July 17

The Washington Weekly: July 17, 2015

Tavenner To Lead America’s Health Insurance Plans (AHIP)
On Wednesday, July 15, America’s Health Insurance Plans (AHIP) announced that Marilyn Tavenner, the former Administrator for the Centers for Medicare and Medicaid Services (CMS), will become its new President and CEO starting August 24. Tavenner stepped down as the head of CMS in February, where she led federal efforts to implement the Affordable Care Act and the healthcare.gov website. Tavenner will now lead lobbying efforts for AHIP, the trade group which represents numerous major insurance companies including Aetna, Anthem, and Humana. AHIP’s former CEO of 22 years, Karen Ignani, recently left to become President of EmblemHealth. AHIP’s press release announcing Tavenner’s hire can be found HERE.

CMS Releases 2014 Actuarial Report for Medicaid
On July 10, the Centers for Medicare and Medicaid Services’ (CMS) Office of the Actuary released the 2014 Actuarial Report on the Financial Outlook for Medicaid. Based on the ACA’s expansion, the report examines the effects of the 5.7 million newly eligible adults in Medicaid. Findings indicate that the average new beneficiary cost in 2014 is estimated to be $5,517, approximately $1,000 more than the cost for adults that are not newly eligible. Original projections anticipated that the expansion population would cost one percent less than those who were not newly eligible. The report also presents an analysis of past Medicaid trends and 10-year projections of expenditures and enrollment. Read the full report HERE.

PDUFA and MDUFA Reauthorizations Begin With Public Meetings
This week the Food and Drug Administration (FDA) received input from various stakeholders representing patients, healthcare professionals, and the regulated industry on the reauthorization of the Prescription Drug User Fee Act (PDUFA) and Medical Device User Fee Act (MDUFA). Both PDUFA and MDUFA expire under current legislative authority in September 2017. Industry representatives weighed in on ways to further facilitate successes and address failures in the programs. More information on the PDUFA Meeting can be found HERE.  More information on the MDUFA Meeting can be found HERE.

Senate Finance Hearing Reviews HealthCare.gov Controls
On Thursday, July 16, the Senate Finance Committee held a hearing to review the HealthCare.gov Controls, which had been under investigation from the Director of Audit Services at the Government Accountability Office (GAO), Seto Bagdoyan, who testified at the hearing. The undercover investigation sought to determine how the federal health insurance exchange handles fraudulent applications. In his opening remarks, Chairman Orrin Hatch (R-UT) noted the recent GAO report proved that no measures had been taken to fix the issues since last year’s GAO report that identified 11 out of 12 fake applications created by the GAO for testing purposes were approved. Bagdoyan voiced a similar opinion stating that the investigation poses serious concerns due to the ability of fictitious applicants to receive coverage and to even be reinstated after the exchange had already terminated them. Bagdoyan even went as far to say that HealthCare.gov places a higher incentive to get people covered than to verify the legality of the benefits. While Ranking Member Ron Wyden (D-OR) downplayed the claims because there were no real people consuming benefits through the fake applications, Senators John Thune (R-SD) and Dan Coats (R-IN) believe this report deserves more attention from the Committee. The hearing can be found HERE.  The recent GAO Report can be found HERE.

White House Issues Proposed Privacy and Trust Principles for the Precision Medicine Initiative
Published on July 8, the White House issued the Precision Medicine Initiative: Proposed Privacy and Trust Principles. The Precision Medicine Initiative (PMI) is a group comprised of members from the White House Office of Science and Technology Policy, the Department of Health and Human Services Office for Civil Rights, and the National Institutes of Health. PMI’s goal is to support research, technology, and policies that drive the development of individualize treatments. The initiative is federally funded by a $215 million investment under the 2016 budget. The Proposed Principles intend to guide the collection of big data, analysis, and sharing, while maintaining the privacy of protected health information (PHI) gathered from patients. Comments on the Proposed Principles are due on August 7, 2015. The complete PMI document is available HERE.

House GOP Lawmakers Introduce ‘Right to Try’ Legislation
On Thursday, July 9, Representatives Matt Salmon (R-AZ), Paul Gosar (R-AZ), and Marlin Stutzman (R-IN), introduced H.R. 3012, the Right to Try Act of 2015. The legislation largely mirrors ‘Right to Try’ laws seen in twenty-two states, which provide patient access to unapproved, investigational drugs. State action has been championed by The Goldwater Institute, which says that the laws are limited to terminally ill patients with no other treatment options and to drugs which pass basic safety standards. Opponents of the legislation argue the Food and Drug Administration’s (FDA) existing expanded access program provides a safe and consistent avenue for patients seeking access to drugs under development, and that the proposed law would restrict FDA’s authority to enforce basic safety and efficacy standards. Opponents also note the House-passed 21st Century Cures Act includes a section improving the expanded access program. Text of the legislation can be found HERE.

Energy & Commerce Oversight Subcommittee Holds Hearing on Medicare Part D
On Tuesday, July 14, the Energy & Commerce Oversight Subcommittee held a hearing entitled, “Medicare Part D: Measures Needed to Strengthen Program Integrity.” Witnesses at the hearing included Ann Maxwell from the Department of Health and Human Services’ (HHS) Office of Inspector General (OIG) and Shantanu Agrawal from the Center for Program Integrity at the Centers for Medicare and Medicaid Services (CMS). Subcommittee Chairman Tim Murphy (R-PA) highlighted the Committee’s concerns that CMS has failed to implement OIG recommendations to better oversee the Medicare Part D program, which has seen high levels of fraud and abuse in recent years. Murphy and Subcommittee Ranking Member Diana DeGette (D-CO) also raised concerns that Part D fraud could be contributing to opioid abuse. Deputy Administrator Agrawal testified that CMS has taken substantial steps to implement OIG’s recommendations, but did not give a timeline as to when all recommendations would be adopted. A full recording of the hearing can be found HERE.

Representatives Blackburn and Price Introduce ICD-10 Legislation
On Wednesday, July 15, Representatives Marsha Blackburn (R-TN) and Tom Price, MD (R-GA) introduced H.R.3018, the Coding Flexibility in Healthcare Act of 2015 (Code-FLEX). The legislation would allow providers to submit claims using either ICD-9 or ICD-10 codes for six months after the ICD-10 implementation deadline, set for October 1. The bill would also require the Department of Health and Human Services (HHS) to report to Congress three months after the implementation of ICD-10 on how the new codes are affecting providers, patients, and other stakeholders. Last week, the Centers for Medicare and Medicaid Services (CMS) announced a one-year grace period during which it will continue to pay claims even if they use non-specific ICD-10 codes. Text of the legislation can be found HERE.

Senate Appropriation Committee Passes FY2016 Agriculture-FDA Appropriation Bill
On Thursday, July 16, the Senate Appropriations Committee approved the Fiscal Year 2016 Agriculture, Rural Development, Food and Drug Administration (FDA), and Related Agencies Appropriations Bill on a bipartisan 28-2 vote. The proposed legislation grants funding for essential agriculture programs as well as funding for the FDA. The bill totals $143.8 billion and includes $20.51 billion in discretionary funding. Furthermore, the bill provides more than $2.6 billion in discretionary funding for the FDA, an increase of $40 million over the FY2015 enacted level. Total funding for the FDA, including revenue from user fees, is $4.6 billion – $116 million above FY2015 level. The bill’s discretionary funding, not including user fees, for FDA’s review centers is broken down below:
• $1,366,975,000 for the Center for Drug Evaluation and Research (CDER)
• $424,635,000 for the Center for Devices and Radiological Health (CDRH)
• $345,190,000 for the Center for Biologics Evaluation and Research (CBER)

The bill can be found HERE.

CMS Fraud Detection System Identifies and Prevents $820 million in Improper Medicare Payments    On July 14, the Centers for Medicare and Medicaid Services (CMS) released findings regarding the Fraud Prevention System. Created in 2010 under the Small Business Jobs Act, the Fraud Prevention System helps protect the Medicare Trust Fund and prevents fraud. During its first three years, the system identified or prevented $820 million inappropriate payments. Operating on predictive analytics, the Fraud Prevention System helps identify questionable billing patterns in real time and analyze past payments that may indicate fraud. The tool has contributed to the $25 billion recovered from fraudulent or potentially fraudulent activities to the Medicare Trust Fund in the past five years. Find the full press release HERE.

CBO Releases Presentation On Long Term Budget Outlook
On July 14th, the Congressional Budget Office (CBO) gave a presentation on the 2015 Long Term Budget Outlook, based on its full report published in June. The presentation provides key points of the CBO’s findings, including the projected growth in federal spending for major healthcare programs and social security. The report indicates that due to the rising age of consumers, greater spending per capita, and an increasing eligible population for subsidies and Medicaid, spending for the government’s major healthcare programs could rise up to 14.2 percent of the GDP by 2014 if the current law remains. The presentation can be found HERE and the original CBO report is available HERE.

June 26

The Washington Weekly: June 26, 2015

Supreme Court Upholds the Provision of Tax Credits in Federal Exchanges under ACA

On Thursday, June 25, the U.S. Supreme Court sided with the federal government in a landmark 6-3 decision in King v. Burwell, upholding the provision in the Affordable Care Act (ACA) that provides federal tax credits to individuals to purchase health insurance in states using federally facilitated health insurance exchanges. Writing for the majority, Justice Roberts found that the ACA as written allows the federal government to provide these tax credits. Had the Court struck down the provision of tax credits in federal exchanges, 6.4 million low- and middle-income individuals would have had lost their federal assistance used to purchase health care coverage. This likely would have resulted in rising premiums as fewer individuals would choose to enroll in the exchanges in the affected states. This decision ensures that these individuals will maintain their tax credits. The Supreme Court’s ruling marks perhaps the final hurdle for the ACA. Since its enactment in 2010, the law has survived a prior legal challenge before the Supreme Court in National Federation of Independent Business v. Sebelius in 2012 and dozens of repeal votes. Congressional Republicans have expressed interest in continuing to pursue piecemeal changes to the ACA. The Court’s slip opinion in King v. Burwell is available HERE.

 

IPAB Repeal Legislation Passes the House

On Tuesday, the House passed H.R. 1190, the Protecting Seniors’ Access to Medicare Act of 2015, by a vote of 244-154. The legislation, introduced by Representatives Phil Roe, M.D. (R-TN) and Linda Sánchez (D-CA), repeals the Independent Payment Advisory Board (IPAB), the unelected 15 member board that was created under the Affordable Care Act (ACA) to extend Medicare solvency. Eleven House Democrats sided with Republicans to repeal the measure, and 35 House members did not vote. The bill is offset by a $7.1 billion cut from the ACA’s Public Health and Prevention Fund. The legislation now moves to the Senate, where the prospects for its consideration are uncertain.

 

House and Senate Appropriations Committees Approve FY2016 Funding Bills for HHS

On Wednesday, June 24, the House Appropriations Subcommittee approved the FY2016 Labor, Health and Human Services, Education, and Related Agencies (Labor-H) bill funding various agencies and the Department of Health and Human Services (HHS), except for the Food & Drug Administration (FDA), for FY2016. The bill provides $71.3 billion in discretionary funds for HHS, a $298 million increase over FY 2015, including $31.2 billion for the National Institutes of Health (NIH), 1.1 billion above the FY2015 level; and $3.3 billion for the Centers for Medicare & Medicaid Services (CMS) program management, $344 million below the FY2015 level. The bill eliminates funding for the Affordable Care Act (ACA) as well as all funding for the Agency for Health Research & Quality (AHRQ).

On Thursday, June 25, the Senate Appropriations Committee passed their FY2016 Labor-H bill. The Senate bill funds HHS at $70.4 billion, a $646 million decrease from FY2015 levels, including $32 billion for NIH (a $2 billion increase over FY2015) and $3 billion for CMS program management (a $642 million decrease from FY2015). Like the House Labor-H bill, the Senate bill eliminates funding for the ACA’s discretionary programs as well as all funding for AHRQ.

Full text of the House Labor-H bill can be found HERE. Full legislative text for the Senate Labor-H bill, S.1695, is not yet available.

 

OIG Issues Reports on Fraud Vulnerabilities in Medicare Part D

On Tuesday, June 23, the Department of Health and Human Services (HHS) Office of the Inspector General (OIG) issued two reports highlighting the Medicare Part D program’s vulnerabilities to fraud. In the first report called “Ensuring the Integrity of Medicare Part D,” OIG discussed the need for more robust oversight and more effective collection and analysis of program data to proactively identify and resolve program vulnerabilities. OIG recommended several reforms to CMS, including requiring plans to report data on suspected fraud, expanding the range of drugs reviewed for potential fraud and abuse, and implementing edits to reject prescriptions written by excluded providers. In an accompanying report on questionable billing and geographic hotspots for fraud, OIG identified more than 1,400 pharmacies with suspicious billing patterns that accounted for $2.3 billion in prescription drug claims to Part D in 2014. OIG also cited as a concern the growing spending on opioids, which has increased by over 150 percent since 2006. The “Ensuring the Integrity of Medicare Part D” report is available HERE. The accompanying report identifying suspicious billing patterns is available HERE.

 

CMS Issues April 2015 Medicaid and CHIP Enrollment Report

On Tuesday, June 23, the Centers for Medicare and Medicaid Services (CMS) issued its April 2015 Medicaid and Children’s Health Insurance Program (CHIP) monthly eligibility and enrollment report. According to the report, approximately 12.3 million additional individuals have enrolled in Medicaid and CHIP since October 2013 when the initial exchange marketplace open enrollment period began, compared to enrollment in the previous three months. About 71.1 million individuals have enrolled in Medicaid and CHIP through April for the 49 states that reported data. The full report is available HERE.

 

House Ways & Means Committee Holds Hearing on ACA Premium Increases

On Wednesday, June 24, the House Ways & Means Oversight Subcommittee held a hearing to examine the effects of the Affordable Care Act (ACA) on healthcare premiums. Witnesses at the hearing included several state insurance commissioners from Tennessee, Maryland, and Washington. In his opening statement, Subcommittee Chairman Peter Roskam (R-IL) described how providers across numerous states are asking state insurance commissioners for premium rate increases of over 20% to offset losses associated with implementation of the ACA. Several panelists testified that the largest health insurance providers in their states are requesting significant premium increases to offset losses before general and administrative costs are incurred. Three panelists also stated that the current pace of provider losses due to ACA regulations is unsustainable. The Administration has predicted that health care claims will increase by 14% in 2016. Panelists noted that 2014 and 2015 data is having an important impact on their decisions for 2016 insurance rates, which are due in mid-late August. A full recording of the hearing can be found HERE.

 

Energy & Commerce Committee Holds Hearing on Medicaid Demonstrations

On Wednesday, June 24, the House Energy & Commerce Health Subcommittee held a hearing entitled “Examining the Administration’s Approval of Medicaid Demonstration Projects.” Witnesses at the hearing included Katherine Iritani, Health Care Director, Government Accountability Office (GAO) and Matt Salo, Executive Director, National Association of Medicaid Directors. No representative from the Centers for Medicare and Medicaid Services (CMS) participated in the hearing. The hearing focused on how CMS applies its guidelines for assessing Medicaid demonstration proposals and how the process can be improved and refined. Republicans at the hearing raised concerns about the lack of transparency and accountability in the Administration’s spending on Medicaid demonstration programs, noting that one-third of Medicaid dollars are spent on demonstrations. Katherine Iritani testified that the GAO is concerned about the long-term stability of the Medicaid program. Matt Salo testified that State Medicaid Directors would support legislation to increase transparency and bring predictability to the waiver approval process, but that emphasis should be placed on outcomes and defining a path to make successful demonstrations permanent. A full recording of the hearing can be found HERE.

 

Trade Promotion Authority Passes the Senate

On Wednesday, the Senate passed legislation known as “fast-track” or Trade Promotion Authority, granting the President the authority to finalize trade agreements, by a vote of 60-38. The bill allows the Administration to negotiate trade agreements with Pacific Rim nations and the European Union and send them to Congress for approval, without the ability of Congress to amend or filibuster them. The expedited process lasts until 2018 with the possibility of extension until 2021, and is seen as a key step towards completing negotiations on the Trans-Pacific Partnership (TPP). The TPP trade deal includes 11 other Pacific Rim nations, and addresses various trade priorities for the drug and device industries. With fast-track legislation in place, focus will now shift to TPP, where a vote is expected this fall.

 

Senate Finance Committee Marks Up Various Health Bills

On Wednesday, June 24, the Senate Finance Committee held an executive session to mark up a series of healthcare related bills dealing with a wide ranging set of issues. The bills considered are listed below:

S.607 – The Rural Community Hospital Demonstration Extension Act of 2015

S.1349 – The Notice of Observation, Treatment and Implication for Care Eligibility (NOTICE) Act of 2015

S.1461 – A One Year Extension of the Enforcement Instructions on Supervision Requirements of Outpatient Therapeutic Services in Critical Access Hospitals (CAHs) and Small Rural Hospitals

S.313 – Prevent Interruptions in Physical Therapy Act of 2015

S.1253 – Patient Access to Disposable Medical Technology Act of 2015

S.1347 – Electronic Health Fairness Act of 2015

S.704 – The Community Based Independence for Seniors Act

S.1362 – The PACE Innovation Act of 2015

S.861 – Preventing and Reducing Improper Medicare and Medicaid Expenditures Act of 2015

S.349 – Special Needs Trust Fairness Act of 2015

S.466 – Quality Care for Moms and Babies Act

S.599 – Improving Access to Emergency Psychiatric Care Act of 2015

 

All of these bills were approved, en bloc, by voice vote.

 

E&C Releases 21st Century Cures Committee Report

On Thursday, June 25, the House Energy & Commerce (E&C) Committee released its Committee Report on H.R. 6, the 21st Century Cures Act, as reported by the Committee in May. The full committee report includes the bill’s legislative text and history, cost estimate, and an explanation of the provisions via new report language. While current Congressional Budget Office (CBO) estimates indicate that the legislation would cost $106.4 billion from 2016-2020, this figure includes three years of funding for the National Institutes of Health (NIH) to boost its research and development capabilities. The score is unlikely to inhibit the bill from moving forward, with a vote on the floor of the House expected soon after the Independence Day recess. The full report can be found HERE.

June 19

The Washington Weekly: June 19, 2015

House Passes Medical Device Tax Repeal and Medicare Advantage Reform Legislation

On Thursday, June 18, the House of Representatives passed H.R. 160, The Protect Medical Innovation Act, sponsored by Congressman Erik Paulsen (R-MN) to repeal the 2.3% excise tax on medical devices. The measure passed by a vote of 280-140, with 234 Republican and 46 Democrat supporters. The measure does not include an offset to pay for the $24.4 billion cost to repeal the tax. The measure now heads to the Senate, where a timeline for its consideration is not yet known. President Obama has threatened to veto the measure, but the veto can be overturned by a vote of two-thirds of both the House and the Senate.

On Wednesday, June 17, the House of Representatives passed four Medicare Advantage (MA) reform bills by voice vote. The bills include:

  • H.R. 2505, the Medicare Advantage Coverage Transparency Act;
  • H.R. 2507, the Increasing Regulatory Fairness Act;
  • H.R. 2582, the Seniors’ Health Care Plan Protection Act; and
  • H.R. 2570, the Strengthening Medicare Advantage through Innovation and Transparency for Seniors Act.

The Medicare Advantage Coverage Transparency Act, sponsored by Representative Mike Kelly (R-PA), would require the Department of Health and Human Services (HHS) to submit Medicare Part A, B, C and D enrollment data by zip code, congressional district and state. The Increasing Regulatory Fairness Act, sponsored by Representative Kevin Brady (R-TX), would increase the amount of time plans have to respond to annual pay rules from 45 to 60 days. The Seniors’ Health Care Plan Protection Act, sponsored by Representative Vern Buchanan (R-FL), would revise the current 5-star rating system to take patient health and socioeconomic status into account and would prohibit HHS from removing a Medicare Advantage plan from the MA program because of low star ratings until after 2018. The Strengthening Medicare Advantage through Innovation and Transparency for Seniors Act, sponsored by Representative Diane Black (R-TN), would require Medicare to set up a value-based insurance design (VBID) demonstration program which would try to use plan design to encourage enrollees to use more high-value care.

The four bills now head to the Senate for consideration.

HRSA Issues Notice of Proposed Rulemaking on 340B Drug Pricing Program

On Tuesday, June 16, the Health Resource and Services Administration (HRSA) issued a notice of proposed rulemaking (NPRM) with proposed changes to the 340B Drug Pricing Program. One proposal would codify as regulation the process listed in the 340B statute for calculating 340B ceiling prices for covered outpatient drugs. The NPRM would also codify existing guidance to create a penny pricing exception and a process for calculating ceiling prices for new drugs. Finally, the NPRM would establish civil monetary penalties for manufacturers that charge covered entities more than a drug’s ceiling price. HRSA is soliciting comments through August 17, 2015. The NPRM is available HERE.

House Labor-H Appropriations Subcommittee Approves FY2016 Funding Bill for HHS

On Wednesday, June 17, the House Labor, Health and Human Services, Education, and Related Agencies (Labor-H) Subcommittee approved a bill funding various agencies and the Department of Health and Human Services (HHS), except for the Food & Drug Administration (FDA), for FY2016. The bill includes $71.3 billion in discretionary funds for HHS, a $298 million increase over FY 2015. Funding for various agencies within HHS is broken down below:

  • National Institutes of Health (NIH) – The bill provides a total $31.2 billion for the NIH, $1.1 billion above the FY2015 enacted level.
  • Centers for Medicare and Medicaid Services (CMS) – The recommendation provides $3.3 billion for CMS management and operations, $344 million below the FY2015 enacted level.
  • Centers for Disease Control and Prevention (CDC) – The legislation includes a total of $7 billion for the CDC, $140 million above the fiscal year 2015 enacted level.
  • Health Resources and Services Administration (HRSA) – The bill includes over $6 billion for HRSA, $299 million below the fiscal year 2015 enacted level.

The full Appropriations Committee will consider the Labor-H bill next Wednesday, June 24. Full text of the Labor-H bill can be found HERE.

House Ag-FDA Appropriations Subcommittee Approves FY2016 FDA funding Bill

On Thursday, June 18, the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies (Ag-FDA) Subcommittee approved a bill funding the Food & Drug Administration (FDA), among other agencies, for FY2016. The bill provides a total of almost $2.6 billion in discretionary funding for FDA, an increase of $30 million over the fiscal year 2015 enacted level. Total funding for the FDA, including revenue from user fees, is $4.6 billion – $106 million above fiscal year 2015 level. The bill’s discretionary funding, not including user fees, for FDA’s review centers is broken down below:

  • $1,365,691,000 for the Center for Drug Evaluation and Research (CDER)
  • $424,135,000 for the Center for Devices and Radiological Health (CDRH)
  • $345,190,000 for the Center for Biologics Evaluation and Research (CBER)

Full text of the Ag-FDA bill can be found HERE.

Senators Burr and Franken Introduce Device Accountability Act

On Thursday, June 18, Senators Richard Burr (R-NC) and Al Franken (D-MN) introduced the Food & Drug Administration (FDA) Device Accountability Act. The bill aims to improve the efficiency of the FDA medical device approval process. The legislation would ensure that the FDA eliminate unnecessary burdens when evaluating devices (through the reinforcement of the “least burdensome” principle); permit the use of centralized Institutional Review Boards (IRBs) for medical device trials; and require that FDA update its regulatory guidance to clarify the criteria for waiving Clinical Laboratory Improvements Act (CLIA) requirements. A summary of the legislation can be found HERE.

MedPAC Issues June 2015 Report to Congress

On Monday, June 15, the Medicare Payment Advisory Commission (MedPAC) issued its June 2015 Report to Congress. Although the report typically contains specific recommendations for Congress, many of the topics covered in the report include only discussions of various policy reforms or research findings and do not include recommendations. Among the topics covered in the report is a discussion of alternative value-based payment methodologies for managing Part B drug use, such as adopting the least costly alternative (LCA) policy, a consolidated payment code approach, or a bundled services approach. MedPAC also discusses payment alternatives to the current average sales price plus six percent (ASP+6%) methodology for covered outpatient drugs in Part B and the 340B Drug Pricing Program. These alternative methodologies include using a smaller percentage add-on payment or using a flat fee instead of the percentage add-on. MedPAC also included a chapter on Part D risk sharing reforms, including changes to the reinsurance and risk corridor programs. The full report is available for download HERE.

MACPAC Issues June 2015 Report to Congress

On Monday, June 15, the Medicaid and CHIP Payment and Access Commission (MACPAC) issued its June 2015 Report to Congress. The report covers a variety of topics, including use of psychotropic medications and behavioral health trends in Medicaid. The report also contains a chapter on Delivery System Reform Incentive Payments (DSRIP), which are supplemental Medicaid payments paid to states that support provider-led efforts to improve quality and outcomes. The full report is available HERE.

Senate Republicans Discuss 2-year King v. Burwell Fix

On Wednesday, June 17, Senate Republicans including Finance Committee Chairman Orrin Hatch (R-UT) and Senator Lindsey Graham (R-SC) held a closed-door meeting where they outlined a plan if the U.S. Supreme Court strikes down the subsidies in federal exchanges under Obamacare in their ruling in King v. Burwell expected later this month. The response, which has not been formally introduced, would include an extension of the subsidies for a period of time (potentially into 2017) and a delayed repeal of certain segments of Obamacare, including the individual and employer mandates. Senators also discussed legislation written by Senators Ron Johnson (R-WI) and Ben Sasse (R-NE) at the meeting. A decision on the Supreme Court case is expected in the coming days.

OIG Issues Report on Financial Assistance Payments to Exchange Plans

On Tuesday, June 16, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued a report which found that the Centers for Medicare and Medicaid Services (CMS) lacked adequate internal controls for ensuring the accuracy of nearly $2.8 billion in financial assistance payments made to qualified health plans (QHPs) on the exchanges. OIG found that CMS’s lack of internal controls led to overpayments and underpayments of cost-sharing reductions (CSRs) for exchange enrollees. OIG recommended several reforms to CMS, including implementing computerized systems to maintain confirmed enrollee and payment information so that the agency does not need to rely on QHP issuers’ attestations when calculating payments. The full report is available HERE.

HHS, Labor, and Treasury Issue Summary of Benefits and Coverage Final Rules

On Friday, June 12, the Departments of Health and Human Services (HHS), Labor, and Treasury issued joint Summary of Benefits and Coverage final regulations that update the coverage information health plans must provide to consumers. According to the agencies, the regulations are designed to make it easier for individuals and employers to compare their options when shopping for and renewing health insurance coverage. For example, issuers must provide online access to a copy of the individual coverage policy for each plan or group certificate of coverage. These documents also must be made publicly available to all potential consumers. The final rule is available HERE.

House Approves Standalone Trade Promotion Authority Bill

On Thursday, the House of Representatives passed a standalone bill reauthorizing the President’s Trade Promotion Authority, a program granting the President the authority to finalize trade agreements with Pacific Rim nations and the European Union, by a vote of 218-208. The bill determines the rules by which trade agreements can be negotiated by the Administration and submitted to Congress for a vote before becoming effective. Such authority is necessary for the government to finalize trade deals such as the Trans-Pacific Partnership (TPP), which includes various protections for the drug and device industries. This program was debated as part of a larger package which failed to pass the House last week. Senate Majority Leader Mitch McConnell hopes to vote on the bill in the Senate next week, but its final outcome is uncertain.

June 12

The Washington Weekly: June 12, 2015

House Judiciary Committee Passes Markup of the Innovation Act

On Wednesday, June 11, the House Judiciary Full Committee held a markup of H.R. 9, the Innovation Act. The bill, introduced by committee Chairman Bob Goodlatte (R-VA) and cosponsored by 26 House members, aims to reduce abusive patent litigations through increased pleading standards and transparency provisions while still protecting legitimate property rights. During the hearing, a Manager’s Amendment was offered by Chairman Goodlatte which sought to address some concerns raised by the drug and biotech industries pertaining to use of the IPR proceeding to engage in market manipulation, as well as addressing the potential for abuse by parties engaging in extortion of patent owners by seeking pay-offs to not file IPR cases. Congresswoman Mimi Walters (D-CA) addressed these concerns more aggressively by offering an amendment that would carve out drug and biologic product patents from being eligible for inter partes review entirely. While Goodlatte strongly opposed including the amendment in the bill, he did offer support to continue working with Walters to ensure the IPR process is not abused, and Walters withdrew the amendment. After all amendments were considered and others withdrawn, a vote commenced on the Innovation Act, as amended, and was passed by a vote of 24- 8. Text of the entire bill can be found HERE. The online webcast of the markup can be found HERE. The Walters amendment can be found HERE.

Medical Device Tax Repeal Vote Expected in the House Next Week

The House Ways and Means Committee approved a bill last week that would repeal the 2.3% medical device excise tax. That legislation currently scheduled to be deliberated on the House floor the week of June 15. H.R. 160, the Protect Medical Innovation Act of 2015, was originally introduced by Representative Erik Paulsen (R-MN) and passed the committee by a 25‒14 vote. Updated text of H.R. 160 can be found HERE.

Senate HELP Committee Holds Hearing on Solutions to Improve Health Information Exchanges

On Wednesday, June 10, the Senate Health, Education, Labor and Pensions (HELP) Committee chaired by Lamar Alexander (R-TN) held a hearing entitled “Health Information Exchange: A Path Towards Improving the Quality and Value of Health Care for Patients.” The hearing featured testimony from various stakeholders in the health care information technology industry and marked the first of a series of hearings seeking ways to improve the electronic health record exchange and interoperability of health IT systems. Senator Richard Burr (R-NC) along with various other senators directed their questions to the witness panel on why the exchange and interoperability of electronic health records (EHR) data is so difficult. Several members of the panel noted limited resources, different business models, and market competition as complex factors that can deter the information exchange process. In the conclusion of the hearing, Chairman Alexander and Ranking Member Patty Murray (D-WA) announced that Senator Bill Cassidy, MD (R-LA) will chair the committee’s next hearing that focuses on improving physician experience with health IT, with Senator Sheldon Whitehouse (D-RI) serving as ranking member. The full hearing can be found HERE.

House Ways & Means Committee Holds Hearing on HHS FY16 Budget Request

On Wednesday, June 10, the House Ways & Means Committee chaired by Congressman Paul Ryan (R-WI) held a hearing on the fiscal year 2016 budget request for the Department of Health and Human Services and the implementation of the Affordable Care Act (ACA). The hearing featured testimony from the U.S. Department of Health and Human Services Secretary Sylvia Burwell, and largely focused on the upcoming Supreme Court decision in King v. Burwell. Chairman Ryan and other members of the committee asked Secretary Burwell how the Administration would respond if the Supreme Court invalidated the subsidies provided for certain customers in federally facilitated exchanges. In response, Burwell testified that if the court rules in favor of the plaintiff, it is the responsibility of Congress and the states to find a solution. She also stated that President Obama would reject any proposals which would repeal the ACA or any of its core elements. The full hearing can be found HERE.

House Drops Medicare Pay-For from Trade Bills; Bills Fail to Advance

On Thursday, June 11 and Friday, June 12, the House & President Obama attempted to secure support for a controversial trade package, H.R. 1314, containing two major sections: the Trade Assistance Adjustment (TAA) program – a program designed to help workers displaced by trade that is typically supported by Democrats; and Trade Promotion Authority (TPA) – a program granting the President the authority to finalize trade agreements with Pacific Rim nations and the European Union, typically supported by Republicans. These programs are usually considered together to create a bipartisan coalition, and their passage is essential to action on other pending trade agreements such as the Trans-Pacific Partnership Agreement (TPP).

The Senate passed H.R. 1314 with a provision paying for the TAA section via sequestration of $700 million in Medicare spending in FY 2024. This offset became increasingly unpopular with House Democrats and some Republicans, which led to an agreement between House Minority Leader Nancy Pelosi (D-CA) and Speaker John Boehner (R-OH) to remove the Medicare provision and insert a new offset regarding stricter tax enforcement. On Friday, the House moved to vote on each section of the bill, TPA and TAA, separately (excluding the Medicare provision). However, the typically staunch Democratic support for TAA imploded when organized unions urged rank and file Democrats to oppose this section. The House failed to pass TAA by a count of 126-302. The House then agreed to the TPA section of H.R. 1314, but without TAA the entire trade package was essentially defeated, thwarting the efforts by Obama and House Leadership. The Senate could take up TPA as a standalone measure, or the House may try again to pass TAA again. For now, the Medicare offset remains in H.R. 1314 due to the failure to pass an amended trade package without the offset on Friday.

Leak Shows Administration Stopped Supporting Drug & Device Pricing Provision in Trans-Pacific Partnership Agreement in December 2014

On Wednesday, June 10, WikiLeaks released a secret December 2014 draft of an annex to the Trans-Pacific Partnership Agreement (TPP) “Transparency Chapter.” The newly released section reveals that the Obama administration is no longer requesting language requiring national health authorities, both foreign and domestic, to consider “competitive market-driven” prices when determining reimbursements for drugs and devices under TPP. However, the leak shows U.S. negotiators are still pressing for language regarding reimbursement rates for drugs and medical devices that “appropriately value” each product’s therapeutic significance. The full document can be found HERE.

GA Health Care Director Testifies before House VA Committee on VA Antidepressant Prescribing and VA Suicide Data

On Wednesday, June 10, the Government Accountability Office (GAO) released the testimony of Randall Williamson, Director of Health Care for GAO, before a House Committee on Veterans’ Affairs Subcommittee on Oversight and Investigations hearing. The testimony addresses GAO’s November 2014 report examining the Department of Veterans Affairs’ (VA) monitoring of veterans with major depressive disorder (MDD) who were prescribed antidepressants, as well as the use of suicide data within the VA. The report found that the VA failed to comply with current clinical practice guideline (CPG) related to treatment of MDD with antidepressants. The report also found that the demographic and clinical data the VA collects on veteran suicides was not always complete or accurate. The GAO Health Care Director’s testimony is available HERE.

PCORI Issues Schedule Cyclical Funding Opportunities for 2015 and 2016

The Patient Centered Outcomes Research institute (PCORI) has issued a chart containing a schedule of its cyclical funding opportunities for 2015 to 2016 under each of its project categories, including Pragmatic Clinical Studies to Evaluate Patient-Centered Outcomes. In addition, the application deadline for the Spring 2015 Cycle of the Pragmatic Clinical Studies funding announcement is Friday, July 31 for research teams invited to submit full applications. The schedule is available HERE.

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