Washington Healthcare Update - December 2019 #3

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This Week in Washington: The House and Senate are out of session until the new year.

Congress

House

  • House Passes USMCA Trade Deal
  • House Votes to Impeach President Trump

Senate

  • Senate Passes Spending Bills to Avoid Government Shutdown

Administration

  • FDA and HHS: Proposed Rule on Canadian Drug Importation Plan
  • CMS and HRSA: Two Proposed Rules for Organ Procurement Organizations (OPOs)

Final Regulations/Guidance

  • CMS Issues the Exchange Program Integrity Final Rule
  • CMS: Hospital Price Transparency Requirements: CY 2020 Hospital Outpatient Prospective Payment System (OPPS) Policy Changes

Proposed Regulations/Guidance

  • OIG: Revisions to Safe Harbors Under the Anti-Kickback Statute, Etc.
  • CMS: Transparency in Coverage Proposed Rule
  • CMS Releases Kidney Care Choices Model Request for Application
  • CMS: Modernizing and Clarifying the Physician Self-Referral Regulations (Stark Law Rule)
  • CMS: Proposed Radiation Oncology (RO) Model
  • FDA: Draft Guidance on Best Practices in Drug and Biological Product Postmarket Safety Surveillance for FDA Staff
  • FDA: Draft Guidance on Developing Drugs for Hepatitis D Infection
  • FDA: Drug Products Labeled as Homeopathic Guidance
  • FDA: Patient-Focused Drug Development: Methods to Identify What Is Important to Patients’ Guidance

Courts

  • Fifth Circuit Court Rules ACA’s Individual Mandate is Unconstitutional

Reports

  • GAO: Drug Control — The Office of National Drug Control Policy Should Develop Key Planning Elements to Meet Statutory Requirements
  • GAO: Health Care Workforce — Views on Expanding Medicare Graduate Medical Education Funding to Nurse Practitioners and Physician Assistants
  • GAO: Mental Health and Substance Use — State and Federal Oversight of Compliance with Parity Requirements Varies

Congress

House

House Passes USMCA Trade Deal

On Dec. 19, the House passed H.R. 5430, the U.S., Mexico and Canada trade deal. Senate Majority Leader Mitch McConnell announced a Senate vote on the new North American trade deal would happen in 2020, after the impeachment trial for President Trump in January. The deal removes 10-year patent exclusivity for biologics that was in the original agreement and removes patent evergreening.

House Votes to Impeach President Trump

On Dec. 18, the House voted 230-197 to charge President Trump with abuse of power, and 229-198 with obstruction of Congress. Democratic Reps. Collin Peterson and Jeff Van Drew, who is expected to switch to the Republican Party, voted against impeachment. President Trump is officially impeached, and a trail in the Senate is expected in January 2020.

Senate

Senate Passes Spending Bills to Avoid Government Shutdown

On Dec. 19, the Senate passed two spending bills, to fund the government until October 2020. Both bills have already passed the House. The president is expected to sign them. In the first bill considered, several Medicare and Medicaid extenders would be funded through May 22. The bill also delays the Medicaid Disproportionate Share Hospital (DSH) pay cuts through May of next year. The proposal did not include surprise billing legislation. The extensions of some provisions until May provides an opportunity for a Medicare bill in May which may have other legislation attached to it.

The bill includes provisions that would delay commercial pay data reporting until 2021 and require Congress’s Medicare payment advisors to study how the Centers for Medicare and Medicaid Services (CMS) has implemented the Protecting Access to Medicare Act, aimed at basing Medicare pay rates for lab tests on commercial rates. The spending deal includes the delay in data reporting and would give the Medicare Payment Advisory Commission (MedPAC) 18 months to look at how CMS has implemented the private-payer–based lab fee schedule for Medicare.

It also included repeal of several taxes from the Affordable Care Act: the Medicare device tax, the “Cadillac tax” and the Health Insurance tax.

Administration

FDA and HHS: Proposed Rule on Canadian Drug Importation Plan

On Dec. 18, the Food and Drug Administration (FDA) and the Department of Health and Human Services (HHS) released a draft guidance on the importation of certain prescription drug imports from Canada, leaving out many specialty medications and other therapies for chronic disease that cost patients the most. The FDA seeks request for comment on two importation pathways. One would allow states to submit proposals to the FDA to allow the importation of small molecule brand-name medicines sold at retail pharmacies, typically ones that have rebates attached to them. The draft guidance for industry lets manufacturers import the same versions of FDA-approved drugs they now sell in foreign countries. Under this second pathway, drug manufacturers would use a new National Drug Code (NDC) and sell these drugs in the U.S. at a cheaper price.

Find the proposed rule here.

Find the guidance for industry here – comments are due by March 5, 2020.

CMS and HRSA: Two Proposed Rules for Organ Procurement Organizations (OPOs)

On Dec. 17, two rules were proposed related to organ procurement organizations (OPOs), specifically on performance standards and the promotion of donations from living donors.

The first rule, by the Centers for Medicare and Medicaid Services (CMS), holds OPOs accountable for meeting specific performance metrics. The rule uses federal death records, which show the entire pool of potential organ donors, to calculate an OPO’s donation and transplantation rates. In addition, the proposed rule would require all OPOs to meet the donation and transplantation rates of the current top 25 percent of OPOs. CMS will be able to rank the OPOs based on their performance and make that data public, assessing them annually through a re-certification cycle.

Find the CMS rule here.

The second rule, by the Health Resources and Services Administration (HRSA) attempts to eliminate financial burden on living donors. The proposed rule would allow insurers to reimburse living donors for lost wages, as well as any child care or elder care expenses they incurred during their hospitalizations for or recoveries from the donation.

Find the HRSA rule here.

Final Regulations/Guidance

CMS Issues the Exchange Program Integrity Final Rule

On Dec. 20, the Centers for Medicare & Medicaid Services (CMS) issued the Exchange Program Integrity Final Rule that implements policies aimed at protecting taxpayer dollars by ensuring that exchange enrollees are accurately determined eligible for premium subsidies.

The final rule addresses several recommendations from the Office of Inspector General (OIG) and the Government Accountability Office (GAO). Those recommendations addressed issues such as weaknesses in the process for determining eligibility for advance payments of the premium tax credit (APTC) and cost-sharing reductions (CSRs) in both the state and federal exchanges. To address this issue, the rule strengthens programmatic oversight of SBE program reporting requirements to confirm states are correctly identifying eligible enrollees, including those who are qualified for APTC and CSRs.

The rule also implements safeguards regarding the eligibility and enrollment process across all exchanges, including SBEs, state-based exchanges on the federal platform (SBE-FPs) and federally facilitated exchanges (FFEs). This includes enhanced periodic data matching that will allow CMS to more frequently identify and resolve issues related to consumers who are dually enrolled in both Medicare and a QHP through the exchange. This will ensure that people are enrolled in the most appropriate type of coverage for them. Beginning with plan year 2020, CMS will require SBEs to conduct Medicare, Medicaid/CHIP and, as applicable, Basic Health Plan periodic data matching at least twice a year for QHP enrollees who receive subsidies.

View the fact sheet

View the final rule (CMS-9922-F)

CMS: Hospital Price Transparency Requirements: CY 2020 Hospital Outpatient Prospective Payment System (OPPS) Policy Changes

On Nov. 15, the Centers for Medicare and Medicaid Services (CMS) finalized policies that follow directives in President Trump’s executive order entitled “Improving Price and Quality Transparency in American Healthcare to Put Patients First.” The rule requires facilities to disclose currently confidential rates they have negotiated with insurers, what the hospital is willing to accept from a patient and the minimum and maximum negotiated charges. The requirement would apply for all items and services and be available online in a single data file.

Hospitals will have to post that information online for 300 common services in an easily understandable format. CMS will specify 70 of these services, and the rest can be chosen by the hospitals. Hospitals that do not comply could face fines of up to $300 per day.

Find the final rule here.

In response to comments, CMS is extending the effective date to Jan. 1, 2021, to ensure hospital compliance with these regulations.

Proposed Regulations/Guidance

OIG: Revisions to Safe Harbors Under the Anti-Kickback Statute, Etc.

On Oct. 9, the Department of Health and Human Services Office of Inspector General (OIG) proposed a rule that creates three new safe harbors for certain remuneration exchanged between or among eligible participants: care coordination arrangements aimed at improving quality and outcomes; value-based arrangements with substantial downside financial risk; and value-based arrangement with full financial risk. Modifications to existing AKS safe harbors include more flexibility for part-time and outcomes-based arrangements, removing the part-time schedule requirement and the aggregate compensation set-in-advance requirement. Modifications were also made to expand and modify mileage limits to rural areas and for transportation of patients discharged from inpatient facilities. As for electronic health records, the proposal extends the interoperability provision.

Find the proposed rule here.

Public comments must be submitted by Dec. 31, 2019.

CMS: Transparency in Coverage Proposed Rule

On Nov. 15, the Centers for Medicare and Medicaid Services (CMS) proposed a rule with the Department of Labor and the Department of the Treasury to implement President Trump’s executive order on Improving Price and Quality Transparency in health care.

The rule proposes to make each non-grandfathered group health plan or health insurance issuer offering non-grandfathered health insurance coverage in the individual and group markets be required to make available to participants, beneficiaries and enrollees (or their authorized representative) personalized out-of-pocket cost information for all covered health care items and services through an internet-based self-service tool and in paper form upon request. The same plans would be required to make available to the public the in-network negotiated rates with their network providers and historical payments of allowed amounts to out-of-network providers through standardized, regularly updated machine-readable files. This would provide opportunities for innovation to drive price comparison and consumerism in the health care market.

This proposed rule also solicits comments on:

  • Whether group health plans and health insurance issuers should also be required to make available through a standards-based application programming interface (API) the cost-sharing information referenced above that is proposed to be disclosed through the internet-based self-service tool and the machine-readable files.
  • How health care quality information can be incorporated into the price transparency proposals included in these proposed rules.

Find the proposed rule here.

CMS Releases Kidney Care Choices Model Request for Application

On Oct. 24, the Center for Medicare and Medicaid Innovation (Innovation Center) announced that the request for applications (RFA) for the Kidney Care Choices (KCC) Model has been posted here. The deadline to submit an application is Jan. 22, 2020.

The KCC Model is a voluntary model to reduce Medicare expenditures while preserving or enhancing quality of care for beneficiaries with end-stage renal disease (ESRD) and chronic kidney disease (CKD). The KCC Model contains the following four options:

  1. The CMS Kidney Care First (KCF) option
  2. The Comprehensive Kidney Care Contracting (CKCC) Graduated option
  3. The CKCC Professional option
  4. The CKCC Global option

Stay up to date on the latest Kidney Care Choices Model news and updates by subscribing to the KCC Model listserv.

CMS: Modernizing and Clarifying the Physician Self-Referral Regulations (Stark Law Rule)

On Oct. 9, the Centers for Medicare and Medicaid Services (CMS) proposed a rule that will create new, permanent exceptions to the Stark Law for value-based arrangements. These exceptions would apply broadly to care provided to all patients, not just Medicare beneficiaries. The proposed rule requires health care entities to provide written documentation that explains arrangements and patient populations being targeted, and the outcomes being measured in terms of value. There is a new exception to protect compensation not exceeding an aggregate of $3,500 per calendar year if certain conditions are met, for limited remuneration to a physician.

There is also a new exception for cybersecurity technology and related services, where CMS proposes protecting arrangements involving the donation of certain cybersecurity technology and related services. Modifications to compensation exceptions were added. The rules include the expansion of the 90-day grace period for writing requirements. CMS proposed the deletion of goal posts for when an entity knows the period of disallowance ended. And, the proposal includes modifying the physician contribution requirement to the electronic health records’ conditions and allowing certain donations of replacement technology.

CMS is soliciting comments about the role of price transparency in the context of the Stark Law and whether to require cost-of-care information at the point of a referral for an item or service.

Find the proposed rule here.

Public comments must be submitted by Dec. 31, 2019.

CMS: Proposed Radiation Oncology (RO) Model

On July 10, the Centers for Medicare and Medicaid Services (CMS) proposed a Radiation Oncology (RO) Model as a payment model that tests if site-neutral payments, in which providers are paid the same rate no matter the care setting, for a 90-day episode of care, can improve the quality of treatment and save Medicare money. The experiment targets radiation treatment for 17 different types of cancer. Payment will be based on proposed national base rates and trend factors and will be adjusted for geography and the mix of patients the provider treats.

Participants in the model could earn back a share of dollars that are withheld based on the quality of care and patient experience. The model is scheduled to begin next year and end in December 2024.

Find the proposed rule here.

FDA: Draft Guidance on Best Practices in Drug and Biological Product Postmarket Safety Surveillance for FDA Staff

On Nov. 6, the Food and Drug Administration (FDA) released a draft guidance on best practices for drug safety surveillance, made available to the public in compliance with requirements of the 21st Century Cures Act. The draft guidance outlines the FDA’s approach for timely postmarket analyses of drugs and biologics, and includes a high-level overview of tools, methods and signal detection and evaluation activities, using varied data sources, for drug safety surveillance to provide a broader context and a general overview of our overarching effort and commitment in this area.

Find the draft guidance here. Public comments are due by Jan. 6, 2020.

FDA: Draft Guidance on Developing Drugs for Hepatitis D Infection

On Nov. 1, the Food and Drug Administration (FDA) released a draft Chronic Hepatitis D Virus Infection: Developing Drugs for Treatment Guidance. The draft guidance will assist sponsors in the clinical development of drugs for the treatment of chronic hepatitis D virus (HDV) infection. HDV infection occurs only in people who have hepatitis B virus (HBV) infection.

The draft guidance addresses the FDA’s current recommendations regarding the overall development program and clinical trial designs for the development of drugs and biologics for the treatment of chronic HDV infection. Sponsors are encouraged to communicate with the FDA Center for Drug Evaluation and Research’s Division of Antiviral Products (DAVP) about the development of drugs to treat HDV infection.

Find the draft guidance here. Public comments are due by Jan. 1, 2020.

FDA: Drug Products Labeled as Homeopathic Guidance

On Oct. 24, the Food and Drug Administration (FDA) pulled a compliance policy allowing leeway for unapproved homeopathic drugs to remain on the market if they met certain criteria, unless FDA found a quality or manufacturing issue. FDA said products should go through the formal drug approval process before they can be sold again.

To replace the older policy, the FDA released a revised draft guidance on a risk-based approach. As a result, FDA intends to prioritize enforcement and regulatory actions involving certain categories of such products that potentially pose a higher risk to public health.

Find the draft guidance here.

Public comments must be submitted by Jan. 23, 2020.

FDA: Patient-Focused Drug Development: Methods to Identify What Is Important to Patients’ Guidance

On Sept. 30, the Food and Drug Administration (FDA) released a second draft guidance in a series of four patient-focused drug development guidances, as required under the 21st Century Cures Act. The series looks at how to collect and submit information from patients and caregivers for medical product development and regulatory decision-making. This draft guidance explains three research methods to do so: qualitative research, quantitative research and mixed-method research.

Find the draft guidance here.

Public comments must be submitted by Dec. 30, 2019.

Courts

Fifth Circuit Court Rules ACA’s Individual Mandate is Unconstitutional

On Dec. 19, a 5th Circuit Court panel ruled that the Affordable Care Act’s (ACA) individual mandate is unconstitutional, siding with the ruling made by Judge O’Connor in a Texas federal district court. Two of the three judges agreed the ACA should be struck down, explaining that the individual mandate is no longer a tax, and there is no other constitutional provision that justifies this exercise of congressional power. The appeals court majority declined to say how much else of the law can remain.

Instead, the panel ordered the lower court “to employ a finer-toothed comb ... and conduct a more searching inquiry into which provisions of the ACA Congress intended to be inseverable from the individual mandate.” This action will prolong the case, with a decision still needed by the Supreme Court, and the possibility that the Trump administration requests that the full federal appeals court hear the case again before sending it to the highest court. California Attorney General Xavier Becerra, who is leading a coalition of states defending the ACA, announced that he would appeal to the high court immediately.

Reports

GAO: Drug Control — The Office of National Drug Control Policy Should Develop Key Planning Elements to Meet Statutory Requirements

On Dec. 18, the Government Accountability Office (GAO) released a report on the Office of National Drug Control Policy (ONDCP), and how it has met some, but not all, of the new requirements legislation now requires of ONDCP. For example, ONDCP designated officials for two new coordinator positions. However, ONDCP does not have key planning elements needed to ensure it can meet other requirements related to, for example, its online database of drug control data.

The GAO made a set of recommendations here to meet those new requirements.

Find the full report here.

GAO: Health Care Workforce — Views on Expanding Medicare Graduate Medical Education Funding to Nurse Practitioners and Physician Assistants

On Dec. 18, the Government Accountability Office (GAO) released a report on stakeholder opinion on studies that point to a physician shortage in the U.S. Most federal funding to educate health care providers funds physician residencies through Medicare’s graduate medical education program. This program does not fund graduate training for nurse practitioners (NP) and physician assistants (PA), who deliver many of the same services as physicians, such as diagnosing patients and performing certain procedures. Instead, a smaller portion of federal funding—approximately $136 million in fiscal year 2019—is available to train them.

According to stakeholders, there could be benefits and challenges. For example, the program would provide reliable funding from year to year. But, stakeholders were also concerned about diverting resources from physician residencies. Stakeholders GAO interviewed said that one benefit of expanding Medicare GME is that Medicare GME funding would provide more stable funding for NP and PA training, compared to existing programs. Stakeholders said one challenge of such an expansion is that clinical training requirements for NPs and PAs are different than for physicians; therefore, any change to Medicare GME to include NPs and PAs would need to consider how to allocate GME funding in light of these differences.

Find the full report here.

GAO: Mental Health and Substance Use — State and Federal Oversight of Compliance with Parity Requirements Varies

On Dec. 13, the Government Accountability Office (GAO) released a report on the effectiveness of oversight approaches to health insurance plans that provided lower benefits for mental health care than other types of medical care. Congress set parity requirements to help address this discrepancy. This means things like copayment amounts or treatment approval requirements must be equal or comparable for mental health and other care. The Departments of Labor and Health and Human Services (HHS) commonly find violations of parity requirements in reviews based on unrelated complaints or information. The oversight only bases a few reviews on potential parity violations.

The GAO recommends:

  • The Assistant Secretary of Labor for the Employee Benefits Security Administration evaluate whether targeted oversight in response to information received is effective for ensuring compliance with MH/SU parity requirements. If this evaluation determines the current targeted oversight approach results in significant program risks, the Employee Benefits Security Administration should develop a plan to more effectively enforce MH/SU parity requirements and if necessary seek additional oversight authority, as warranted.
  • The Administrator of CMS evaluate whether targeted oversight in response to information received is effective for ensuring compliance with MH/SU parity requirements for non-federal governmental plans. If this evaluation determines the current targeted oversight approach results in significant program risks, CMS should develop a plan to more effectively enforce MH/SU parity requirements and if necessary seek additional oversight authority, as warranted.

Find the full report here.

Note: We wish you a happy holiday and a great new year. Our next issue will be in January 2020!

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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