Washington Healthcare Update

January 27, 2020

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This week in Washington: Both the House and Senate are back in session.

Upcoming Hearings/Markups




The Senate spent all of last week in impeachment trial proceedings.


Proposed Regulations/Guidance

Final Regulations/Guidance



Upcoming Hearings/Markups

Tuesday, January 28, 2020

House Committee on the Judiciary: “Fentanyl Analogues: Perspectives on Classwide Scheduling”

The Subcommittee on Crime, Terrorism, and Homeland Security on Judiciary will hold a hearing on the fentanyl crisis, and the wider discussion of prescription drug scheduling practices. Find more details on the hearing as they become available here.

House Education and Labor Committee: “Expecting More: Addressing America’s Maternal and Infant Health Crisis”

The Subcommittee on Health, Employment, Labor and Pensions, and the Workforce Protections subcommittee on Education and Labor will hold a hearing on the current maternal and infant mortality crisis. Find more details on the hearing as they become available here.

Wednesday, January 29, 2020

House Committee on Energy and Commerce: “Improving Safety and Transparency in America’s Food and Drugs”

The Subcommittee on Health of the Committee on Energy and Commerce will hold a legislative hearing to discuss health and safety concerns in food and drug consumption. Find more details on the hearing as they become available here.

Senate Special Committee on Aging: “That’s Not the Government Calling: Protecting Seniors from the Social Security Impersonation Scam”

The Senate Special Committee on Aging will hold a hearing on government impersonation scams aimed at American seniors. Witnesses include victims and the commissioner, and other representatives, of the Social Security Administration (SSA). Find more details on the hearing as they become available here.

Wednesday, February 5, 2020

House Committee on Energy and Commerce: Untitled Hearing on E-Cigarettes

The Subcommittee on Oversight and Investigations of the Committee on Energy and Commerce will hold a hearing with executives from five e-cigarette manufacturers serving as witnesses. The executives of Juul, Fontem, Japan Tobacco International, NJOY and Reynolds American are expected to testify about their marketing strategies and the public health effects of vaping.


Energy and Commerce Asks FDA Commissioner for Details on Complex Generic Drugs

On Jan. 17, the House Committee on Energy and Commerce Chairman Frank Pallone (D-NJ), ranking member Greg Walden (R-OR), health subcommittee Chairwoman Anna Eshoo (D-CA) and ranking member Michael Burgess (R-TX) as well as oversight subcommittee Chairwoman Diana DeGette (D-CO) and oversight ranking member Brett Guthrie (R-KY) sent a letter to FDA Commissioner Stephen Hahn to detail efforts to expand approval of complex generic drugs. The letter noted that despite record Food and Drug Administration (FDA) generic drug approvals, many expensive brand-name drugs lack substitutes. The members added that approvals for complex drugs for conditions like multiple sclerosis, schizophrenia, metastatic breast cancer, osteoporosis and chronic obstructive pulmonary disease were lagging. The primary purpose of the request is to figure out whether Congress needs to confer more authority to improve the approval process.

Find the letter here.


Surgeon General: Unclear Whether E-Cigarettes Help Smokers Quit

On Jan. 23, U.S. Surgeon General Jerome Adams said in a report on smoking cessation that not enough evidence exists to determine whether e-cigarettes help smokers quit or ultimately improve public health. In the 34th report on the topic from the Office of the Surgeon General (OSG), it is noted that the increasing availability of e-cigarettes and their popularity among teens “raise questions about the potential impact that such products could have on efforts to eliminate disease and death caused by tobacco use.” In addition, because e-cigarettes are “a continually changing and diverse group of products,” it is also difficult to generalize about how useful they can be for smokers trying to quit traditional cigarettes.

Find the full report 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. Public comments are due by Jan. 29, 2020.

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.

Final Regulations/Guidance

HHS Final Rule: Modification of the Requirements for the Use of Health Insurance Portability and Accountability Act of 1996 (HIPAA) National Council for Prescription Drug Programs (NCPDP) D.0 Standard

On Jan. 24, the Department of Health and Human Services (HHS) finalized the modified requirements for use of the National Council for Prescription Drug Programs (NCPDP) Telecommunication Standard Implementation Guide. This modification enables covered entities to clearly distinguish in a HIPAA retail pharmacy transaction if a prescription is a “partial fill” where less than the full amount prescribed is dispensed under the Comprehensive Addiction and Recovery Act (CARA) provision. This is a modification to ensure information is available to help prevent impermissible refills of Schedule II drugs and to yield better data for researchers to enhance understanding of prescribing trends. 

Find the final rule here.


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

Supreme Court Will Not Fast Track ACA Constitutionality Case

On Jan. 21, the Supreme Court rejected a requested from Democratic attorneys general to immediately review a lawsuit threatening the Affordable Care Act (ACA), siding with the plaintiffs and the Trump administration. 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.

The Supreme Court’s response said the justices would not take up the case in an unusually rapid order, and it did not rule out full review of the case at a later date. The outcome means the case will likely not be resolved until after the 2020 election.


GAO: Opioid Use Disorder — Barriers to Medicaid Beneficiaries’ Access to Treatment Medications

On Jan. 24, the Government Accountability Office (GAO) released a report on state policies that can restrict Medicaid beneficiaries’ access to medication-assisted treatments of opioid use disorders and overdoses. The treatments combine medications such as buprenorphine with behavioral therapy, and Medicaid is one of the largest sources of coverage for individuals undergoing medication-assisted treatment.

GAO recommends:

  • The administrator of CMS determine the extent to which state Medicaid programs are in compliance with federal requirements to cover MAT medications in all formats and take actions to ensure compliance, as appropriate.

Find the full report here.

GAO: Artificial Intelligence in Health Care — Benefits and Challenges of Machine Learning in Drug Development

On Jan. 21, the Government Accountability Office (GAO) released a report on machine learning to reduce the time and cost for drug manufacturers spending 10 to 15 years bringing a drug to market. The method finds new insights in large biomedical or health-related data sets, and is already used throughout drug development, from discovery to clinical trials. Experts say further advances could be transformative.

GAO identified several challenges that hinder the adoption and impact of machine learning in drug development: Gaps in research in biology, chemistry and machine learning limit the understanding of and impact in this area. A shortage of high-quality data, which is required for machine learning to be effective, is another challenge. Accessing and sharing this data is also difficult, due to costs, legal issues and a lack of incentives for sharing. Furthermore, a low supply of skilled and interdisciplinary workers creates hiring and retention challenges for drug companies. Lastly, uncertainty about potential regulation of machine learning used in drug development may limit investment in this field.

GAO developed six policy options in response to these challenges. Five policy options are centered on research, data access, standardization, human capital and regulatory certainty. The last is the status quo, whereby policymakers—federal agencies, state and local governments, academic and research institutions, and industry, among others—would not intervene with current efforts.

Find the policy options here.

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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