Washington Healthcare Update - March 2020 #4

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This week in Washington: Congress debates additional legislation to address the coronavirus (COVID-19) pandemic.

Congress

House
In recess, returning March 24, 2020

Senate

  • Senate Republicans Release “Phase Three” COVID-19 Stimulus Proposal

Administration

  • President Trump Signs Families First Coronavirus Response Act
  • HHS Considers Delay in ONC Interoperability Rule Timeline

Proposed Regulations/Guidance

  • DEA: Controls to Enhance the Cultivation of Marijuana for Research in the U.S.
  • FDA: Change in Safety Requirements for Diabetic Drugs
  • CMS: Comprehensive Care for Joint Replacement (CJR) Model Proposed Extension and Changes
  • CMS: 2021 Medicare Advantage and Part D Advance Notice Part II
  • CMS: Contract Year 2021 and 2022 Medicare Advantage and Part D
  • CMS: Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2021

Final Regulations/Guidance

  • FDA Approves Altering Clinical Trial Protocols During Pandemic
  • FDA Postpones Routine Domestic Inspections Due to COVID-19 Concerns
  • CMS Approves First State Request for 1135 Medicaid Waiver in Florida

Senate

Senate Republicans Release “Phase Three” COVID-19 Stimulus Proposal

On March 19, Senate Majority Leader Mitch McConnell (R-KY) released an economic stimulus bill to fight the coronavirus’s fallout, the Coronavirus Aid, Relief, and Economic Security Act. The proposed plan includes four priorities: direct financial help for the American people; relief for small businesses and their employees; steps to stabilize the economy and protect jobs; and more support for health care professionals and patients who are fighting the coronavirus pandemic. Among the direct help for individuals is $1,200 for individuals who make up to $75,000. It also includes an additional $500 for a child. The bill would delay the deadline to file 2019 taxes from April 15 to July 15 of this year.

The draft bill also includes $208 billion in loans for major industries that have been impacted by the coronavirus, including up to $50 billion for airlines, $8 billion for cargo air carriers and $150 billion for “other eligible entities.” The package sets aside $300 billion for small businesses. Under the loan structure, the loans would be forgiven if the businesses maintain their payroll. They could also use the loan to cover things like paid sick leave and mortgage payments.

The bill is expected to be voted on today, March 23, 2020.

Find the full bill here.

Administration

President Trump Signs Families First Coronavirus Response Act

On March 18, President Trump signed into law the Families First Coronavirus Response Act, an economic relief bill that provides paid sick and family leave for U.S. workers impacted by the illness, expands unemployment assistance, includes nutrition assistance and increases resources for testing. The Senate approved the bill the same day, 90-8, before forwarding it to the president’s desk.

Find the final bill here.

HHS Considers Delay in ONC Interoperability Rule Timeline

On March 18, the Health IT Advisory Committee of the Department of Health and Human Services (HHS) met to discuss the possibility of delaying the original timeline of the Office of the National Coordinator for Health Information Technology (ONC) interoperability rule, due to the COVID-19 pandemic. Not only would the ONC interoperability rule be pushed back, but HHS is also evaluating whether to delay the timeline for the Centers for Medicare and Medicaid Services (CMS) rule, focused on providers and payers. The delay is currently under consideration.

Proposed Regulations/Guidance

DEA: Controls to Enhance the Cultivation of Marijuana for Research in the U.S.

On March 20, the Drug Enforcement Agency (DEA) released a proposed rule for adding additional research marijuana growing licenses. The only research-grade medical marijuana currently grown in the U.S. is at the University of Mississippi, while 37 prospective producers have applied for and are awaiting decisions on their applications to grow research marijuana.

Find the proposed rule here, with public comments accepted starting on March 23, 2020.

FDA: Change in Safety Requirements for Diabetic Drugs

On March 9, the Food and Drug Administration (FDA) released a draft guidance to no longer require drug manufacturers to conduct large cardiovascular safety studies for all new type 2 diabetes therapies. The FDA is recommending new safety requirements that will focus on evaluations that are broader than heart disease. Companies will need to include at least 4,000 patients exposed to the drug in phase III clinical trials, with at least 1,500 patients exposed to the drug for at least one year and 500 patients exposed to the drug for at least two years.

Find the draft guidance here. Public comments are due by June 8, 2020.

CMS: Comprehensive Care for Joint Replacement (CJR) Model Proposed Extension and Changes

On Feb. 20, the Centers for Medicare and Medicaid Services (CMS) issued a rule that proposes a three-year extension and changes to the episode definition and pricing in the Comprehensive Care for Joint Replacement (CJR) Model. The Model, which is currently scheduled to end on Dec. 31, 2020, aims to reduce expenditures while preserving or enhancing quality of care by supporting better and more efficient care for beneficiaries undergoing the most common inpatient surgeries for Medicare beneficiaries: hip and knee replacements (also called lower extremity joint replacements or LEJR). This rule proposes to change certain aspects of the CJR Model, including incorporating outpatient hip and knee replacements into the episode of care definition, the target price calculation, the reconciliation process, the beneficiary notice requirements, gainsharing caps and the appeals process. Additionally, to allow time to evaluate the proposed changes, the rule proposes to extend the length of the CJR Model for an additional three years, through Dec. 31, 2023, for certain participant hospitals.

Find the proposal rule here. Public comments are due by April 24, 2020.

CMS: 2021 Medicare Advantage and Part D Advance Notice Part II

On Feb. 5, the Centers for Medicare and Medicaid Services (CMS) released Part II of the calendar year (CY) 2021 Advance Notice of Methodological Changes for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies (the Advance Notice). CMS released Part I of the Advance Notice on Jan. 6, 2020. The notice is seeking comment on whether it should develop measures of generic and biosimilar utilization that could be used to calculate a plan’s star rating, so CMS could reward plans that encourage adoption of lower-cost products.

Find the notice here.

CMS will publish the final Rate Announcement by April 6, 2020.

CMS: Contract Year 2021 and 2022 Medicare Advantage and Part D

On Feb. 5, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule that updates Medicare Advantage (MA or Part C) and the Medicare prescription drug benefit (Part D) program. Medicare Part D plans will be allowed to offer two specialty tiers on their drug formularies starting in 2021. The proposed rule requires that one of the two specialty tiers be a “preferred” tier that offers lower cost sharing for beneficiaries. The maximum allowed cost sharing for the specialty tiers would be between 25 percent and 33 percent, depending on whether the plan includes a deductible.

Drugs that cost $670 a month or more must currently be placed on one specialty tier. Allowing two tier options should give health plans leverage to work with drug manufacturers to get prices lower if the manufacturer wants to price their product at a more accessible cost to patients compared with their competitors. The proposed rule also requires Part D plans to implement by Jan. 1, 2022, a tool that will provide beneficiaries with real-time details on the cost of drugs based on their plan coverage and alternatives.

Find the proposed rule here.

CMS: Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2021

On Jan. 31, the Centers for Medicare and Medicaid Services (CMS) released the proposed annual Notice of Benefit and Payment Parameters Rule for 2021, also known as the proposed 2021 Payment Notice. This is the second year in a row that the proposed rule has been late.

CMS proposes to maintain the Federally Facilitated Exchange (FFE) user fee rate of 3.0 percent of premium, and the State-based Exchange on the Federal Platform (SBE-FP) user fee rate of 2.5 percent of premium based on the portion of FFE user fee-eligible costs allocated to SBE-FP activities. Alternatively, CMS is considering and seeking comment on reducing the FFE and SBE-FP user fee rate below the 2020 plan year level to reflect estimates of premium increases and enrollment decreases for the 2021 plan year, as well as potential savings resulting from cost-saving measures implemented over the last several years in hopes of reducing the user fee burden on consumers and creating downward pressure on premiums.

CMS is proposing changes to the policy regarding how drug manufacturer coupons accrue towards the annual limitation on cost sharing in response to stakeholder feedback indicating Treatment of Drug Manufacturer Coupons. CMS is proposing to amend current Medical Loss Ratio (MLR) regulations to require issuers to deduct from incurred claims the prescription drug rebates and other price concessions attributable to the issuer’s enrollees and received and retained by an entity providing pharmacy benefit management services to the issuer. CMS also proposes to clarify more generally that issuers must report expenses for services outsourced to or provided by other entities in the same manner as issuers’ expenses for non-outsourced services. These changes would help lower premiums by helping ensure that consumers’ premiums reflect the full benefit of prescription drug rebates and are not artificially inflated by outsourcing expenses.

Find the proposed rule here. Public comments are due by April 6, 2020.

Final Regulations/Guidance

FDA Approves Altering Clinical Trial Protocols During Pandemic

On March 18, the Food and Drug Administration (FDA) instructed manufacturers and researchers conducting clinical trials to alter their procedures when necessary to keep subjects safe during the coronavirus pandemic, and added that changes will be accepted as long as they were well documented. Scientists and companies can make necessary changes without prior approval of FDA or institutional review boards as long as they report them afterward.

Find the guidance here.

FDA Postpones Routine Domestic Inspections Due to COVID-19 Concerns

On March 18, the Food and Drug Administration (FDA) announced that there will be a cutback on domestic inspections of all regulated products including drugs, devices, tobacco and food to protect inspectors from the coronavirus. For-cause inspections deemed mission critical will continue, including response to natural disasters, outbreaks and other emergencies that impact regulated products. FDA will review records instead of visiting firms in person to help maintain oversight and is evaluating additional ways to conduct inspectional work.

CMS Approves First State Request for 1135 Medicaid Waiver in Florida

On March 17, the Centers for Medicare and Medicaid Services (CMS) approved Florida’s Section 1135 waiver request in response to the COVID-19 national emergency, the first state to submit a request. The national emergency declaration during the COVID-19 pandemic enables CMS to waive certain requirements in Medicare, Medicaid and CHIP under Section 1135 authority. This includes the ability to grant state and territorial Medicaid agencies a wider range of flexibilities, and states may now submit Section 1135 waiver requests for CMS approval that will remove administrative burdens and expand access to needed services.

On March 20, Washington state became the second state to have the 1135 Medicaid waiver approved.

Find the approval letter here.

Courts

Find a comprehensive look at “Courts and Healthcare Policy in 2020” here.

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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