Washington Healthcare Update

February 10, 2020

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This week in Washington: Senate to hold hearing on home healthcare in rural America, House to hold hearing on protecting women’s access to reproductive healthcare.

Upcoming Hearings/Markups






Proposed Regulations/Guidance

Final Regulations/Guidance




Upcoming Hearings/Markups

Wednesday, February 12, 2020

Senate Committee on Aging: “There’s No Place Like Home: Home Health Care in Rural America”

The Senate Committee on Aging will hold a hearing on rural health care concerns, featuring a panel of witnesses to discuss home care and hospice care. Find more details on the hearing as they become available here.

House Committee on Energy and Commerce, Subcommittee on Health: “Protecting Women’s Access to Reproductive Health Care”

The Subcommittee on Health of the Committee on Energy and Commerce will hold a legislative hearing to discuss H.R. 2975, the Women’s Health Protection Act of 2019. Find more details on the hearing as they become available here.


House Committee on Energy and Commerce, Subcommittee on Oversight and Investigation: “Vaping in America: E-Cigarette Manufacturers’ Impact on Public Health”

Wednesday, February 5: The Subcommittee on Oversight and Investigations of the Committee on Energy and Commerce held a hearing with executives from five e-cigarette manufacturers serving as witnesses. The executives of Juul, Fontem, Japan Tobacco International, NJOY and Reynolds American testified about marketing strategies and the public health effects of vaping.

Why this is important: The witnesses testified a day before FDA’s partial ban on unapproved flavored cartridge-based electronic nicotine delivery system (ENDS) products went into effect. Together, the companies represent approximately 97 percent of the U.S. e-cigarette market. Juul holds more than two-thirds of the yearly market share, followed by Reynolds, NJOY, Fontem and Japan Tobacco International.

Find more details on the hearing here.

House Ways and Means Committee, Subcommittee on Health: “More Cures for More Patients: Overcoming Pharmaceutical Barriers”

Wednesday, February 5: The Subcommittee on Health of the House Ways and Means Committee held a hearing on pharmaceutical barriers to patient treatment.

Why this is important: The subcommittee is investigating pharmaceutical tax write-offs, including charitable donations, the financial benefits of certain drug approval pathways and how the 2017 tax law affected drug prices.

Find more details on the hearing here.


House Oversight Again to Hold Hearing on Trump Administration’s 2020 Opioid Strategy

On Feb. 4, the House Oversight and Reform Committee announced it will hold a hearing later this month to further investigate the Trump administration’s national drug strategy, released by the White House Office of National Drug Control Policy (ONDCP) on the same day.

The strategy itself features a number of specific goals to tackle the opioid crisis, including: reducing the number of overdose deaths by 15 percent by 2022; reducing illicit drug use among teens; increasing provider education on best opioid practices; reducing opioid prescriptions; and reducing the production and presence of drugs other than opioids, including cocaine, in other countries. State officials recently told Congress that non-opioid drug use, including cocaine use, was gaining traction in their states and they called for flexibility to use federal funds to address them. The strategy also seeks to double the number of facilities that offer medication-assisted treatment by 2022, as well as increase the number of federal health workers certified to administer and prescribe buprenorphine from 4 percent to 10 percent by 2022.

Find the ONDCP strategy here.


President Trump Acquitted by Senate in Impeachment Trial

On Feb. 5, the Senate voted to acquit President Trump 52-48 on charges of abuse of power and 53-47 on obstruction of Congress. Trump was therefore found not guilty, concluding the impeachment trial.


President Trump Asks for Bipartisan Drug Pricing Legislation

On Feb. 4, President Trump used the State of the Union address to urge Congress to pass bipartisan legislation to lower prescription drug prices, without outwardly supporting the leading plan in the Senate. Republican Senate Finance Committee Chairman Chuck Grassley (R-IA) and Ranking Member Ron Wyden’s (D-OR) bipartisan bill, S. 2543, has stalled without the backing of Senate Majority Leader Mitch McConnell.

FDA, FTC Collaborate to End Biosimilars Misinformation and Increase Competition

On Feb. 3, the Food and Drug Administration (FDA) and the Federal Trade Commission (FTC) announced a collaboration to advance biosimilars adoption, discourage false or misleading communications about biosimilars and deter anticompetitive behaviors.

To begin, a public meeting will be held on March 9, 2020, for input on how to increase competition for biological products.

Find the statement here.

Proposed Regulations/Guidance

CMS: Basic Health Program Funding Methodology Proposed Payment Notice for Program Year 2021

On Feb. 10, the Centers for Medicare and Medicaid Services (CMS) published the Basic Health Program proposed federal funding methodology for program year 2021. This document provides the methodology and data sources necessary to determine federal payment amounts for program year 2021 to states that elect to establish a Basic Health Program to offer health benefits coverage to low-income individuals otherwise eligible to purchase coverage through Affordable Insurance Exchanges.

Find the proposed rule here. Public comments are due by March 11, 2020.

CMS: 2021 Medicare Advantage and Part D Advance Notice Part II

On Feb. 5, the Centers for Medicare and Medicaid Services (CMS) released Part II of the Calendar Year (CY) 2021 Advance Notice of Methodological Changes for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies (the Advance Notice). CMS released Part I of the Advance Notice on Jan. 6, 2020. The notice is seeking comment on whether it should develop measures of generic and biosimilar utilization that could be used to calculate a plan’s star rating, so CMS could reward plans that encourage adoption of lower-cost products.

Find the notice here.

CMS will accept comments on all proposals in the Advance Notice through March 6, 2020, before publishing the final Rate Announcement by April 6, 2020.

CMS: Contract Year 2021 and 2022 Medicare Advantage and Part D

On Feb. 5, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule that updates Medicare Advantage (MA or Part C) and the Medicare prescription drug benefit (Part D) program. Medicare Part D plans will be allowed to offer two specialty tiers on their drug formularies starting in 2021. The proposed rule requires that one of the two specialty tiers be a “preferred” tier that offers lower cost sharing for beneficiaries. The maximum allowed cost sharing for the specialty tiers would be between 25 percent and 33 percent, depending on whether the plan includes a deductible.

Drugs that cost $670 a month or more must currently be placed on one specialty tier. Allowing two tier options should give health plans leverage to work with drug manufacturers to get prices lower if the manufacturer wants to price their product at a more accessible cost to patients compared with their competitors. The proposed rule also requires Part D plans to implement by Jan. 1, 2022, a tool that will provide beneficiaries with real-time details on the cost of drugs based on their plan coverage and alternatives.

Find the proposed rule here. The rule will be published in the Federal Register on Feb. 18, 2020.

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: Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2021

On Jan. 31, the Centers for Medicare and Medicaid Services (CMS) released the proposed annual Notice of Benefit and Payment Parameters Rule for 2021, also known as the proposed 2021 Payment Notice. This is the second year in a row that the proposed rule has been late. 

CMS proposes to maintain the Federally Facilitated Exchange (FFE) user fee rate of 3.0 percent of premium, and the State-based Exchange on the Federal Platform (SBE-FP) user fee rate of 2.5 percent of premium based on the portion of FFE user fee-eligible costs allocated to SBE-FP activities. Alternatively, CMS is considering and seeking comment on reducing the FFE and SBE-FP user fee rate below the 2020 plan year level to reflect estimates of premium increases and enrollment decreases for the 2021 plan year, as well as potential savings resulting from cost-saving measures implemented over the last several years in hopes of reducing the user fee burden on consumers and creating downward pressure on premiums.

CMS is proposing changes to the policy regarding how drug manufacturer coupons accrue towards the annual limitation on cost sharing in response to stakeholder feedback indicating Treatment of Drug Manufacturer Coupons. CMS is proposing to amend current Medical Loss Ratio (MLR) regulations to require issuers to deduct from incurred claims the prescription drug rebates and other price concessions attributable to the issuer’s enrollees and received and retained by an entity providing pharmacy benefit management services to the issuer. CMS also proposes to clarify more generally that issuers must report expenses for services outsourced to or provided by other entities in the same manner as issuers’ expenses for non-outsourced services. These changes would help lower premiums by helping ensure that consumers’ premiums reflect the full benefit of prescription drug rebates and are not artificially inflated by outsourcing expenses.

Find the proposed rule here.

CMS: Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2020

On Jan. 17, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule for plans sold on the Health Insurance Marketplaces for the 2020 benefit year. The proposed rule sets forth payment parameters and provisions related to the risk adjustment and risk adjustment data validation programs, cost-sharing parameters and user fees for Federally Facilitated Exchanges (FFEs) and State-based Exchanges on the Federal Platform (SBE-FPs). It proposes changes that would allow greater flexibility related to the duties and training requirements for the Navigator program and proposes changes that would provide greater flexibility for direct enrollment entities, while strengthening program integrity oversight over those entities. It proposes policies that are intended to reduce the costs of prescription drugs. It includes proposed changes to Exchange standards related to eligibility and enrollment, exemptions and other related topics.

Find the proposed rule here.

Public comments are due by Feb. 19, 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.

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 diseases 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

FDA: Nutrition Labeling Compliance Guide for Small Businesses

On Feb. 3, the Food and Drug Administration (FDA) issued a compliance guidance for small businesses on following the 2018 nutrition and supplement facts labeling rule issued by the FDA. The guidance explains how businesses generating less than $10 million can adhere to the new recordkeeping and formatting requirements that were established by the rule, how the nutrient values have been updated and why complying with the new rule is mandatory.

Find the compliance guidance here.


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

SCOTUS Will Decide Feb. 21 Whether to Review ACA Case

The Supreme Court will decide whether it will hear Texas v. United States, the case claiming that the Affordable Care Act’s (ACA) individual mandate is unconstitutional and therefore the entire law may be unconstitutional, on Feb. 21. The Supreme Court already denied a request from defendants of the law to fast track the case.


Former FDA Commissioner: Senate Finance Bill’s Inflation Rebates Would Spur Higher List Prices

On Feb. 4, former Food and Drug Administration (FDA) Commissioner Scott Gottlieb criticized the Senate Finance Committee drug-pricing bill’s (S.2543) inflationary rebate policy, arguing that patients who pay a drug’s full list price or those whose drug costs are tied to the list price will pay more if Congress imposes inflation caps on drug prices. He added that the inflationary cap could incentivize drug manufacturers to take a small price increase every year, even in situations where they might have otherwise held prices flat.


GAO: Drug Development – FDA’s Priority Review Voucher Programs

On Jan. 31, the Government Accountability Office (GAO) released a report on priority review vouchers (PRV) given by the Food and Drug Administration (FDA) to drug manufacturers that develop drugs to treat certain tropical diseases, rare pediatric diseases and illnesses related to public health emergencies, which are not necessarily profitable. Drug manufacturers can redeem a voucher to speed up FDA review of a future, potentially more profitable, drug. Vouchers can also be sold to other manufacturers.

All seven drug sponsors GAO spoke with stated that PRVs were a factor in drug development decisions. Six sponsors said they were one of a number of factors, while one sponsor said they were pivotal in its development of a drug.

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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