The following LPG Weekly Healthcare Watch provides a summary update of legislative and regulatory healthcare activities from February 23 – March 1.  Where available, hyperlinks are included to the relevant documents. Please let us know if you have any questions or would like additional information on the items below. 

LEGISLATIVE UPDATE

  • On February 26, the Congressional Personalized Medicine Caucus held an introductory briefing to educate Congress and the public about the benefits of earlier detection, targeted treatment, and improved prevention strategies in personalized medicine.  The group share the belief that treatments tailored to a patient’s unique biological characteristics should be a larger part of the national conversation about reducing health care costs. When asked how precision medicine could lower costs, co-founder Rep. Eric Swalwell (D-CA) claimed, “a cure is going to cost less than chronic disease.” Rep. Swalwell has already introduced legislation to assess whether Medicaid coverage for genetic and genomic testing could improve clinical outcomes while cutting costs.  Additional founders of the caucus include Rep. Tom Emmer (R-MN), Sen. Tim Scott (R-SC), and Sen. Kyrsten Sinema (D-AZ).

Senate   

  • On February 25, the Appropriations Labor, Health & Human Services (HHS), Education & Related Agencies Subcommittee held a hearing entitled Review of the President’s FY 2021 Budget Request for HHS. Coronavirus was a top point of conversation at the hearing. Chairman Richard Shelby (R-AL) supported increasing federal funds to combat the coronavirus, arguing the Administration’s original request for $2.5 billion would “shortchange the American people.” Subcommittee Chair Roy Blunt (R-MO) claimed Congress was unlikely to sign off on many provisions included in the budget request, including cuts to health care workforce programs, medical research, emergency preparedness programs, and rural health care. Additionally, Chairman Blunt and Sen. Cindy Hyde-Smith (R-MI) pressed HHS Secretary Alex Azar on a new policy issued by the Organ Procurement and Transplantation Network to distribute kidneys on a national basis, rather they regionally. Secretary Azar responded that HHS is barred by statute from changing organ allocation policy. The Secretary was the sole witness.

  • On February 25, the Senate Finance Committee (SFC) sent a letter to Cigna/Express Scripts threatening to issue a subpoena if the company fails to comply with their investigation into how the actions of pharmaceutical benefit managers (PBMs) impact high insulin costs.

  • On February 25, the Senate voted not to pass two abortion-related measures, including:

    S. 160, the Pain-Capable Unborn Child Protection Act, which proposes a ban on abortion after 20 weeks except in cases of rape, incest, and danger to the life of the mother (53-44); and

    S. 311, the Born-Alive Abortion Survivors Protection Act, which would make it a felony for doctors to fail to provide medical care for a child that survives an attempted abortion (56-41).

  • On February 27, Sens. Bill Cassidy (R-LA) and Dick Durbin (D-IL) introduced a bill to extend Medicare Part B coverage of immunosuppressant drugs for kidney transplant patients beyond the existing 36-month statutory limit.

  • On February 27, Sen. Josh Hawley (R-MO) introduced legislation to enhance oversight of global medical device supply chains to deter chances or shortages.  Currently, drug manufacturers are required to notify the Food & Drug Administration (FDA) six months before a product is discontinued; if that is not feasible, then FDA must be made aware as soon as possible. Sen. Hawley’s “Medical Supply Chain Security Act” would extend these notification requirements to medical device manufacturers.

House

  • On February 26, the Energy & Commerce Health Subcommittee held a hearing entitled the FY 2021 HHS Budget and Oversight of the Coronavirus. Subcommittee Chair Anna Eshoo (D-CA) claimed the President’s budget request would weaken America’s health care safety net, while reducing its ability to respond to emergency outbreaks like the coronavirus. Additionally, Chair Eshoo suggested the Administration’s response to the outbreak has been divisive and unorganized.  Rep. Jan Schakowsky (D-IL) asked Secretary Azar if he could guarantee that a coronavirus vaccine, if developed, would be affordable to all patients. The Secretary maintained he could not make such a promise, arguing that price controls would discourage the private investment needed to develop a vaccine.  However, on February 27, Secretary Azar clarified his position and guaranteed that any coronavirus drugs or vaccines developed with the help of government funding will be affordable to all patients.  Witnesses included: Anthony S. Fauci, Director, National Institute for Allergy & Infectious Diseases (NIAID), National Institutes of Health (NIH); Stephen M. Hahn, Commissioner, FDA; Robert Kadlec, Assistant Secretary for Preparedness and Response (ASPR), HHS; and Robert R. Redfield, Director, Centers for Disease Control & Prevention (CDC).

  • On February 26, the Appropriations Departments of Labor, HHS, Education & Related Agencies  Subcommittee held a hearing entitledHHS Budget Request for FY 2021. There was bipartisan agreement that the Administration’s request for $2.5 million in emergency funding to respond to the coronavirus was insufficient. Furthermore, members from both parties criticized the Administration’s suggestion to transfer funds earmarked for Ebola to address the coronavirus epidemic. Secretary Azar reiterated that the Administration is open to negotiate the coronavirus funding package and is not committed to using Ebola funds. Secretary Azar was the sole witness.

  • On February 27, the Appropriations Agriculture, Rural Development, FDA & Related Agencies Subcommittee held a hearing on the HHS Office of Inspector General’s (OIG) role in overseeing the FDA. Subcommittee Chairman Sanford Bishop (D-GA) called the hearing to discuss how OIG has utilized a recent bump in funding, as well as key challenges the Agency faces. Subcommittee Ranking Member Jeff Fortenberry (R-NE) raised concerns with FDA’s oversight of international drug manufacturing, claiming the coronavirus outbreak highlights the need to encourage domestic manufacturing. Sue Murrin, HHS OIG Deputy Inspector General for Evaluation & Inspections, was the sole witness.

  • On February 27, the Foreign Affairs Asian, the Pacific & Nonproliferation Subcommittee held a hearing entitled Coronavirus Disease: the U.S. and International Response. Subcommittee Ami Bera (D-CA) maintained that the U.S. must lead the response effort among the international community. He stressed that policymakers and public health officials should rely on science, not politics, to guide their decisions. Witnesses included: Ian Brownlee, Principal Deputy Assistant Secretary, Bureau of Consular Affairs, State Department; Jonathan Fritz, Deputy Assistant Secretary, Bureau of East Asian & Pacific Affairs, State Department; William A. Walters, Executive Director and Managing Director for Operational Medicine, Bureau of Medical Services, State Department; and Robert Redfield, Director, CDC.

  • On February 27, the Ways & Means Committee held a hearing entitled Proposed FY 2021 Budget Request with HHS Secretary Azar. Chairman Richard Neal (D-MA) claimed it was time the Administration explicitly endorsed a drug pricing proposal so Congress can begin negotiating a final package. Secretary Azar maintained the White House is the “most flexible party in the room” and supports any “passable” proposal that lowers list prices, reduces out-of-pocket costs, and pressures payers to better manage drug spending.  Numerous lawmakers claimed the Administration’s $2.5 billion coronavirus emergency funding is not enough to responsibly manage the crisis. Furthermore, many argued that the President’s proposed cuts to HHS included in his budget request would undermine the response effort. Secretary Azar suggested that the White House proposed such cuts in anticipation of negotiations with Congress, comparing the President’s request to the first move in a chess game. The Secretary also appointed former Kansas Gov. Jeff Colyer as the Chairman of National Advisory Committee on Rural Health & Human Services. Secretary Azar was the sole witness.

  • On February 27, the Appropriations Military Construction, Veterans Affairs & Related Agencies Subcommittee held a hearing entitled Oversight of VA’s Electronic Health Record Modernization (EHRM) Implementation. The VA has requested an addition $1.1 billion for FY 2021 to fund the full implementation of EHRM at seven facilities and to prepare for implementation at an additional 20 sites. Subcommittee Chair Debbie Wasserman Schultz (D-FL) claimed VA officials have not been forthcoming with the Committee about implementation delays and shortcoming thus far. She demanded better communication as the project continues. Witnesses included: Melissa Glynn, Assistant Secretary for Enterprise Integration, VA; Richard Stone, Executive in Charge, Veterans Health Administration; and John H. Windom, Executive Director, Office of EHRM, VA.

  • On February 28, the House voted 213-195 to pass H.R. 2339, the Protecting American Lungs and Reversing the Youth Tobacco Epidemic Act of 2020, which seeks to ban flavored e-cigarette tobacco products (including menthol) and levy an excise tax on e-cigarettes. The narrow margin reflects a wave of last-minute opposition from some Democrats arguing the bill unfairly targets black communities. It remains unclear if the measure will be taken up by the Senate.

  • Staff for the Committees on Education & Labor, Energy & Commerce, and Ways & Means continue to meet with the hopes of reconciling their surprise medical billing legislation with the goal of moving a unified by bill before May 22.

REGULATORY UPDATE

  • On February 24, the Administration’s “public charge” rule went into effect, which allows immigration officials to deny green cards to individuals that are likely to use entitlement programs, such as Medicaid and Social Security. On February 22, the Supreme Court ruled 5-4 to lift Illinois’ statewide injunction, freeing the rule to be implemented across the nation. Justice Sonia Sotomayor dissented that the Supreme Court stepped in too early and should have waited for lower courts to reach a verdict. 

  • On February 24, the 9th Circuit Court of Appeals voted 7-4 to uphold the Trump administration’s Title X family planning rule, which bars clinics funded by Title X from providing abortion referrals or from sharing an office space with an abortion provider.

  • On February 25, New York Gov. Andrew Cuomo (D) announced the Centers for Medicare & Medicaid Services (CMS) will not renew the state’s Deliver System Reform Incentive Program (DSRIP), which launched in 2014. The $8 billion Medicaid-focused program aimed to shift services traditionally furnished in hospitals to community-based settings. Gov. Cuomo claimed the decision marks the Administration’s latest attempt to cut federal funding from the state. 

  • On February 27, the Center for Medicare and Medicaid Innovation (CMMI) announced the selection of 205 applicants to participate in the Emergency Triage, Treat, and Transport (ET3) model that is aimed at keeping Medicare beneficiaries out of emergency rooms when such a visit is not necessary.  CMMI also plans to issue a future notice related to funding for a medical triage line that could be used in counties with demonstration participants to help reduce avoidable patient transports to the emergency room.

  • On February 28, the FDA approved the first generic of Daraprim, the controversial 62 year-old drug that Turing Pharmaceuticals bought in 2015 and increased the list price by 5000% overnight.

CORONAVIRUS UPDATE

  • On February 23, it was reported that the FDA has compiled a list of 150 drugs most at risk of shortage if the coronavirus outbreak worsens.  However, Commissioner Hahn later claimed such reporting was “incorrect information.”  On February 25, he said the FDA is tracking 20 products at the greatest risk of shortage.  On February 27, the FDA confirmed the manufacturer of an unnamed drug reported a drug shortage to the Agency as a result of the outbreak.

  • On February 24, Moderna Inc. sent 500 vials of a potential vaccine to the NIH for animal testing, just 42 days after sequencing the virus’ genome. Human testing is expected to begin in three months.

  • On February 24, the Trump administration submitted a $2.5 billion supplemental budget request to Congress to respond to the epidemic. Their plan includes $1.25 billion in “new” funds, while the rest would be transferred from other priorities, such as Ebola response. On February 25, Senate Democrats released their own $8.5 billion plan. On February 27, Senate Appropriations Chairman Shelby predicted the final figure would surpass $4 billion. Congressional appropriators are aiming to pass an emergency funding measure (likely between $6 billion and $8 billion) prior to the mid-March recess; it remains unclear whether it will be a standalone measure. Appropriators are expected to unveil their deal as soon as March 1.

  • On February 25, National Center for Immunization and Respiratory Diseases (NCIRD) Director Nancy Messonnier claimed a U.S. outbreak is not a matter of if, but when. CDC confirmed the first possible community transmitted case in the U.S. later that day.

  • On February 26, President Trump tapped Vice President Mike Pence to lead the U.S. response effort. On February 27, Vice President Pence named Ambassador Debbie Birx as the “White House Coronavirus Response Coordinator.” Birx will serve as a czar-like figure and hold a seat on the White House’s coronavirus task force, which Secretary Azar will continue to lead. She will report directly to the Vice President. Vice President Pence has also added Commissioner Hahn to the task force.

  • On February 27, Secretary Azar claimed that at least 40 public health laboratories are now able to conduct diagnostic testing and that an addition 53 labs will be able to by March 2.

  • On February 27, the Washington Post reported a whistleblower complaint accusing HHS of sending over a dozen workers to welcome Americans evacuated from Wuhan, China without giving them adequate training and protective equipment. Sen. Ed Markey (D-MA) called for Secretary Azar’s resignation over the complaint. Ways & Mean Chairman Richard Neal has asked Azar for a “complete, immediate” response to the accusation. 

  • On February 27, HHS outlined its plan to transfer $136 million from other federal funds to address the outbreak.

  • On February 28, it was reported that the Administration may invoke special authority under the Defense Production Act to expand manufacturing of materials critical to the coronavirus response, such as face masks.

  • Congressional leaders met over the weekend to discuss an emergency supplemental funding bill to address the coronavirus.  The House is expected to consider such legislation next week. 

RULES AT THE WHITE HOUSE OFFICE OF MANAGEMENT & BUDGET (OMB)

Pending Review

HHS-CMS

  • Conditions for Coverage for End-Stage Renal Disease Facilities—Third Party Payments (CMS-3337-P); Proposed Rule; Received 6/6/2019

  • International Pricing Index Model for Medicare Part B Drugs (CMS-5528-P); Proposed Rule; Received 6/20/2019

  • Medicare Coverage of Innovative Technologies (CMS-3372-P); Received 7/30/2019

  • Medicaid & CHIP Managed Care (CMS-2408-F); Final Rule; Received 9/26/2019

  • Interoperability and Patient Access (CMS-9115-F); Final Rule; Received 9/26/2019

  • Strengthening the Program Integrity of the Medicaid Eligibility Determination Process (CMS-2421-P); Proposed Rule; Received 12/20/2019

  • Establishing Minimum Standards in Medicaid State Drug Utilization Review (DUR) and Supporting Value Based Payments (VBP) for Drugs Covered in Medicaid (CMS-2482-P); Proposed Rule; Received 12/27/19

  • Hospital Inpatient Prospective Payment Systems (IPPS) for Acute Care Hospitals; the Long-Term Care Hospital Prospective Payment System; and FY 2021 Rates (CMS-1735); Proposed Rule; Received 1/30/20

  • Strengthening Oversight of Accrediting Organizations (AO) and Preventing AO Conflict of Interest, and Related Provisions (CMS-3367); Proposed Rule; Received 2/18/20

  • FY 2021 Skilled Nursing Facility (SNFs) Prospective Payment System Rate Update and Quality Reporting Requirements (CMS-1737); Proposed Rule; Received 2/24/20

  • FY 2021 Inpatient Rehabilitation Facility (IRF) Prospective Payment System Rate Update and Quality Reporting Requirements (CMS-1729); Proposed Rule; 2/24/20

HHS-FDA

  • The “Deemed to Be a License” Provision of the Biologics Price Competition and Innovation Act: Questions and Answers; Guidance for Industry; Availability; Notice; Received 2/20/20

  • Competitive Generic Therapies; Guidance for Industry; Availability; Received 2/21/20

HHS-OIG

  • Civil Monetary Penalties Law Notice of Proposed Rulemaking; Proposed Rule; Received 1/23/20

HHS-ONC

  • 21st Century Cures Act: Interoperability, Information Blocking, and the ONC Health IT Certification Program; Final Rule; Received 10/28/2019

HHS-HRSA

  • Reimbursement of Travel and Subsistence Expenses toward Living Organ Donation Program Eligibility Guidelines; Notice; Received 11/8/2019

REPORTS 

Government Accountability Office (GAO)

  • On February 27, GAO published a report entitled Defense Health Care: DOD Surveys Indicate Beneficiary Experience Generally Unchanged in First Year of TRICARE Select. On January 1, 2018, the Department of Defense (DOD) implemented a health plan option “TRICARE Select” for beneficiaries who mostly receive care from civilian providers rather than a managed care plan, “TRICARE Prime.” GAO found no change in the percent of beneficiaries reporting positive outcomes of their TRICARE health care and health plans in the first year of TRICARE Select. However, they did find a 4% increase in the percentage of beneficiaries reporting problems accessing specialty providers.

  • On February 28, GAO published a report entitled Medicare: Information on Medicare-Dependent Hospitals. Under CMS’ Medicare-dependent Hospital (MDH) program, hospitals that have at least 60% inpatient days or discharges from Medicare patients, 100 or fewer beds, and are located in a rural area are eligible to receive additional payment if their historic costs are higher than what the hospital would have otherwise received under the IPPS. GAO found that between FYs 2011-2017, the number of MDHs declined by 28%, the number of MDHs that received an additional payment declined by 15%, and MDHs experienced a 13% decrease in the share of the Medicare revenue coming from impatient services. They also found a 6% decline in Medicare profit margins among MDH participating providers.

HHS Office of Inspector General (OIG)

  • On February 26, OIG published a report entitled Ownership—But Not Physical Movement—of Selected Drugs Can Be Traced Through the Supply Chain. The Drug Supply Chain Security Act (DSCSA) requires trading entities in the drug supply chain to create a record of each drug product transaction; FDA can pull from these records to investigate and identify potentially harmful drug products that may be adulterating the supply chain. OIG found that the ownership of 37 of 44 selected drug products could be traced through the supply chain using DSCSA-required tracing information. However, OIG could not trace the physical locations of drugs for 21 of 44 selected products. They recommend that FDA follow up with entities that are out of compliance with the DSCSA and enhance educational outreach to trading partners about required drug product tracing information. Lastly, they suggest FDA should seek legislative authority to require information about a drug product's physical migration through the supply chain.

  • On February 26, OIG published a report entitled New York Made Unallowable Payments Totaling More Than $10 Million for Managed Care Beneficiaries Assigned Multiple Medicaid Identification Numbers. OIG concludes that New York improperly claimed federal reimbursement for beneficiaries who were assigned more than one Medicaid ID number. Specifically, for 102 of the 103 beneficiaries in their sample, they found that New York made managed care payments to different MCOs for the same beneficiary for the same month under different Medicaid ID numbers. To remedy this pattern, OIG recommends that New York 1) refund $11.3 million to the federal Government; 2) identify and recover improper managed care payments made to different MCOs on behalf of beneficiaries with multiple Medicaid ID numbers before and after their audit period; and 3) strengthen its methods for identifying whether an individual applying for Medicaid has already been issued a Medicaid ID number. 

  • On February 26, OIG published a report entitled New York Claimed Unallowable Federal Reimbursement for Some Medicaid Physician Administered Drugs. OIG found that New York did not invoice manufacturers for rebates associated with $3.3 million (federal share) in single-source and top-20 multiple-source physician administered drugs.  While New York has policies in place that require the collection of utilization data necessary to invoice rebates on all claims, OIG concludes that its internal controls did not ensure that the data were used to invoice manufacturers to secure rebates. They recommend that New York refund the federal government $3.3 million and make procedural reforms.

UPCOMING HEARINGS

Senate

House

  • Veterans’ Affairs Health Oversight Subcommittee

    March 3, 10:00 a.m., 210 House Visitors’ Center

    The Silver Tsunami: is VA Ready?

    Details will be forthcoming.

  • Energy & Commerce Health Subcommittee 

    March 3, 10:00 a.m., 2123 Rayburn House Office Building

    Combatting an Epidemic: Legislation to Help Patients with Substance Abuse Disorders

    H.R. 1329, the Medicaid Reentry Act;

    H.R. 2281, the Easy MAT for Opioid Addiction Act;

    H.R. 2466, the State Opioid Response Grant Authorization Act;

    H.R. 2482, the Mainstreaming Addiction Treatment Act of 2019;

    H.R. 2922, the Respond to the Needs in the Opioid War (NOW) Act;

    H.R. 3414, the Opioid Workforce Act of 2019;

    H.R. 3878, the Block, Report, And Suspend Suspicious Shipments Act of 2019;

    H.R. 4141, the Humane Correctional Health Care Act;

    H.R. 4793, the Budgeting for Opioid Addiction Treatment Act;

    H.R. 4812, the Ensuring Compliance Against Drug Diversion Act of 2019;

    H.R. 4814, the Suspicious Order Identifying Act of 2019;

    H.R. 4974, the Medication Access and Training Expansion (MATE) Act of 2019;

    H.R. 5572, the Family Support Services for Addiction Act of 2020; and 

    H.R. 5631, the Solutions Not Stigmas Act of 2019.

    Witnesses include: Panel 1: ADM Brett Giroir, MD, Assistant Secretary for Health and Senior Advisory to the Secretary on Opioid Policy; Kimberly Brandt, Principal Deputy Administrator for Policy & Operations, CMS; Thomas Prevoznik, Deputy Assistant Administrator, Diversion Control Division; Drug Enforcement Administration.  Panel 2: Michael Botticelli, Executive Director, Grayken Center for Addiction, Boston Medical Center; Smita Das, MD, Addiction Psychiatrist, Dual Diagnosis Clinic; Patty McCarthy, CEO, Faces & Voices of Recovery; Robert Morrison, Executive Director, National Association of State Alcohol and Drug Abuse Directors; Margaret Rizzo, Executive Director, JSAS HealthCare, Inc; Shawn Ryan, MD, President and CEO, Brightview.

  • Appropriations Departments of Labor, HHS, Education & Related Agencies Subcommittee

    March 4, 10:00 a.m., 2358-C Rayburn House Office Building

    NIH Budget Request for FY 2021

    Witnesses include: Francis Collins, Director, NIH; Anthony Fauci, Director, NIAID; Nora Volkow, Director, National Institute on Drug Abuse; Ned Sharpless, Director, National Cancer Institute; Diana Bianchi, Director, Eunice Kennedy Shriver National Institute of Child Health & Human Development; and Gary Gibbons, Director, National Heart, Lung & Blood Institute.

OTHER HEALTH POLICY NEWS 

  • On February 24, the Institute for Clinical and Economic Review (ICER) announced partnership with Aetion to increase its use of real-world data in its assessments of medicines' cost-effectiveness.

  • On February 25, Mallinckrodt Pharmaceuticals announced a $1.6 billion settlement over its alleged role in contributing to the opioid epidemic. If approved, the funds would be distributed among 47 state and thousands of localities governments over an eight-year period to repay the cost of litigation and treatment for opioid addiction. The company’s generic unit would also have to file for bankruptcy. State government officials have endorsed the settlement. 

  • On February 28, the Supreme Court held a second meeting to discuss whether and when to consider Texas v. Azar, the lawsuit challenging the constitutionality of the Affordable Care Act.

  • On April 27, the Supreme Court will hold oral arguments for Rutledge v. Pharmaceutical Care Management Association, which challenges an Arkansas statute that influences reimbursement rates for PBMs. Specifically, the Supreme Court will decide whether the U.S. 8th Circuit Court of Appeals erred in ruling that the Arkansas policy statute is preempted by the Employee Retirement Income Security Act of 1974.

  • On February 27-28, the Medicaid & CHIP Payment & Access Advisory Commission (MACPAC) held a public meeting on the following topics:

    State Medicaid Initiatives to Improve Maternal Health;

    Improving Enrollment in the Medicare Savings Programs: Decisions on Recommendations to be Included in June Report to Congress;

    State Strategies to Promote the Use of Value-Based Payments in Medicaid Managed Care;

    Medicaid and TRICARE: Third-Party Liability Coordination;

    How Changes in the MA Market are Affecting Integration of Care for Dually Eligible Beneficiaries: Analysis and Comments on Proposed Rule;

    Improving Integration of Care for Dually Eligible Beneficiaries: Decisions on Recommendations to be Included in June Report to Congress; and

    Forthcoming Rule on Program Integrity and Eligibility Determination Processes.

  •  On March 6-7, the Medicare Payment Advisory Commission (MedPAC) will hold a public meeting on the following topics:

    Addressing Medicare Shared Savings Program Vulnerabilities;

    The Role of Specialists in Alternative Payment Models and Accountable Care Organizations;

    Realigning Incentives in Medicare Part D;

    Redesigning the MA Quality Bonus Program; 

    Mandated report: Impact of Changes in the 21st Century Cures Act to Risk Adjustment for MA Enrollees;

    Improving Medicare’s End-Stage Renal Disease Prospective Payment System; and

    Separately Payable Drugs in the Hospital Outpatient Prospective Payment System.