Washington Healthcare Update - September 2019 #1

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This week in Washington: Senate to markup the Labor, Health and Human Services, Education and Related Agencies Appropriations Act; House to hold hearings on improving maternal health and the Administration's apparent revocation of medical deferred action for critically ill children.

Upcoming Hearings/Markups

Congress

House

  • Speaker Pelosi to Release Drug Pricing Plan in September, Progressive Caucus Raises Transparency Concerns

Administration

  • Former FDA Commissioners and Industry Groups Push for FDA’s Ned Sharpless to Be Permanent Commissioner
  • IRS Will Collect More Than $15.5B From 2020 Health Insurance Tax

Proposed Regulations/Guidance

  • SAMHSA: Proposed Rule to Loosen 42 CFR Part 2
  • CMS: CY 2020 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Proposed Rule
  • CMS: Proposed Radiation Oncology (RO) Model
  • FDA: New Required Health Warnings with Color Images for Cigarette Packages and Advertisements to Promote Greater Public Understanding of Negative Health Consequences of Smoking
  • FDA: General Clinical Pharmacology Considerations for Neonatal Studies for Drugs and Biological Products
  • FDA: Harmonizing Compendial Standards with Drug Application Approval Using the USP Pending Monograph Process
  • FDA: Using the Inactive Ingredient Database

Final Rules/Guidance

  • CMS: Program Integrity Enhancements to the Provider Enrollment Process
  • CMS Guidance to States Outlines Sponsor Deeming and Repayment Requirements for Certain Immigrants Seeking Medicaid and CHIP Coverage

Other

  • Democratic AGs Send Letter to Congress Urging Removal of Barriers to Treatment for Opioid Use Disorder

Courts

  • HHS Appeals Court Decision Striking Down DTC Ad Rule

Reports

  • GAO: Prescription Opioids – Patient Options for Safe and Effective Disposal of Unused Opioids

Upcoming Hearings/Markups

Tuesday, Sept. 10, 2019

Senate Committee on Appropriations: “Markup of the Labor, Health and Human Services, Education, and Related Agencies Appropriations Act, 2020”

The Senate Appropriations subcommittee on Labor, Health and Human Services, Education, and Related Agencies will hold a markup of the Labor, Health and Human Services, Education, and Related Agencies Appropriations Act, 2020. Find more details here. The markup webcast will be audio-only.

House Committee on Energy and Commerce: “Improving Maternal Health: Legislation to Advance Prevention Efforts and Access to Care”

The Energy and Commerce Subcommittee on Health will hold a hearing on several bills to improve maternal health and welfare. Find witness testimonies and hearing updates here.

Wednesday, Sept. 11, 2019

House Committee on Oversight and Reform: “The Administration’s Apparent Revocation of Medical Deferred Action for Critically Ill Children”

The House Committee on Oversight and Reform will hold a hearing to investigate the decision by Customs and Immigration Services (USCIS) to end consideration of non-military deferred action requests, commonly known as medical deferred action. Find witness testimonies and hearing updates here.

Congress

House

Speaker Pelosi to Release Drug Pricing Plan in September, Progressive Caucus Raises Transparency Concerns

House Speaker Nancy Pelosi’s (D-CA) upcoming drug pricing plan is expected for release in September, according to Rep. Pelosi’s health policy aide, Wendell Primus. The proposal authorizes the government to limit prices for certain expensive drugs and ensure that negotiated prices apply to all payers. On Aug. 28, members of the Progressive Caucus sent a letter to Rep. Pelosi, asking for transparency and inclusion in writing the plan before it is finalized for public presentation. The Progressive Caucus fears the plan falls short, and it supports an alternate bill sponsored by Rep. Lloyd Doggett (D-TX) that allows the government to strip patents from drug manufacturers that refuse to negotiate prices in good faith, known as the Medicare Negotiation and Competitive Licensing Act (H.R. 1046).

Find the full letter here.

Administration

Former FDA Commissioners and Industry Groups Push for FDA’s Ned Sharpless to Be Permanent Commissioner

On Sept. 3, a group of four former Food and Drug Administration (FDA) commissioners and more than 50 health groups sent two letters to President Trump and Health and Human Services (HHS) Secretary Alex Azar urging the administration to give acting FDA Commissioner Ned Sharpless the position permanently. Sharpless faces competition for the permanent role.

IRS Will Collect More Than $15.5B From 2020 Health Insurance Tax

On Sept. 3, the Internal Revenue Service (IRS) released a guidance memo stating that the federal government will collect more than $15.52 billion from most health insurers in 2020 if Congress does not extend the existing suspension of the Affordable Care Act’s health insurance tax. Bipartisan, bicameral legislation that would delay the tax until 2022 has 124 House sponsors and 27 Senate sponsors.

Find the full guidance memo here.

Proposed Regulations/Guidance

SAMHSA: Proposed Rule to Loosen 42 CFR Part 2

On Aug. 22, the Substance Abuse and Mental Health Services Administration (SAMHSA) proposed a rule that would loosen substance use record privacy restrictions. The proposed rule is part of the Department of Health and Human Services’ (HHS) “Regulatory Sprint to Coordinated Care,” championed by HHS Deputy Secretary Eric Hargan. The rule is one of four expected as part of the sprint, including changes to the Health Insurance Portability and Accountability Act (HIPAA), Stark Law and the anti-kickback statute. HHS Secretary Alex Azar commented that HHS does not have the authority to fully align 42 CFR Part 2 with HIPAA but expressed support for legislation to do so in Congress.

Find the proposed rule here. Public comments are due by Oct. 25, 2019.

CMS: CY 2020 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Proposed Rule

On July 29, the Centers for Medicare and Medicaid Services (CMS) proposed policies that follow directives in President Trump’s executive order entitled “Improving Price and Quality Transparency in American Healthcare to Put Patients First.” The proposed rule requires hospitals to not only publish their gross charges, or list prices, but also the negotiated price by specific payer and plan for a set of “shoppable” services. Those services could include anything that can be scheduled by a patient in advance, such as an MRI or hip replacement.

The rule also encourages site-neutral payment between certain Medicare sites of services, and proposes updates and policy changes under the Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System. The proposal includes the continuation of policy reducing reimbursement by nearly 30 percent for Part B drugs that hospitals buy through 340B. The policy is budget-neutral, so payment cuts are redistributed equally among hospitals.

Find the proposed rule here. The rule will be published on Aug. 8, 2019, and public comments are due on Sept. 27, 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: New Required Health Warnings with Color Images for Cigarette Packages and Advertisements to Promote Greater Public Understanding of Negative Health Consequences of Smoking

On Aug. 15, the Food and Drug Administration (FDA) proposed a rule to require new health warnings on cigarette packages and in advertisements to promote greater public understanding of the negative health consequences of smoking. The proposed warnings feature photo-realistic color images depicting the health risks of cigarette smoking. When finalized, this rule would fulfill a requirement in the Family Smoking Prevention and Tobacco Control Act.

The new warnings would appear prominently on cigarette packages and in advertisements, occupying the top 50% of the area of the front and rear panels of cigarette packages and at least 20% of the area at the top of cigarette advertisements. The warnings would be required to appear on packages and in advertisements 15 months after a final rule is issued.

Find the proposed rule here.

Public comments must be submitted by Oct. 15, 2019.

FDA: General Clinical Pharmacology Considerations for Neonatal Studies for Drugs and Biological Products

On July 31, the Food and Drug Administration (FDA) released a draft guidance regarding clinical trial design for newborns. The neonatal period is defined as the day of birth plus 27 days for full-term infants and as the day of birth through the expected date of delivery plus 27 days for preterm infants. The draft guidance provides the FDA’s current thinking on clinical pharmacology considerations for neonatal studies for drugs and biological products. It discusses neonatal subgroup classification, dose selection and study design and analysis considerations for the conduct of neonatal clinical pharmacology studies.

The guidance encourages the design of studies using input from a multidisciplinary team involved in neonatal care, including parents. The guidance also recommends that sponsors should use “innovative quantitative approaches” to study data gathered from adult, preclinical, animal, in vitro or other pediatric studies to predict the doses and clinical trial designs best suited for newborns.

Find the draft guidance here.

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

FDA: Harmonizing Compendial Standards with Drug Application Approval Using the USP Pending Monograph Process

On July 10, the Food and Drug Administration (FDA) released a draft guidance meant to speed up the generic drug approval process. The guidance explains how drug manufacturers should use the United States Pharmacopeia (USP) Pending Monograph Process (USP-PMP) to combine USP’s process for allowing revisions to compendial standards with the FDA’s approved quality and labeling requirements for drug product applications.

Find the draft guidance here.

Public comments must be submitted by Sept. 10, 2019.

FDA: Using the Inactive Ingredient Database

On July 10, the Food and Drug Administration (FDA) released a draft guidance that explains how drug manufacturers can better use the Inactive Ingredient Database (IID) in drug development, including to evaluate the safety of inactive ingredients, also known as excipients. The guidance discusses how the IID is structured; the data regarding excipients in the IID; and how nomenclature, maximum potency levels and units of measure are presented in the IID.

Find the draft guidance here.

Public comments must be submitted by Sept. 10, 2019.

Final Rules/Guidance

CMS: Program Integrity Enhancements to the Provider Enrollment Process

On Sept. 5, the Center for Medicare and Medicaid Services (CMS) finalized a program-integrity rule that gives CMS more ability to block health care providers from participating in Medicare, Medicaid or the Children’s Health Insurance Program if they are affiliated with entities that may pose a heightened risk of fraud, waste or abuse. The final rule will take effect Nov. 4, 2019, and requires providers and suppliers in Medicare, Medicaid and CHIP to disclose any current or previous direct or indirect affiliation with an organization that has uncollected debt, has previously been excluded from federal health care programs or has been subject to similar sanctions. CMS can then deny enrollment to the provider or supplier based on their affiliations if CMS determines there is undue risk of fraud, waste or abuse.

Find the final rule here.

CMS Guidance to States Outlines Sponsor Deeming and Repayment Requirements for Certain Immigrants Seeking Medicaid and CHIP Coverage

On Aug. 23, the Centers for Medicare and Medicaid Services issued guidance to states regarding how they should determine certain sponsored immigrants’ eligibility for Medicaid and the Children’s Health Insurance Program (CHIP). The guidance follows the issuance of the Presidential Memorandum on Enforcing the Legal Responsibilities of Sponsors of Aliens, which directs relevant federal agencies to update or issue procedures and guidance as needed, to ensure compliance with the sponsor deeming and repayment obligations under current law. The guidance reminds states of their obligation to comply with the sponsor deeming requirements, along with information on the repayment and recovery of costs requirements.

Find the guidance here.

Other

Democratic AGs Send Letter to Congress Urging Removal of Barriers to Treatment for Opioid Use Disorder

On Aug. 5, thirty-nine state attorneys general (AGs) addressed a letter to congressional leaders, including Senate Majority Leader Mitch McConnell and House Speaker Nancy Pelosi, urging the removal of three federal-law barriers that they claim are preventing effective opioid-disorder treatments. The three barriers are:

  • The AGs asked that applicable federal privacy rules found in 42 CFR Part 2 be replaced by the privacy rules found in the Health Insurance Portability and Accountability Act (HIPAA).
  • The AGs asked that Congress pass H.R. 2482, the Mainstreaming Addiction Treatment (MAT) Act, to “eliminate unnecessary burdens on buprenorphine prescribing” created by the Drug Addiction Treatment Act of 2000 (DATA 2000).
  • The AGs asked that Congress “fully repeal” the federal Institutions for Mental Diseases (IMD) exclusion, which, they said, “generally prohibits state Medicaid programs from receiving federal reimbursement for adults between 21 and 65 receiving mental health or substance use disorder treatment in a residential treatment facility with more than 16 beds.”

Find the full letter here.

Courts

HHS Appeals Court Decision Striking Down DTC Ad Rule

On Aug. 21, the Department of Health and Human Services (HHS) appealed a court decision that struck down a Trump administration rule requiring drug manufacturers to disclose list prices in television advertisements. On July 8, the U.S. District Court for the District of Columbia ruled that HHS did not have the authority to force drug manufacturers to include list prices in advertisements. The appeal is of the case Merck & Co., Inc., et al., vs. U.S. Department of Health and Human Services, et al.

Reports

GAO: Prescription Opioids – Patient Options for Safe and Effective Disposal of Unused Opioids

On Sept. 3, the Government Accountability Office (GAO) released a report on federal agencies addressing the misuse of opioids by facilitating safe disposal of the drugs. The GAO reviewed federally recommended and other available methods patients may use to dispose of unused prescription opioids, and what is known about patients’ use of these methods. The GAO found available studies that show many patients are unaware of federally recommended disposal methods or choose not to dispose of unused prescription opioids. Federal data indicates that 85 percent of intentional misuse occurs with the patient’s knowledge—for example, when a patient sells or gives away unused prescription opioids. The Food and Drug Administration (FDA) launched a public awareness campaign called “Remove the Risk” in April 2019 to address these numbers.

Find the full report 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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Updated: May 25, 2018:

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