This Week in Washington: Congress is in recess next week.

Upcoming Hearings/Markups

Congress

Hearings/Markups

• House Ways and Means Committee: “Protecting Patients from Surprise Medical Bills“
• House Committee on Energy and Commerce: “Improving Drug Pricing Transparency and Lowering Prices for American Consumers”
• House Budget Committee: “Key Design Components and Considerations for Establishing a Single-Payer Health Care System”

House

• Energy and Commerce, Ways and Means Committees Release Bipartisan Discussion Draft Legislation on Medicare Part D Drug Pricing
• Ways and Means Committee Asks HHS, GAO to Review Maternal Health Programs, Data

Senate

• HELP Committee Releases Bipartisan Discussion Draft Legislation to Reduce Health Care Costs
• GAO Makes MedPAC and MACPAC Appointments
• Republican Senators Ask FDA to Expand Scope of Drug Parallel Track
• Senate Finance Considers Reworking Part D Catastrophic to Control Prescription Drug Prices; Legislative Negotiations with Administration on Hold

Administration

• Trump Administration Delays Next Steps for International Pricing Index, Rebate Rule
• CMS: RFI to Spur State Interest in Eased 1332 Waiver Criteria 

Final Regulations

• CMS Finalizes Drug Pricing Rule, Omits Price Concessions
• CMS Finalizes Rule to Protect Medicaid Provider Payments
• FDA Finalizes Guidance on Interchangeable Biologics

Proposed Regulations

• CMS: Fiscal Year (FY) 2020 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Acute Care Hospital (LTACH) Prospective Payment System
• CMS Proposes Fiscal 2020 Pay Rates for Inpatient Psychiatric Facilities
• CMS Proposes Boosting Payments to Inpatient Rehabilitation Facilities
• ONC/CMS: Interoperability; Exceptions to Information Blocking
• FDA: Quality Considerations for Continuous Manufacturing

Reports

• GAO: VA Health IT - Use of Acquisition Best Practices Can Improve Efforts to Implement a System to Support the Family Caregiver Program

Upcoming Hearings/Markups

TBA

House Ways & Means Committee:  Hearing on Single-Payer Issue

The House Ways & Means Committee will hold a hearing on the single-payer issue, marking the first time in decades that one of the two main health care committees of jurisdiction will hold a hearing on the topic. The other health care panel, the House Energy and Commerce Committee, has so far declined to commit to holding a hearing on the issue. The House Rules Committee held a hearing on Medicare for All last week. The date of the hearing has yet to be announced.

Congress

Hearings/Markups

House Ways and Means Committee: “Protecting Patients from Surprise Medical Bills”

Tuesday, May 21, 2019: The House Ways and Means Committee held a hearing on surprise medical billing, following an announcement from the Trump administration urging Congress to focus on the issue.

Why this is important: Witnesses held consensus that patients should be kept out of price disputes between health care providers and insurers. There was agreement that federal involvement in states should be capped at those that qualify under the Employee Retirement Income Security Act of 1974 (ERISA) only. The American Hospital Association (AHA) reiterated that health care rates should not be set under any circumstance, even in rural areas with varying geographical factors, and that price talks should remain between the insurer and hospitals.

On the topic of transparency, America’s Health Insurance Plans (AHIP) reminded the committee members that while transparency is vital to patients, it is not helpful in surprise medical billings situations related to emergency care.

Find witness testimonies, live feed and other information here.

House Committee on Energy and Commerce: “Improving Drug Pricing Transparency and Lowering Prices for American Consumers”

The House Committee on Energy and Commerce will hold a hearing on drug pricing transparency and prescription drug costs, another hearing in a series.

Why this is important: While the legislation up for consideration is bipartisan, Republican members of the subcommittee had concern over H.R. 2064, with fear that new reporting requirements could serve as a deterrent for manufacturers to provide samples to physicians. Republican members were also concerned over H.R. 2296, the Fair Accountability and Innovative Research Drug Pricing Act, making it more challenging for drug manufacturers to increase the price of a qualifying drug, because the bill makes the manufacturers wait 30 days to do so.

The legislation considered:

• H.R. 2296, the Fair Accountability and Innovative Research Drug Pricing Act or the “FAIR Drug Pricing Act,” sponsored by Reps. Schakowsky (D-IL) and Rooney (R-FL)

• H.R. 2069, Stopping the Pharmaceutical Industry from Keeping Drugs Expensive Act, or the “SPIKE Act,” introduced by Reps. Horsford (D-NV) and Reed (R-NY)

• H.R. 2087, the Drug Price Transparency Act, introduced by Reps. Doggett (D-TX) and Buchanan (R-FL)

• H.R. 2115, the Public Disclosure of Drug Discounts Act, sponsored by Reps. Spanberger (D-VA), Arrington (R-TX) and Boyle (D-PA)

• H.R. 2376, the Prescription Pricing for the People Act of 2019, introduced by Reps. Nadler (D-NY) and Collins (R-GA)

• H.R. 2064, the Sunshine for Samples Act of 2019, introduced by Reps. Chu (D-CA) and Nunes (R-CA)

• H.R. 2757, the Creating Lower Cost Alternatives for Your Prescription Drugs Act, introduced by Reps. Cunningham (D-SC) and Bilirakis (R-FL)

Find witness testimonies, live feed and other information here.

House Budget Committee: “Key Design Components and Considerations for Establishing a Single-Payer Health Care System”

Wednesday, May 22, 2019:  The House Budget Committee held a hearing on designing a single-payer health system, with three analysts from the Congressional Budget Office (CBO) testifying about the recent CBO report outlining considerations Congress should take on the topic. Find witness testimonies, live feed and other information here.

Why this is important: The hearing did not focus on any specific Medicare-for-All proposals and instead addressed design components and issues associated with moving toward a single-payer system. House Budget Committee Chairman John Yarmuth (D-KY) said at the outset that he wanted the hearing to focus on what services would be covered, how a single-payer system would be financed and what the transition period would look like. Consensus between CBO officials and committee members was that the transition itself, despite its outcome, would be disruptive. 

House

Energy and Commerce, Ways and Means Committees Release Bipartisan Discussion Draft Legislation on Medicare Part D Drug Pricing

On May 23, Ways and Means Committee Chairman Richard Neal (D-MA) and Energy and Commerce Committee Chairman Frank Pallone (D-NJ), along with Ranking Members Kevin Brady (R-TX) and Greg Walden (R-OR) announced the solicitation for comments on draft legislation to reform and improve the Medicare Part D program that would establish an out-of-pocket cap for Medicare beneficiaries.

The committee is requesting comments on the discussion draft, due by close of business June 6, 2019. Comments should be submitted to PartDImprovements@mail.house.gov.

The proposal would increase insurers’ share of enrollees’ Part D catastrophic drug spending from 15 percent to 80 percent over four years.  Currently, once a Medicare beneficiary’s out of pocket costs hit $5,100, they enter the catastrophic coverage stage.  At that point, they pay 5 percent of drug costs, insurers pay 15 percent of the cost and Medicare pays 80 percent. The plan does not include drug price negotiations.

Find more information on feedback needed here.

Read the draft bill here.

Ways and Means Committee Asks HHS, GAO to Review Maternal Health Programs, Data

On May 21, House Ways & Means Committee Chairman Richard Neal (D-MA) and Ranking Member Kevin Brady (R-TX) sent a letter to the Department of Health and Human Services (HHS) Secretary Alex Azar asking that he provide them with a full review of HHS’s programs that combat maternal mortality and a request to the Government Accountability Office (GAO) for a report on maternal mortality data. The committee held a hearing earlier this month on maternal mortality and social determinants of health.

Find the letter to HHS here.

Find the letter to GAO here.

Senate

HELP Committee Releases Bipartisan Discussion Draft Legislation to Reduce Health Care Costs

On May 23, Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA) released the Lower Health Care Costs Act of 2019, a bipartisan discussion draft legislation to reduce health care costs. The committee is requesting comments on the discussion draft, due by 5 PM on June 5, 2019. Comments should be submitted to LowerHealthCareCosts@help.senate.gov.

The proposal would prohibit PBMs from engaging in spread pricing, or charging a health plan, patient or plan sponsor more for a drug than the PBM paid to acquire it. Under the practice, usually used for generic drugs, the PBM reimburses pharmacies less than what it charges health plans for a medicine — and pockets the difference.

The draft also would require PBMs to pass on 100 percent of any rebates or discounts they negotiate with drug companies to insurers.  In addition, the proposal would give health care claims data from self-insured plans, Medicare and participating states to a nongovernmental, nonprofit entity for analysis. The organization would create custom reports for employers, and employee organizations and it would give grants to states to implement similar transparency plans.

Read the draft bill here.

GAO Makes MedPAC and MACPAC Appointments

On May 20 and 23, the Government Accountability Office (GAO) announced appointments to the Medicare Payment Advisory Commission (MedPAC) and the Medicaid and CHIP Payment and Access Commission (MACPAC).

MedPAC Appointments:

• Paul B. Ginsburg, Ph.D., (appointed vice chair) Leonard Schaeffer Chair in Health Policy Studies, Brookings Institution, Washington, D.C., and professor of Health Policy, University of Southern California.

• Lawrence Casalino, M.D., Ph.D., the Livingston Professor of Public Health and chief of the Division of Healthcare Policy and Economics in the Weill Cornell Department of Healthcare Policy and Research. Term expires April 2022.

• Amol Navathe, M.D., Ph.D., co-director of the Healthcare Transformation Institute and associate director of the Center for Health Incentives and Behavioral Economics in the Department of Medical Ethics and Health Policy, at the University of Pennsylvania School of Medicine. Term expires April 2022.

• The reappointed members, whose terms will also expire in April 2022, are Brian DeBusk, Ph.D., CEO, DeRoyal Industries; Paul B. Ginsburg, Ph.D.; Bruce Pyenson, FSA, MAAA, principal and consulting actuary, Milliman Inc; and Pat Wang, J.D., CEO, Healthfirst, New York, NY.

MACPAC Appointments:

• Melanie Bella, MBA, (appointed commission chair), current MACPAC commissioner, is head of Partnerships and Policy at Cityblock Health.

• Charles Milligan, J.D., M.P.H., (appointed commission vice chair), current MACPAC commissioner, is the national Dual Eligible Special Needs Plans executive director for UnitedHealthcare Community & State.

• Thomas Barker, Esq., partner at Foley Hoag, LLP, specializes in Medicaid and Medicare regulatory, coverage and reimbursement issues and is a member of the Executive Committee.

• Tricia Brooks, MBA, associate research professor at the McCourt School of Public Policy at Georgetown University and a senior fellow at the Georgetown University Center for Children and Families (CCF).

Find the press release for MedPAC here.

Find the press release for MACPAC here.

Republican Senators Ask FDA to Expand Scope of Drug Parallel Track

On May 17, Sens. Rand Paul (R-KY), Ted Cruz (R-TX), Mike Lee (R-UT) and Mike Braun (R-IN) sent a letter to Food and Drug Administration (FDA) Acting Commissioner Ned Sharpless calling for the expansion of access to investigational drugs to treat Alzheimer’s, cancer and amyotrophic lateral sclerosis (ALS) by widening the scope of a generations-old Parallel Track program. The program currently grants only patients with AIDS and other HIV-related diseases access to certain drugs that are deemed safe but have not completed FDA efficacy trials.

Find the letter here.

Senate Finance Considers Reworking Part D Catastrophic to Control Prescription Drug Prices; Legislative Negotiations with Administration on Hold

On May 17, Senate Finance Committee Chair Chuck Grassley said committee members are considering a rework of financial liability in the catastrophic phase of Medicare Part D to help curb rising drug prices. Grassley wants to have a bipartisan deal on drug-pricing legislation by June 17. The focus has grown on prescription drug costs with a public disagreement between President Trump and House Speaker Nancy Pelosi (D-CA) on May 22, as Pelosi tried to get the administration to join a Medicare-price-bargaining plan that sets a third-party arbiter as a backstop. President Trump responded that legislative negotiations on drug pricing are on hold until Democrats stop investigations into his potential role in his campaign’s ties to Russia and into other actions he has taken while in office.

Administration

Trump Administration Delays Next Steps for International Pricing Index, Rebate Rule

On May 22, the Trump administration released the Department of Health and Human Services’ (HHS) spring regulatory agenda that announced the proposal to base Medicare Part B pay rates on foreign drug prices and its overhaul of the rebate system is set to be released later than expected this summer. The International Pricing Index model will be proposed in Aug. 2019.

CMS will also release a final rule in Nov. 2019 that requires that rebates be passed through to consumers in Medicare Part D and Medicaid managed care. The rule banning drug rebates will not be published before bids from Medicare Part D plans and Medicaid managed care plans are due June 3.

Find the HHS Spring Regulatory Agenda here.

CMS: RFI to Spur State Interest in Eased 1332 Waiver Criteria

On May 3, the Centers for Medicare and Medicaid Services (CMS) and the Department of the Treasury released a request for information (RFI) asking for ideas on how to entice states to apply for Affordable Care Act 1332 waivers that take advantage of the more-flexible criteria set by the Trump administration last fall. Only eight states requested waivers under the Obama administration era’s guidance and all but one of those was to create a state-based reinsurance program. No states have requested waivers under the Trump administration’s updated guidance so far.

Find the RFI here.

Final Regulations

CMS Finalizes Drug Pricing Rule, Omits Price Concessions

On May 16, the Centers for Medicare and Medicaid Services (CMS) issued a final rule on the Medicare Advantage and Part D programs. The final rule allows Medicare Advantage plans to negotiate better prices for physician-administered medicines in Part C, and requires Part D plans to adopt tools that provide clinicians with information that they can discuss with patients on out-of-pocket costs for prescription drugs at the time a prescription is written.

CMS omitted the proposal allowing insurers to exclude certain drugs if prices rise faster than inflation. Instead, the final rule leaves in place the current policy about Medicare’s “protected classes” of drugs. Under current law, private Medicare health plans are required to cover all or “substantially all” drugs in six “protected” classes, such as HIV treatments, antidepressants, drugs to treat epileptic seizures and cancer drugs, regardless of cost.

Find the final rule here.

CMS Finalizes Rule to Protect Medicaid Provider Payments

On May 2, the Centers for Medicare and Medicaid Services (CMS) released the Medicaid Provider Reassignment Regulation final rule removing a state’s ability to divert portions of Medicaid provider payments to third parties outside of the scope of what the statute allows. The intention of the final rule is to ensure that providers receive their complete payment, and that any circumstance where a state redirects part of a provider’s payment is clearly allowed under the law.

Find the final rule here.

FDA Finalizes Guidance on Interchangeable Biologics

On May 10, the Food and Drug Administration (FDA) finalized guidance on interchangeable biologics in an attempt to make it easier for biosimilar manufacturers to develop, and for patients to be able to purchase, more affordable prescription drugs. According to the final guidance, interchangeable biologics are now automatically substituted at the pharmacy counter like a generic drug. Once an application or supplement seeking licensure as an interchangeable product is submitted, the FDA will approve the biological product as interchangeable with the reference product if the information submitted in the application or the supplement is sufficient to meet the applicable statutory standard.

Find the final guidance here.

Proposed Regulations

CMS: Fiscal Year (FY) 2020 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Acute Care Hospital (LTACH) Prospective Payment System

On April 23, 2019, the Centers for Medicare and Medicaid Services (CMS) proposed to update Medicare payment policies for hospitals under the Inpatient Prospective Payment System (IPPS) and the Long-Term Acute Care Hospital (LTACH) Prospective Payment System (PPS) for fiscal year 2020. The proposals include a raise in pay for low-wage hospitals by cutting pay for high-wage hospitals, as part of the reforms to the hospital wage index, as well as raising the add-on pay for new technology and providing a path for breakthrough devices approved by the Food and Drug Administration (FDA) to access add-on payments. CMS also proposed policy changes to increase significantly Medicare pay to hospitals for administering expensive chimeric antigen receptor T-cell (CAR-T) cancer drugs and make it easier for hospitals to get the maximum possible reimbursement for administering the CAR-T cell therapies.

Find the bundled proposals here.

CMS Proposes Fiscal 2020 Pay Rates for Inpatient Psychiatric Facilities

On April 17, 2019, the Centers for Medicare and Medicaid Services (CMS) proposed to modify the market basket used to calculate inpatient psychiatric facility payments. The rule would use 2016 instead of 2012 as a base year and add a new claims-based measure to the Inpatient Psychiatric Facility Quality Reporting Program starting in FY 2020.

The proposal increases Medicare payments to inpatient psychiatric facilities by 1.7 percent in fiscal year 2020 while adding a new quality measure intended to assess whether patients with certain diagnoses are filling their prescriptions after being discharged from such facilities. Comment period ends on June 17, 2019.

Find the proposed rule here.

CMS Proposes Boosting Payments to Inpatient Rehabilitation Facilities

On April 17, 2019, the Centers for Medicare and Medicaid Services (CMS) proposed a rule to update Medicare payment policies for facilities under the Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS) and the Inpatient Rehabilitation Facility Quality Reporting Program (IRF QRP) for fiscal year (FY) 2020.

CMS is proposing to raise the estimated payments per discharge for inpatient rehabilitation facilities in federal fiscal year 2020 by 2.3 percent, or $195 million, compared to 2019. The proposal could boost payments in urban areas by 2.2 percent and rural areas by 4.3 percent compared to the year before. Comment period ends on June 27, 2019.

Find the proposed rule here.

ONC/CMS: Interoperability; Exceptions to Information Blocking

On Feb. 11, the Centers for Medicare and Medicaid Services (CMS) and the Office of the National Coordinator (ONC) released proposed rules to support secure access, exchange and use of electronic health information. The Interoperability and Patient Access Proposed Rule from CMS outlines opportunities to make patient data more useful and transferable through open, secure, standardized and machine-readable formats while reducing restrictions on health care providers. The ONC rule calls on the health care industry to adopt standardized application programming interfaces (APIs), which will allow individuals to securely and easily access structured electronic health information (EHI) using smartphone applications.

In addition to the policy proposals, CMS released two requests for information (RFIs) to obtain feedback on interoperability and health information technology (health IT) adoption in post-acute care (PAC) settings, and the role of patient matching in interoperability and improved patient care. Comment period ends on June 3, 2019.

Read the proposed rule and submit comments here.

FDA: Quality Considerations for Continuous Manufacturing

On Feb. 26, the Food and Drug Administration (FDA) released a draft guidance on what factors brand and generic drug manufacturers should consider when setting up and using a continuous manufacturing system to produce their products. The guidance outlines the benefits of continuous manufacturing over traditional batch manufacturing, including the efficiency that comes with continuous manufacturing that could eventually lead to lower drug prices for consumers.

Comment period ends on May 28, 2019; comments can be submitted here.

Find the draft guidance here.

Reports

GAO: VA Health IT - Use of Acquisition Best Practices Can Improve Efforts to Implement a System to Support the Family Caregiver Program

On May 22, the Government Accountability Office (GAO) released a report further discussing its September 2014 report that examines the Family Caregiver Program, established by the Veterans Administration (VA) in 2011 to help families provide care to seriously injured veterans. It developed an IT system to help it run this program but the system has issues that the GAO reported in 2014, including that the system does not provide the VA with data that would allow monitoring of how the program affects its medical centers’ resources.

The GAO testified and recommended in 2014 that the VA expedite the process for identifying and implementing an IT system that would fully support the Family Caregiver Program. The VA concurred with the recommendation and subsequently began taking steps to implement a replacement system. The recommendation remains open.

Find the full report here.

Note: The Weekly Washington newsletter will return with the next update on June 10, 2019.

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Stephanie Kennan, Senior Vice President
Mariam Eatedali, Research Associate

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