Washington Healthcare Update

June 4, 2018

Pardon Our Dust

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This Week: When Congress returns from its Memorial Day recess, it faces a countdown toward the midterm elections with much to get done.

1. Congress

Senate

2. Administration

3. Reports

1. Congress

Senate

Senate To-Do List

In a series of interviews during the recess week, Senate Majority Leader Mitch McConnell has described what he expects the Senate to act on. 

Appropriations: McConnell confirmed that appropriations bills need to be done before the end of the year and that there is broad agreement across party lines to get the bills done. 

McConnell outlined three top priorities: (1) the farm bill; (2) the National Defense Authorization Act; and (3) the Water Resources Development Act.

When the Senate returns from the Memorial Day recess, there is one recess for the week of the 4th of July before senators are scheduled to leave Friday, Aug. 3. However, the majority leader has said he wants to keep senators in during August to address the backlog of judicial nominations. After August, the Senate is in session only eight weeks before the midterm elections.  

Sen. Cassidy Releases White Paper on Health Reform

Sen. Bill Cassidy (R-LA) released a health reform white paper on May 29. In that white paper he argues for a cutback in regulation and increasing competition to end health care monopolies. The plan recommends allowing Medicare and Medicaid beneficiaries to use health savings accounts. The paper includes Affordable Care Act reforms and drug-pricing measures.

Cassidy suggests HHS study monopolies within the health care system by geographic area and type of service. He adds that current pay policies are exacerbating monopolies by giving physicians incentives to sell their practices to hospitals and by discouraging lower-cost care settings from expanding or entering a market.

Cassidy also recommends lawmakers promote lower-cost settings of care by allowing greater use of ambulatory surgery centers, free-standing emergency rooms, rural emergency centers and physician-owned hospitals. The white paper says another way to save costs is to increase the use of telemedicine.

In addition, Cassidy’s white paper includes proposals to let states combine Medicaid expansion and exchange funds into one risk pool and to eliminate the Medicaid exclusion on stays in institutions of mental diseases (IMDs).

Read the white paper. 

CBO Disagrees With OMB on Generic Proposal

The Congressional Budget Office believes the president’s proposal to eliminate low-income beneficiaries’ cost sharing for generic drugs would cost more than $18 billion over 10 years, despite the fact that the White House Office of Management and Budget previously said the proposal would be nearly budget neutral.

The president’s fiscal 2019 budget proposed eliminating cost sharing for generics and biosimilars for the low-income subsidy population. OMB scored the idea as saving $210 million over 10 years, while CBO’s newly released score says the idea would cost $18.7 billion over the same period.

Also of interest is that CBO did not comment on the impacts of a number of other drug-pricing ideas in the president’s budget because CBO says they did not have enough detail to score the proposals. These proposals include moving certain drugs from Part B to Part D and eliminating so-called parking of 180-day first filer generic exclusivity.

2. Administration

VA Acting Secretary Named

Veterans Affairs official Peter O’Rourke will serve as acting secretary while the previous one, Robert Wilkie, goes through the nomination process to permanently lead the department. O’Rourke, who previously served as chief of staff for the agency and as its executive director for the Office of Accountability and Whistleblower Protection, took on the role effective Tuesday.

CMS Announces Restart of Home Health Demonstration

CMS announced in a notice on May 29 that it plans to restart a revised version of a home health demonstration that it stopped just over a year ago following concerns from beneficiary advocates as well as home health providers. The advocates and providers were concerned that the demo found more paperwork errors than fraud. CMS’s announcement follows the Government Accountability Office recommendation that CMS restart the pre-claim review program.

CMS proposes cutting reimbursement by 25 percent to providers in demonstration states that don’t submit all claims for either pre- or post-pay review, according to a May 29 information collection request. After providers establish a good track record, they wouldn’t have to submit all claims. The previous version of the demo didn’t give providers the option of post-pay reviews.

“These providers will continue to be subject to a review method until the HHA reaches the target affirmation or claim approval rate,” the notice states. “Once an HHA reaches the target pre-claim review affirmation or post-payment review claim approval rate, it may choose to be relieved from claim reviews, except for a spot check of their claims to ensure continued compliance.” Providers that don’t submit claims might be subject to Recovery Audit Contractor reviews in addition to the 25 percent pay cuts, the notice says.

CMS proposes running the revised demonstration in Illinois (where the initial pre-claim review program was tested), Ohio, North Carolina, Florida and Texas. The program could be expanded to other states. Stakeholders will have 60 days to comment on the agency’s proposal once it is published in the Federal Register.

CMS Blasted by Seventeen Attorneys General on SNF Oversight Rollback

Attorneys general from 17 states on May 30 blasted the Trump administration’s effort to reduce federal oversight of nursing homes. The AGs, led by California Attorney General Xavier Becerra, wrote to HHS Secretary Alex Azar and CMS Administrator Seema Verma that they are worried by what they view as a regulatory rollback. The AGs say the moves could harm Medicare and Medicaid beneficiaries and make it harder for states to investigate and prosecute grievances, violations and crimes in nursing homes. Nursing homes, however, say the AGs are mischaracterizing CMS’s policies.

Last November, CMS provided nursing homes with an 18-month enforcement delay in relation to the second phase of a series of Medicare and Medicaid conditions of participation requirements. Under the delay, facilities that don’t meet the requirements will be asked to invest in staff education instead of being fined. CMS issued guidance to change how civil monetary penalties are levied against nursing homes that are not in compliance with requirements. In addition, last May, the Trump administration asked for ideas on ways to reduce the regulatory burden on long-term care facilities, and CMS’s unified agenda includes a rule on promoting efficiency, transparency and burden reduction in the requirements for those facilities. The unified agenda says the proposed rule is expected in June.

The AGs are concerned about the administration’s delay in enforcement of requirements that nursing homes must meet to participate in Medicare and Medicaid, and said in a statement they are proactively raising these concerns in advance of CMS rulemaking, likely in June, that is expected to propose doing away with some requirements deemed burdensome to nursing homes.

The AGs say the penalties are an essential tool for regulators to make sure nursing homes are complying with the requirements, and they also act as a deterrent for abusive behavior. Weakening or delaying the penalties’ application hurts states’ ability to punish bad actors, the letter says.

The AGs also argue that the quality of care at nursing homes can be “shockingly low,” pointing to a Kaiser Family Foundation study that found only 6.5 percent of long-term care facilities nationwide had no deficiencies in 2016. The letter notes an HHS Office of Inspector General report from last August found CMS has inadequate procedures to ensure proper identification and reporting of potential incidents of abuse or neglect of Medicare beneficiaries in nursing homes.

FDA Hosts Innovation Challenge on Opioids

FDA plans to collaborate with selected companies developing products that could address the opioid crisis, potentially speeding up the review process, the agency announced May 30. . FDA is hosting an innovation challenge seeking technology that could detect, treat and prevent addiction and withdrawal; stop the diversion of opioids; or eliminate the need for certain opioids. It is accepting proposals through the end of September.

FDA Releases Draft REMS Guidance

The FDA on May 31 issued a pair of draft guidance documents aimed at helping get more generic drugs with safety restrictions onto the market faster, part of the administration’s plan to lower prices. 

One guidance outlines the process in which brand and generic drug manufacturers must share a risk evaluation and mitigation strategies that the FDA places on certain drugs whose safety monitoring is mandatory. Generics are required to carry the same REMS as the branded drug. Reaching a deal on a so-called shared REMS has been a tool used by brand drug companies to delay generic equivalents.

A second guidance outlines when and how the FDA will consider waivers from required single shared REMS, and how generic drug manufacturers can request the waivers. The FDA will waive the requirement if the generic’s REMS is different but comparable to that for the brand if the burden for a single REMS outweighs the benefit or an aspect of the REMS is covered by a patent or trade secret.

HHS Pain Management Task Force Has First Meeting

A new federal pain management task force mandated by the Comprehensive Addiction and Recovery Act kicked off its inaugural meeting in Washington, May 31. The Pain Management Task Force is charged with proposing best practices and issuing recommendations to address gaps in managing chronic and acute pain. HHS Assistant Secretary for Health Brett Giroir said the task force is crucial to making sure those who need pain treatment can still obtain it as federal and state policymakers limit prescription painkillers to combat the opioid crisis.

Right-to-Try Legislation Signed into Law

On May 30, President Donald Trump signed legislation known as “the Right to Try,” which is to help patients receive experimental medicines not yet approved by the Food and Drug Administration (FDA). 

A program known as compassionate use has been available since the 1970s. It allows patients with a serious disease or condition to obtain experimental medicines; the Food and Drug Administration says it authorizes 99 percent of the requests for expanded access that it receives.

The new law allows patients and doctors to ask drug companies directly for access to the experimental drugs, rather than wait for approval by the FDA.

Employers Ask Administration to Stop Enforcing Employer Mandate

Several business groups wrote to Treasury and HHS on May 30, accusing the Trump administration of using an “unlawful and deeply flawed process” to administer fines for violating Obamacare’s employer mandate and called on the IRS to suspend the penalties.

The letter states that employers didn’t get any notice when their workers accessed the Obamacare exchanges in 2015. The health care law requires businesses get timely notification that employees are accessing tax credits, to give employers enough time to provide coverage if they want to avoid the fines.

The IRS didn’t start sending out fines for 2015 noncompliance until late last year. Acting IRS Commissioner David Kautter told a House committee last month that the agency had sent about 10,000 enforcement letters and that more than 80 percent have been resolved with the businesses owing nothing.

An employer that didn’t offer health coverage in 2015 faced a fine of $2,080 per full-time employee after the first 30 employees. A second kind of fine is levied to employers who offer coverage that isn’t deemed affordable enough.

The employer groups have been in lengthy debate with the IRS about the penalties. The letter today—which makes several allegations of “unlawful” behavior—is an escalation of those discussions.

Rule for New Short-Term Health Plans and Association Health Plans Coming

President Donald Trump announced that HHS Secretary Alex Azar and Labor Secretary Alex Acosta will release new health care plans in the next four weeks, referring to upcoming rules on association health plans (AHPs) and short-term health plans. The rule on AHPs will be out in two weeks and the short-term plan rule will be out in the next four weeks, Trump said during two separate appearances this week.

The proposed rule on AHPs was sent to OMB on May 9. If finalized, the rule would loosen the definition of an employer under ERISA to encourage creation of AHPs that could cover workers from various industries and include sole proprietors and their dependents.

Democratic Governors Threaten to Sue Over Proposed Title X Changes

Fourteen Democratic governors on May 31, in a letter to HHS Secretary Alex Azar, threatened to sue the Trump administration if it finalizes sweeping changes to the federal family planning grants program that would effectively eliminate funding for clinics that provide or simply refer patients elsewhere for abortions, including Planned Parenthood. The governors wrote that  HHS should reconsider its Title X plan, which they say is “dangerous” and “poses serious risks to women’s health.”

“If this reckless policy is finalized as written, we will have no choice but to explore all possible avenues, including legal options, to block it from harming the women in our states,” they write.

Governors from Colorado, Connecticut, Delaware, Hawaii, Minnesota, Montana, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Virginia and Washington signed the letter.

3. Reports

GAO-18-380 VA Health Care: Progress Made Toward Improving Opioid Safety, But Further Efforts to Assess Progress and Reduce Risk Are Needed May 29, 2018

This report examines the progress the progress the Veterans Health Administration (VHA) has made improving opioid safety through its Opioid Safety Initiative (OSI). Since the OSI began, VHA has seen reductions in opioid prescribing rates. For example, from the fourth quarter of fiscal year 2013 to the first quarter of fiscal year 2018, the percentage of patients dispensed an opioid decreased from about 17 percent to about 10 percent, or by about 267,000 veterans. Also, available evidence suggests VHA has accomplished six of nine OSI goals established in 2014; however, it is unclear whether the remaining three goals have been fully met. For example, in the case of OSI goal four (establishing safe and effective regional tapering programs for patients on opioids and benzodiazepines), GAO found that VHA lacked documentation that its regional networks established these programs.

GAO found several factors that may have contributed to inconsistent adherence to key opioid risk mitigation strategies at the selected VHA facilities. For example, four of the five selected facilities did not have a pain champion (a primary care position required by VHA that can help providers adhere to opioid risk mitigation strategies), and not all facilities had access to academic detailing, a program in which trained clinical pharmacists work one-on-one with providers to better inform them about evidence-based care related to the appropriate treatment of relevant medical conditions. In addition, three of the five facilities did not consistently review veterans’ medical records to ensure provider adherence to these strategies.

If you have any questions, contact the following individual atMcGuireWoods Consulting:

StephanieKennan, Senior Vice President

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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