The Washington Weekly: April 10, 2015

As Senate Prepares for Action on SGR, CMS Issues Report Raising Concerns 

This week, many members of the Senate spent recess considering their upcoming plans for a vote on repealing the Sustainable Growth Rate (SGR) formula used when calculating physician reimbursement for Medicare patients. The Medicare Access and CHIP Reauthorization Act (H.R. 2) passed the House two weeks ago in a bipartisan vote, 392-37. Republicans in the Senate widely support the bill, but there have been concerns raised by Senate Democrats, including Senate Finance Committee Ranking Member Ron Wyden (D-OR). Wyden has said that while he plans on voting in favor of the bill next week, he along with other Democrats would like to see the bill provide funding for the Children’s Health Insurance Program (CHIP) program for four years instead of two. Other areas where Democrats will be looking to make changes include the bill’s abortion restriction and Medicare therapy cap amendments. The Centers for Medicare and Medicaid Services (CMS) has also expressed concerns over the bill, warning in a report released this week that the bill could create the same shortfalls in Medicare physician payments that the bill is intending to remedy. The report noted that when the bill’s 5%annual bonuses in physician payments expire as scheduled in 2024, a major payment cut for most physicians would follow the next year. The payment structure would also be troublesome in years with high inflation, according to the report. A full copy of H.R. 2 can be found HERE. The full CMS report on SGR can be found HERE.


FDA Finalizes Guidance on Expedited Approval Pathway for Devices 

On Thursday, April 9, the Food and Drug Administration’s (FDA) Center for Devices and Radiological Health (CDRH) finalized two guidance documents establishing the agency’s new Expedited Approval Pathway (EAP) for devices. The first guidance establishes the framework of the EAP: The EAP will rely on less evidence than would ordinarily be required for approval. In return, FDA will require the sponsor of the approval EAP device to conduct rigorous post-market surveillance and studies on its product, described in more detail in the second guidance discussing the EAP. This pathway will only be available to Premarket Approval (PMA) and de novo devices, although de novo applications will not qualify for the full scope of the EAP according to FDA. Furthermore, the device and sponsor will have to meet certain additional requirements to participate in the EAP. The guidance documents can be found HERE and HERE.


CMS Issues Final Call Letter and Medicare Advantage Rate Notice 

On Monday, April 6, the Centers for Medicare and Medicaid Services (CMS) released its “Announcement of Methodological Changes for CY 2016 for Medicare Advantage Capitation Rates and Part D and Part D Payment Policies and 2016 Call Letter.” According to the rate notice, CMS will increase Medicare Advantage (MA) payments by 1.25%. The MA payment increase is an adjustment from the projected decrease of 0.9% previously announced by CMS in February’s draft Call Letter. Additionally, CMS updated benefit parameters for Medicare Part D according to statutorily prescribed methodology and provided key program dates for CY 2016. CMS did not finalize its proposal to adjust certain Star Ratings measures to account for low income and dual-eligible beneficiaries, citing uncertainty about the long-term effects of such a change. The full text of the notice can be found HERE.


CMS Issues EHR Incentive Program Proposed Rule with Modifications to Meaningful Use for 2015-2017

On Friday, April 10, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule for the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs that would align Stage 1 and Stage 2 goals and measures with the long-term proposals for Stage 3. For example, the rule would change the reporting period in 2015 to a 90-day period to align with the calendar year. The rule also aims to streamline the program by removing reporting requirements on measures that have become redundant or have topped out. CMS is accepting comments through June 15. The proposed rule is available HERE.


House & Senate Budget Negotiators Begin Deliberations

 On Thursday, April 9, Congressman Tom Price, MD (R-GA) and Senator Mike Enzi (R-WY), Chairmen of the House and Senate Budget Committees, returned to DC to begin discussions ironing out differences between the budges passed by their respective chambers. Both plans balance the budget in a decade by cutting about $5 trillion, without raising taxes, and add nearly $96 billion to the Pentagon’s budget through a war-funding account not subject to current spending caps. However, the two plans differ on future domestic spending amounts, Medicare spending reforms, and how to use a procedural tool known as reconciliation that allows the Senate to pass a bill with a simple majority vote instead of the typical 60-vote threshold. This lower threshold would allow Congressional Republicans to pass a repeal of the Affordable Care Act (ACA) and send it to President Obama’s desk for the first time since its passage. However, this repeal vote would largely be symbolic as President Obama would almost assuredly veto the measure.


House and Senate Announce Hearings on the Medical Device Tax

On Wednesday, April 15, the Senate Joint Economic Committee, chaired by Senator Dan Coats (R-IN) will hold a hearing entitled “Small Business, Big Taxes: Are Taxes Holding Back Small Business growth?” Not only is the hearing expected to discuss several tax burdens on small companies, but Senator Coats’ staff has indicated the medical device tax will be discussed at the hearing. Moreover, Mr. Thomas Hoghaug, CEO of both Signus Medical and Lockdown Surgical – two small medical device companies, will be one of the witnesses for the hearing. More information about the hearing can be found HERE.

On Thursday, April 23, the Senate Finance Subcommittee on Health Care, chaired by Senator Pat Toomey (R-PA) will hold a hearing entitled “A Fresh Look at the Impact of the Medical Device Tax on Jobs, Innovation, and Patients.” The hearing will seek to address the negative consequences the medical device tax has placed on research and development (R&D), medical innovation, and patient access to important technologies and treatments. Expected witnesses for the hearing include: Bruce Heugel, CFO of B Braun Medical; Quinton Farrar, former head of R&D for Smiths Medical; and Justin Minyard, a retired First Sergeant in the U.S. Army. Interesting to note, Senate Finance Committee Ranking Member Ron Wyden (D-OR) expressed concern with the hearing being held at the subcommittee level and called for a full committee hearing on the subject in the near future.  More information about the upcoming Health Care Subcommittee hearing can be found HERE.


House Republicans Release April Legislative Agenda

On Thursday, April 9, House Majority Leader Kevin McCarthy released the House of Representatives’ legislative agenda for the month of April. Starting April 13 the House will focus on a variety tax bills and the Internal Revenue Service (IRS) accountability. However, H.R. 160, Erik Paulsen’s (R-MN) repeal of the medical device tax, is not currently listed on the agenda. Subsequently, the House will shift its attention to cybersecurity. Various committees will be working on legislation that seeks to secure cyber networks and prevent data breaches. The final weeks of the month will be directed towards two appropriation bills, Military Construction/Veteran Affairs and Energy and Water Development, and oversight issues concerning former Secretary of State, Hillary Clinton. The full April agenda can be found HERE.


CMS Issues Mental Health Parity Proposed Rule for Medicaid and CHIP 

On Monday, April 6, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule that would apply certain provisions of the Mental Health Parity and Addiction Equity Act of 2008 to Medicaid and Children’s Health Insurance Program (CHIP). The law requires health plans that provide behavioral health care coverage to do so with the same terms covering medical and surgical care. The proposed rule would apply the law to Medicaid enrollees who receive services through managed care organizations and alternative benefit plans, as well as to all CHIP participants regardless of whether their care is provided through fee-for-service or managed care. The proposed rule can be viewed HERE.