol), and an increase in multisubstance and fentanyl overdose deaths specifically but the federal funding can only be used for opioid addiction/treatment in most cases. Yet, programs seem to be working and federal funding remains the foundation of that success.

Find hearing updates and details here.

House Committee on Energy and Commerce: “Cannabis Policies for the New Decade”

Wednesday, January 15, 2020: The Subcommittee on Health of the Committee on Energy and Commerce held a legislative hearing to discuss federal cannabis policies, the implications of changing marijuana’s schedule listing and the potential for cannabis research.

Find an overview of the hearing here.

Find hearing updates and details here.


Ways and Means Committee Releases Surprise Billing One-Pager

On Jan. 15, Ways and Means Chairman Richard Neal (D-MA) and ranking member Kevin Brady (R-TX) released a one-page plan to address surprise medical billing. The plan allows providers and insurers to work out billing disputes, with the option of turning to “an independent mediated negotiation process.” The approach contradicts the plan made from a compromise between Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Lamar Alexander (R-TN), House Energy and Commerce Chairman Frank Pallone (D-NJ) and Energy and Commerce ranking member Greg Walden (R-OR). The compromise made last year settles disputes by holding payments to providers to a federal benchmark payment based on median in-network rates. It would allow outside arbitration in some cases, such as for billing disputes over $750.

Find the House Ways and Means plan here.


Senate Passes USMCA; Biologic Protections Entirely Dropped

On Jan. 16, the Senate voted 89-10 to pass the United States-Mexico-Canada Agreement (USMCA). The final version of the deal included the removal of provisions that would have given pharmaceutical companies a 10-year pricing monopoly on biologic drugs in Mexico and Canada. The U.S. has 12-year pricing exclusivity for biologics, and House Democrats negotiated the change after fear that keeping the provisions in the USMCA would prevent future reduction of the U.S. timeframe to less than 10 years. The House passed USMCA last year.


FDA, USDA, EPA Launch Agriculture Biotechnology Regulation Website

On Jan. 10, the Food and Drug Administration (FDA), in collaboration the Department of Agriculture (USDA) and the Environmental Protection Agency (EPA), launched a biotechnology regulation website. The purpose of the website is to have comprehensive information from all three agencies in the collaboration that are required to oversee agriculture biotechnology products. The launch is part of the U.S. Coordinated Framework for Biotechnology Products, a federal regulatory policy meant to improve transparency, predictability, coordination and efficiency of the biotechnology regulatory system.

Find the new website here.

Proposed Regulations/Guidance

CMS: 2021 Medicare Advantage Advance Notice Part I – Risk Adjustment

On Jan. 6, the Centers for Medicare and Medicaid Services (CMS) released Part I of the 2021 Advance Notice of Methodological Changes for Medicare Advantage Capitation Rates and Part C and Part D Payment Policies (the Advance Notice), which contains key information about proposed updates to the Part C CMS-Hierarchical Condition Categories (HCC) risk adjustment model and the use of encounter data.

Part 1 of the 2021 Advance Notice of Methodological Changes for Medicare Advantage Capitation Rates and Part C and Part D Payment Policies proposes changes to the Part C risk adjustment model and the use of encounter data. Under the proposal, CMS proposes to calculate risk scores for 2021 by using the sum of 75 percent of the risk score calculated with the 2020 CMS-Hierarchical Condition Categories model and 25 percent of the risk score calculated with the 2017 version of the model. For 2020, CMS calculated risk scores using the sum of 50 percent of each model.

CMS also proposed changes to how it uses encounter data, or diagnostic information, in the risk adjustment calculation process. For 2021, CMS wants to calculate risk scores for Medicare Advantage plans by summing 75 percent of the encounter data-based risk score with 25 percent of the Risk Adjustment Processing System-based risk score. For 2020, CMS calculated risk scores using the sum of 50 percent of each type of data.

Find the proposed rule here. Public comments are due by March 6, 2020.

CMS and HRSA: Two Proposed Rules for Organ Procurement Organizations (OPOs)

On Dec. 17, two rules were proposed related to organ procurement organizations (OPOs), specifically on performance standards and the promotion of donations from living donors.

The first rule, by the Centers for Medicare and Medicaid Services (CMS), holds OPOs accountable for meeting specific performance metrics. The rule uses federal death records, which show the entire pool of potential organ donors, to calculate an OPO’s donation and transplantation rates. In addition, the proposed rule would require all OPOs to meet the donation and transplantation rates of the current top 25 percent of OPOs. CMS will be able to rank the OPOs based on their performance and make that data public, assessing them annually through a re-certification cycle.

Find the CMS rule here.

Public comments are due by Feb. 21, 2020.

The second rule, by the Health Resources and Services Administration (HRSA), attempts to eliminate financial burden on living donors. The proposed rule would allow insurers to reimburse living donors for lost wages, as well as any child care or elder care expenses they incurred during their hospitalizations for or recoveries from the donation.

Find the HRSA rule here.

Public comments are due by Feb. 18, 2020.

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

FDA and HHS: Proposed Rule on Canadian Drug Importation Plan

On Dec. 18, the Food and Drug Administration (FDA) and the Department of Health and Human Services (HHS) released a draft guidance on the importation of certain prescription drug imports from Canada, leaving out many specialty medications and other therapies for chronic disease that cost patients the most. The FDA seeks request for comment on two importation pathways. One would allow states to submit proposals to the FDA to allow the importation of small molecule brand-name medicines sold at retail pharmacies, typically ones that have rebates attached to them. The draft guidance for industry lets manufacturers import the same versions of FDA-approved drugs they now sell in foreign countries. Under this second pathway, drug manufacturers would use a new National Drug Code (NDC) and sell these drugs in the U.S. at a cheaper price.

Find the proposed rule here.

Find the guidance for industry here—comments are due by March 5, 2020.


Medicaid and CHIP Payment and Access Commission (MACPAC) January 2020 Meeting

The Medicaid and CHIP Payment and Access Commission (MACPAC) will hold its first meeting of 2020 on Jan. 23-24 at the Ronald Reagan Building and International Trade Center in Washington, D.C.

Find the MACPAC meeting agenda here.


Find a comprehensive look at “Courts and Healthcare Policy in 2020” here.

Supreme Court to Review Exemptions to Birth Control Mandate

On Jan. 17, the U.S. Supreme Court announced it will consider the legality of religious and moral exemptions from the Affordable Care Act’s (ACA) requirement for employer health plans to cover birth control. The move is a response to the Third Circuit’s affirmation of a nationwide injunction blocking far-reaching exemptions that were created by the Trump administration and allow almost any employer to avoid complying with the ACA’s contraception mandate. The administration and prominent Catholic charity Little Sisters of the Poor sought the Supreme Court’s review. The case involves challenges brought against the exemptions by the attorneys general of New Jersey and Pennsylvania.

Appeals Court Questions CMS on Rule Requiring Drug Prices in TV Advertisements

On Jan. 13, a panel from the Court of Appeals for the D.C. Circuit questioned the Centers for Medicare and Medicaid Services’ (CMS) attempt to require that drug manufacturers include list prices in television advertisements. The panel suggested that the rule could lead to confusion by consumers without doing much to lower prices of drugs. All three members of the appeals court panel were skeptical about the validity of CMS’ requirement to include the drug’s list price in direct-to-consumer advertising. The requirement would only apply to drugs that cost at least $35 a month and are covered by Medicaid and Medicare.

Plaintiffs and Trump Administration Ask Supreme Court to Delay Hearing ACA Case before the 2020 Election

On Jan. 10, the U.S. Supreme Court asked the Trump administration and plaintiffs challenging the Affordable Care Act’s (ACA) constitutionality to respond to a request from state Democratic attorneys to expedite the court’s review of the case by this coming summer. The request occurred after a federal appeals court ruled that the ACA’s individual mandate was unconstitutional, yet sent the case back to a federal judge in Texas, who presided over the original Texas v. Azar case, to clarify what part, or if all, of the law is unconstitutional. The decision would ultimately delay a resolution until next year, unless the request is granted for the Supreme Court to intervene now.

Find the plaintiffs’ and Trump administration’s response here.

Trump Administration Files Emergency Appeal on Public Charge Rule

On Jan. 13, the administration filed an emergency appeal with the U.S. Supreme Court to lift the remaining lower court injunction that is currently preventing the government from enforcing the public charge rule.

The request comes one week after a three-judge panel for the Second Circuit upheld a lower court injunction preventing the government from implementing the rule on a nationwide basis. Angered by the decision, the government decided to appeal and bring the matter to the U.S. Supreme Court, urging the Court to side with the president and allow the rule to go into effect while a decision in the New York lawsuit is reached on the merits.

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