Jun 19

The Washington Weekly: June 19, 2015

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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.