The following LPG Weekly Healthcare Watch provides a summary update of legislative and regulatory healthcare activities from February 9 – February 15. 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
Senate
On February 10, Sen. Martha McSally (R-AZ) signed onto the Senate Finance Committee (SFC) drug package (S. 2543), raising the number of GOP co-sponsors to 11.
On February 11, Majority Leader Mitch McConnell (R-KY) responded to President Donald Trump’s calls for drug pricing legislation. Referencing S. 2543, Leader McConnell stated, “we have internal divisions within my party in the Senate.” However, he claimed GOP leadership will discuss “whether [they] can pull together and get a solution” before May 22, when funding for several health programs expire.
On February 14, Chairman Chuck Grassley (R-IA) announced he is aiming for at least 14 more GOP Senators to endorse the package, which he believes will be sufficient to motivate Leader McConnell to put the package on the floor. Chairman Grassley is making changes to the measure in an attempt to secure more votes but will not disclose them until a Congressional Budget Office (CBO) cost estimate is released.
On February 14, Chairman Grassley claimed he was surprised with some GOP lawmakers’ concern about the Part D inflation rebate, since it generates significant taxpayer savings.
On February 10, Chairman Grassley and three SFC members asked the United Network for Organ Sharing (UNOS) to explain reports of poor conduct among the organ procurement organization they oversee. The Senators claim, "recent reports of lapses in patient safety, misuse of taxpayer dollars, and tens of thousands of organs going unrecovered or not transplanted lead [them] to question the adequacy of UNOS' oversight.” They requested a response by March 1.
On February 11, the Judiciary Committee held a hearing entitled The Infant Patient: Ensuring Appropriate Medical Care for Children Born Alive. Lawmakers debated S. 311, the Born-Alive Abortion Survivors Protection Act, which would make it a felony for a doctor to harm or neglect an infant who survives an "attempted abortion." Ranking Member Dianne Feinstein (D-CA) and other opponents of the measure argued it demands a one-size fits all approach that disregards the unique circumstances of a pregnancy and the advice of clinicians, mothers, and family members. The so-called “born alive” bill failed to pass the GOP-controlled Senate last year; it will be voted on again later this month. Witnesses included: Robin Pierucci, MD, Clinical Neonatologist, Neonatal Intensive Care Unit; Fatima Goss Graves, President & CEO, National Women’s Law Center; Patrina Mosley, Director of Life, Culture & Women’s Advocacy, Family Research Council; Erika Christensen, Patient Advocate; and Jill Stanek, National Campaign Chair, Susan B. Anthony List.
On February 12, the Aging Committee held a hearing entitled There’s No Place Like Home: Home Health Care in Rural America. The hearing focused on the adequacy and accessibility of home health care in rural areas. According to Chair Susan Collins (R-ME), home health care offers many patients a higher quality of life, while reducing costs. She voiced concern with the implementation of the new Patient-Driven Groupings Payment Model and, more specifically, the ability of rural agencies to absorb a pre-emptive 4% rate cut based on behavioral assumptions. She also endorsed revising the rural add-on payment. Witnesses included: LeighAnn Howard, Director Home Health and Specialty Programs, Northern Light Home Care & Hospice; William Dombi President, National Association for Home Care & Hospice (NAHC); Warren Hebert, Assistant Professor & CEO, Loyola University and Home Health Care Association of Louisiana; and Francis Adams, Home Care Worker.
On February 13, the SFC held a hearing entitled the President’s FY 2021 Budget for the U.S. Department of Health & Human Services (HHS). Chairman Grassley applauded the Administration for carving out savings for drug pricing legislation, as well as making investments rural health care. Ranking Member Ron Wyden (D-OR) criticized the proposal’s cuts to Medicaid and claimed the Healthy Adult Opportunity initiative marks the “beginning of the end for the health care safety net.” Prior to the hearing, Committee Democrats sent a letter to HHS Secretary Alex Azar claiming “it is time for the Trump administration’s ongoing assault on the Medicaid program to end.” Ranking Member Wyden also pointed to the Administration’s inability to follow-though on any major proposal to lower prescription drug prices. Secretary Azar was the sole witness.
During the last week in February, the Senate is expected to vote on two abortion-related bills, even though neither is expected to receive 60 votes. The intent of the vote, presumably, is to pressure Democrats facing tough re-elections to take a controversial vote. The measures include:
S. 160, Pain-Capable Unborn Child Protection Act, which proposes a ban on abortion after 20 weeks (excluding cases of rape, incest, and danger to the life of the mother); 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.
House
On February 11, the Education & Labor Committee held a markup on legislation to protect patients from surprise medical bills. H.R. 5800, the Ban Surprise Billing Act, establishes two mechanisms to resolve payment disputes between providers and payers. A benchmark rate would be used to resolve bills $750 or less ($25,000 for air ambulance services); for claims above this threshold, providers and payers could appeal to an independent arbiter. This matches the payment resolution method included in the E&C-HELP Committee proposal. Numerous members raised concerns with how this approach would impact providers. Nevertheless, the bill passed, as amended, by a 32-13 vote.
On February 11, the Education & Labor Workforce Protections Subcommittee held a hearing entitled Balancing Work, Health, and Family: the Case for Expanding the Family and Medical Leave Act. The hearing focused on policy options to loosen eligibility criteria for the Family Medical Leave Act of 1993 so it can benefit additional workers. Witnesses included: Sydney Batch, Representative, North Carolina House of Representatives; Anthony Sandkamp, Owner, Sandkamp Woodworks; Rachel Greszler, Research Fellow in Economics, Budgets & Entitlements, The Heritage Foundation; and Elisabeth Jacobs, PhD, Senior Fellow, Urban Institute.
On February 12, 76 House lawmakers sent CMS a letter requesting for a unique diagnosis related group (DRG) for CAR-T immunotherapy. Absent a permeant payment mechanism, they claim hospitals will face “a reimbursement cliff” that would block patient access. CAR-T therapies currently have a temporary new technology add-on payment, but that payment bump will expire in October. The letter was led by Reps. Roger Marshall (R- KS), Suzan DelBene (D-WA), Tom O'Halleran (D-AZ), and Larry Bucshon (R-IN).
On February 12, the Energy & Commerce Health Subcommittee held a hearing entitled Protecting Women’s Access to Reproductive Health Care. The primary intent of the hearing was to debate H.R. 2975, the Women’s Health Protection Act of 2019, a bill to codify Roe v. Wade into federal law by establishing the right to seek an abortion before the point of fetal viability without an “undue burden.” However, the hearing evolved into a debate on a Louisiana law case that requires doctors who perform abortions to have admitting privileges to a nearby hospital. The law has been challenged and is scheduled to be considered by the Supreme Court (Russo v. June Medical Services LLC). Witnesses included: Holly Alvarado, Advocate; Teresa Stanton Collett, Professor of Law; Georgette Forney, President of Anglicans for Life, Co-founder of the Silent No More Awareness Campaign; Nancy Northup, President & CEO, Center for Reproductive Rights; and Yashica Robinson, Medical Director, Alabama Women’s Center for Reproductive Alternatives.
On February 12, the Ways & Means Committee held a markup on three health measures.
H.R. 5821, the Helping Our Senior Population in Comfort Environments (HOSPICE) Act, responds to two HHS Office of the Inspector General (OIG) reports issued in July 2019 pointing to deficiencies in the quality of care furnished by some hospice providers. The bill would mandate greater transparency and oversight of hospice providers, while boosting provider education and training. Co-author Rep. Tom Reed (D-NY) claimed the intent of the measure is to “educate first, punish second.” The bill passed, as amended, by voice vote.
H.R. 5825, the Transparency in Health Care Investments Act of 2020, would require any private equity firm owning or controlling medical providers to report certain information, enabling policymakers and regulators to better understand their role in shaping the health care delivery system. It passed, as amended, by a party-line voice vote.
H.R. 5826, the Consumer Protections Against Surprise Medical Bills Act of 2020, would protect patients from surprise bills. It would allow providers and payers to engage in open negotiations to resolve out-of-network billing disputes. However, if they do not reach a solution within 30 days, then an independent arbiter would step in. HHS would have wide discretion to determine mediation rules. The measure received broad bipartisan support and passed, as amended, by voice vote. On February 11, a White House spokesperson claimed the Administration has reservations about the arbitration approach given its potential to increase health care costs but did not explicitly oppose H.R. 5826.
The three committees of jurisdiction will seek to negotiate a unified bill that can pass the House by the end of May.
On February 11, the Veterans’ Affairs Health Subcommittee held an oversight hearing entitled Achieving Health Equity for America’s Minority Veterans. According to Subcommittee Chair Julia Brownley (D-CA), the VA should be the leader in building a health care delivery system that can dynamically meet the needs of an increasingly diverse patient population. Members heard from expert witnesses on how the VA successfully furnishes care in an equitable manner, as well as areas for improvement. Witnesses included: Carolyn Clancy, MD, Deputy Under Secretary for Discovery, Education & Affiliate Networks, Veterans’ Health Administration (VHA); Ernest Moy, MD, Executive Director, Office of Health Equity, VHA; Donna Washington, MD, Attending Physician, VA Greater Los Angeles Healthcare System; Kayla Williams, Senior Fellow and Military, Veterans, and Society Program Director, Center for a New American Security, Melissa Bryant, Legislative Director.
On February 12, the Veterans’ Affairs Health and Oversight & Investigations Subcommittees held a joint hearing entitled Mission Critical: Examining Provider Relationships During the Transition to VA’s New Community Care Program. Members considered ways to reduce administrative burden on practitioners and improve the timeliness of provider payment under the Community Care Program. Witnesses included: Kameron Matthews, MD, Deputy Under Secretary for Health for Community Care, VHA; David McIntyre, President & CEO; TriWest Healthcare Alliance, Inc.; Lt. Gen. Patricia Horoho, CEO, OptumServe; William Dombi, President, NAHC; Erik Golnick, Co-Founder & CEO, Veteran & First Responder Healthcare; and Eric Frieman, Co-Founder, Veteran & First Responder Healthcare.
REGULATORY UPDATE
On February 10, President Trump released his $4.8 trillion budget request for FY 2021. The proposal allocates $96.4 billion to HHS in discretionary funding (down 9% from current funding levels) and $1.3 trillion in mandatory funding. Funding to the Centers for Medicare & Medicaid Services (CMS) would drop by $1.6 trillion over a decade; Medicare and Medicaid spending would be cut by roughly $500 billion and $920 billion, respectively. The request includes a savings allowance of $135 billion over a decade for “comprehensive drug pricing reform,” suggesting that the Administration is relying on Congress to lead the drug pricing effort. The $135 billion figure tracks closely with CBO’s projected savings of a previous version of the SFC drug bill (S.2543). Additionally, funding for the Food & Drug Administration (FDA) would increase by 4.5% ($25.4 million) relative to current levels; however, most of that increase would stem from user fees. It also proposes removing oversight of tobacco products from FDA’s jurisdiction and creating a new agency with the sole purpose of regulating that industry. Lastly, it includes $2 billion for a border wall.
On February 10, the U.S. Court of Appeals for D.C. announced it will hear oral arguments on April 17 on CMS’ site neutral payment policy, which has been challenged by the American Hospital Association. The policy aims to pay outpatient hospital clinics the same rates that independent physicians receive for standard office visits; however, it was suspended by a federal district judge last year who claimed HHS lacked the authority to implement it.
On February 11, the American Civil Liberties Union and Planned Parenthood filed a lawsuit against the Trump administration over a new rule that requires insurers in the individual market to send enrollees a separate monthly bill for the portion of their premiums dedicated to abortion coverage. The plaintiffs argue HHS lacks the authority to issue the policy and that it violates the Affordable Care Act's (ACA) protections for people seeking necessary medical care.
On February 12, the Office of Management & Budget (OMB) received a FDA final rule on the definition of a “biological product.” In December 2018, the FDA proposed to change the definition to incorporate changes made by the Biologics Price Competition and Innovation Act (BPCIA) of 2009. BPCIA amended the definition of “biological product” in Section 351(i) of the PHS Act to include a “protein (except any chemically synthesized polypeptide).”
On February 12, CMS Administrator Seema Verma posted a blog defending the Medicaid Fiscal Accountability Regulation (MFAR), which changes how states can access federal Medicaid funding. Policy skeptics argue MFAR could reduce national Medicaid spending by between $37 billion to $49 billion annually. However, Verma contends the rule is not intended to reduce program spending, but rather to boost accountability and transparency to ensure each Medicaid dollar complies with federal law. To support her case, she cites recommendations from the Medicaid & CHIP Payment & Access Commission and OIG for CMS to strengthen its oversight of Medicaid supplemental payments.
On February 13, the White House Council of Economic Advisors (CEA) released a report concluding that foreign governments are unfairly benefiting from U.S. investments in pharmaceutical research by paying below fair market value for drugs. The gap between U.S. and foreign drug prices has grown in recent years, according to the report. European prices on the 200 best-selling branded drugs are 32% of U.S. prices, down from 51% in 2003. CEA attribute this difference primarily to price controls and other nonmarket-based practices. CEA argues that U.S. prices cannot decline unless foreign prices grow, or else patients worldwide will suffer from a reduction in innovative treatments. Notably, the Administration’s International Pricing Index (IPI) model, which is currently under review at OMB, would index U.S. drug prices to prices in other countries, many of which are criticized in the report as “free-riders.”
On February 13, Secretary Azar told lawmakers that the Centers for Disease Control & Prevention (CDC) has increased their efforts to monitor the coronavirus in five cities. He claimed these new efforts will allow public health officials to better understand how the virus is spreading. As of that day, 15 cases had been confirmed in the U.S. and 600 citizens were still in quarantine.
Between February 11-12, the total number of people infected in the Hubei Province of China increased by at least 14,840, raising the total number of confirmed cases to 48,206. This marks the largest 24-hour jump; however, some of the increase is attributed to a change in China’s reporting methodology.
On February 12, it was reported that at least 25 public health labs have received ineffective coronavirus test kits from the CDC. Therefore, the Agency has directed all specimens to be sent to their Atlanta headquarters until further notice.
On February 12, CDC announced they are communicating directly with medical supplies manufacturers to monitor risk of shortages.
On February 12, Congressional appropriators held a closed-door meeting with top federal health officials to discuss how to increase U.S. pharmaceutical production if drug shortages surface as a result of the epidemic.
On February 12, CDC claimed that while the National Institutes of Health is working to develop a vaccine, no drug company has agreed to manufacture it.
On February 13, Japanese officials announced the country’s first coronavirus death, marking the third fatality outside of China.
On February 13, CMS announced it created a new Healthcare Common Procedure Coding System (HCPCS) code for providers and laboratories to bill when testing for coronavirus, which will allow separate payment as well as better tracking.
On February 14, the U.S. District Court for D.C. ruled against Medicaid community engagement requirements in Arkansas, claiming that HHS’ approval of “Arkansas Works” was “arbitrary and capricious.” The decision has broad implications for other states that have (at least attempted) to issue work requirements.
RULES AT THE WHITE HOUSE 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
Comprehensive Care for Joint Replacement Model Three Year Extension and Modifications to Episode Definition and Pricing (CMS-5525-P); Proposed Rule; Received 8/22/2019
Medicaid & CHIP Managed Care (CMS-2408-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
Interoperability and Patient Access (CMS-9115-F); Final Rule; Received 9/26/2019
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 for Acute Care Hospitals; the Long-Term Care Hospital Prospective Payment System; and FY 2021 Rates (CMS-1735); Proposed Rule; Received 1/30/2020
Advance Notice of Methodological Changes for Calendar Year (CY) 2021 for Medicare Advantage (MA) Capitation Rates, Part C and Part D Payment Policies (Part II); Notice; Received 12/13/2019
SHHS-FDA
Institutional Review Boards; Cooperative Research; Proposed Rule; Received 10/31/2019
Definition of the Term “Biological Product;” Final Rule; Received 2/12/2020
HHS-OIG
Civil Monetary Penalties Law Notice of Proposed Rulemaking; Proposed Rule; Received 1/23/2020
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 12, GAO released a report entitled, Medicaid Eligibility: Accuracy of Determinations and Efforts to Recoup Federal Funds Due to Errors. The report outlines known information about the accuracy of Medicaid eligibility determinations following changes made in the ACA, and CMS’ efforts to recoup funds related to eligibility errors. GAO reviewed 47 state and federal audits of Medicaid eligibility determinations across 21 states published between 2014 and 2018.
Office of Inspector General (OIG)
On February 10, OIG released a report entitled Life Safety and Emergency Preparedness Deficiencies Found at 18 of 20 Texas Nursing Homes. OIG identified deficiencies in areas related to life safety or emergency preparedness at 18 of the 20 nursing homes that they audited. They attribute such deficiencies to inadequate management and oversight, as well as high staff turnover. They recommend for Texas to enforce corrective actions.
On February 12, OIG posted a report entitled The Federal Marketplace Properly Determined Individuals' Eligibility for Enrollment in Qualified Health Plans but Improperly Determined That an Estimated 3% of Individuals Were Eligible for Insurance Affordability Programs. For the 2018 coverage year, OIG estimates that the Federal marketplace (1) improperly determined that 191,896 (3%) of the 7.5 million individuals were eligible for insurance affordability programs and (2) may have improperly determined that 402,207 individuals (5%) of the 7.5 million were eligible for those programs. These individuals received an estimated $40.8 million and $180.1 million, respectively, in monthly advance premium tax credit payments. OIG made nine recommendations to resolve the problems identified in their report; however, CMS only concurred with six of them.
On February 13, OIG issued a report entitled The Indiana State Medicaid Agency Made Capitation Payments to Managed Care Organizations After Beneficiaries’ Deaths. OIG estimates that Indiana made Medicaid payments totaling at least $1.1 million ($862,097 Federal share) to managed care organizations (MCOs) on behalf of deceased beneficiaries between January 1, 2016 through December 31, 2017. They recommend for the state to repay the Federal government $862,097 and to recover overpayments to MCOs.
On February 14, OIG posted a report entitled The Majority of Providers Reviewed Used Medicare Part D Eligibility Verification Transactions for Potentially Inappropriate Purposes. CMS requested for OIG to audit a mail-order pharmacy’s Part D Eligibility Verification Transactions (E1 transactions). OIG found that the majority of providers (25 of 30) used E1 transactions for some purpose other than to bill for a prescription or determine drug coverage billing order. They recommend that CMS (1) continue to monitor providers submitting a high volume of E1 transactions relative to prescriptions processed, (2) release guidance that clarifies E1 transactions should not be used for marketing purposes, (3) ensure that only pharmacies and other authorized entities submit E1 transactions, and (4) take enforcement action when abuse is identified.
UPCOMING HEARINGS
Energy & Commerce Health Subcommittee
February 26, date and location TBA
Hearing to Examine the President’s FY 2021 Budget: HHS
Secretary Azar will be the sole witness.
The full Ways & Means Committee will have a budget hearing with Secretary Azar during the week of February 24.
OTHER HEALTH POLICY NEWS
On February 10, the Urban Institute published a report describing “multiple and complex problems” regarding how New Hampshire implemented Medicaid work requirements. During the one-month implementation period (June 2019), only 32% subject to the requirement were in compliance. This low figure caused New Hampshire to delay implementation of the policy at the time. The Urban Institute concludes that the “evidence suggests such programs cause significant harm to Medicaid beneficiaries while not appreciably supporting their ability to work.”
On February 10, Chip Davis announced his resignation as CEO of the Association for Accessible Medicines (AAM). Until the board names his replacement, Senior Vice President & General Counsel Jeffrey Francer will serve as the interim CEO. Davis led AAM for five years. Starting next month, he will be the CEO of the Healthcare Distribution Alliance.
On February 13, Avalere released an AAM-funded analysis that reveals that a majority of generic drugs are on non-generic tiers in Medicare Part D for the first time in the history of the program. According to Avalere, plans placed generic drugs on Tier 1 (preferred generic), the lowest tier available, only 10% of the time in 2020. When generic products are placed on higher tiers, Avalere notes, they “may have higher cost-sharing and, as a result, their utilization may decrease.”
On February 13, the Health Care Cost Institute (HCCI) released a report analyzing cost and utilization data in the commercial market. They conclude per-person health care spending increased by 18% from 2014-2018, primarily due to an increase in prices.
On February 13, Oregon officials announced a plan to limit nearly all health care spending within the state to 3.4% over the next five years. This target would apply to commercial insurance, Medicaid, and Medicare. The commission was established by the state legislature with the goal of aligning growth in health care spending to the state’s GDP.
On February 13, the Kansas Senate President Susan Wagle (R) claimed she will not endorse Medicaid expansion until the House passes a constitutional amendment to block taxpayer funded abortions. Otherwise, Sen. Wagle argues Gov. Laura Kelly’s (D) Medicaid expansion plan would “open Pandora’s box to state-funded abortions.”