Washington Watch for October 2018

Carter L. Alleman, J.D.

Opioid Legislation Deal Reached

Lawmakers successfully reached a bipartisan, bicameral deal on legislation the opioid epidemic. The package represents a compromise on do rent measures advanced by eight House committees and five Senate committees. H.R. 6, the SUPPORT for Patients and Communities Act, was originally passed by the House in June. On September 17, the Senate substituted its Opioid Crisis Response Act and passed that version.

At the time, Chairman Alexander explained that the Senate would continue to work with the House to resolve issues to include in a final package to be passed before the House recessed prior to mid-term elections. The final 660-page compromise includes provisions to curtail the trafficking of illicit opioids, encourage the development of nonaddictive painkillers, and expand access to addiction treatment and prevention programs. The legislation would authorize nearly $8 billion for targeted response grants for states, grants for residential treatment programs for pregnant women with substance-used disorder (SUD), grants to support tracking and treating hepatitis C infections, and other grant programs.

The bill would partially roll back the current restriction on federal Medicaid reimbursement for inpatient drug treatment programs. It would not, however, alter existing federal privacy rules for drug treatment records. Lawmakers opted not to include a measure that would have reduced drug manufacturer’s contributions to close the Medicare Part D coverage gap. They also left out a measure that would have increased Medicare payments for opioid alternatives that treat post-surgical pain. The package was adopted by the House of Representatives by vote of 393-8. It is expected to be taken up by the Senate sometime this month.

Bipartisan Draft Surprise Billing Legislation Unveiled

A bipartisan group of lawmakers have released draft legislation that aims to stop the use of balanced billing for emergency treatment or treatment provided by an out-of-network provider at an in-network facility. The Protecting Patients from Surprise Medical Bills Act would prevent a health care provider that is outside of a patient’s insurance network from charging additional costs for emergency services beyond the amount allowed under their insurance plan. The patient’s insurer would be responsible for the payment of any additional charges, which are limited under the proposal. The draft legislation would also require providers to give written notification to patients who receive emergency care at an out-of-network facility before they receive follow-up non-emergency care. Additionally, patients could not be charged more for care from out-of-network doctors at an in-network hospital. The discussion draft also calls for a study and report to Congress on the impact of the bill on the prevalence of patient cost-sharing, access to care, quality of care, price of insurance premiums, change in overall health care costs, use of emergency rooms, access to innovative drugs and technology, and the adequacy of insurance networks.

CMS Releases Proposed Rule to Reduce Administrative Burdens

The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule September 17 intended to offer regulatory relief to health care providers and facilities that participate in the Medicare program by modifying, removing, or streamlining existing policies that the agency has determined are excessively burdensome. Under this rule, CMS proposes to allow hospitals and physicians to use their discretion to determine whether a patient requires a comprehensive medical history and physical (H&P) examination before an outpatient procedure. At present, CMS policy requires that an H&P examination for all patients no more than 30 days before a procedure and that an updated examination be furnished—and any changes in the patient’s condition documented—within 24 hours of the operation. CMS proposes to defer to a hospital’s policies and surgeon’s clinical judgment to ensure that patients receive the appropriate pre-surgical assessments, which would be tailored to the patient and the type of operation being performed, in place of an H&P examination.

In addition, CMS proposes to eliminate a policy that requires ambulatory surgical centers (ASCs) to have a written transfer agreement or physician admitting privileges with a local hospital. The agency states that, in the event a patient requires emergency medical care that surpasses the capabilities of an ASC, the ASC already is required to have personnel trained and available for emergency response and is expected to provide initial stabilizing treatment until the patient is transferred to a hospital. CMS indicates that this proposed change to the ASC hospitalization standard requirements would streamline ASC administrative operations while being less burdensome for Medicare-certified ASC facilities.

Lawmakers Urge HRSA Oversight of 340B

Bipartisan leadership of the House Energy and Commerce Committee and Senate HELP Committee sent a letter to the Health Resources and Services Administration (HRSA) regarding the agency’s oversight of the 340B Drug Pricing Program.

The lawmakers acknowledge that HRSA has requested that Congress consider legislative action to provide the agency with broader rulemaking authority over the program, but also point out that HRSA has not used its existing authority to implement regulations to better administer 340B. The letter outlines HRSA’s authority to (1) establish and implement a binding Administrative Dispute Resolution (ADR) process for the resolution of certain disputes relating to compliance with 340B Program requirements, (2) provide for the imposition of civil monetary penalties (CMPs) against manufacturers that knowingly and intentionally overcharge a covered entity for a 340B drug, and (3) issue precisely defined standards of methodology for calculation of 340B ceiling prices. Additional regulations from HRSA “could help clarify and update program requirements in pursuit of strengthening access to necessary care and proper administration of the program,” the lawmakers write.

Energy and Commerce Requests Information on PBMs, Hospital Consolidation

Republican leadership of the House Energy and Commerce Committee have contacted several pharmacy benefit managers (PBMs) to better understand their role in the drug supply chain. The lawmakers seek information about drug negotiations, PBM work in the Medicare and Medicaid programs, and specialty drugs. “We request your assistance in order to better understand the relationship of a drug’s list price with the price negotiated and the different incentives that are offered to encourage reductions in list price,” the letter states.

They also request details on what percentage of rebates or discounts are passed along to PBM clients, and whether PBMs inform their clients if manufacturers offer to lower list prices for particular clients. The letters were signed by Chairman Greg Walden (R-Ore.), Health Subcommittee Chairman Michael Burgess (R-Texas), and Oversight and Investigations Subcommittee Chairman Gregg Harper (R-Miss.). They request a response from CVS, EnvisionRXOptions, Express Scripts Holding Company, Humana Inc., Prime Therapeutics, Procare Pharmacy Benefit Manager, Inc., and UnitedHealth Group by September 30.

Representatives Walden, Burgess, and Harper also sent a letter to the Medicare Payment Advisory Commission (MedPAC) last week, requesting that the commission conduct research into hospital consolidation and the financial impact it has on the Medicare program and its beneficiaries. The lawmakers acknowledge the efficiencies and economies of scale that can be accomplished through consolidation, while also highlighting the data which indicates that hospital consolidation can increase spending for both the Medicare program and patients.

Appropriations Progress as FY19 Approaches

President Trump signed the first appropriations bill for fiscal year (FY) 2019 last week. H.R. 5895 will fund Military Construction and Veterans Affairs,Energy and Water Development, and the Legislative Branch.

Senate Passes Gag Clause Legislation with Strong Bipartisan Support

The Senate overwhelmingly passed S. 2554, the Patient Right to Know Drug Prices Act, by a vote of 98-2 last week. The bill would make it easier for pharmacists to alert consumers when the retail price of a treatment would be less expensive than their insurance copay. The legislation would ban gag clauses imposed by pharmacy benefit managers (PBMs). Such clauses prevent pharmacists from telling customers about which payment method provides the most savings when purchasing medications. The bill would apply to most employer health plans and individual market plans. It accompanies legislation (S. 2553) previously passed by the Senate which prohibits gag clauses in the Medicare program.

Senate Passes Children’s Hospital GME Reauthorization

The Senate passed H.R. 5385, the Dr. Benjy Frances Brooks Children’s Hospital GME Support Reauthorization Act of 2018 by unanimous consent. The bill will reauthorize the Children’s Hospital Graduate Medical Education five years. The House of Representatives passed H.R. 5385 by voice vote in July. It will now be sent to signature.

Kyl Picked to Fill John McCain’s Senate Seat

Jon Kyl was formally sworn in last week to fill the seat vacated by the death of John McCain. Kyl was selected by Arizona Governor Doug Ducey. He previously served as a Republican senator for the state of Arizona from 1995 to 2013.

Uninsurance Rate Remains Flat

The number of Americans without health insurance remained flat in 2017 at 8.8 percent, according to the latest data out of the Census Bureau. The uninsurance rate dropped significantly in 2014 following implementation of the Affordable Care Act (ACA) but has since flattened out at approximately 30 million people.

Senate Passes Health Appropriations Package

The U.S. Senate passed an $857 billion Labor, Health and Human Services and Related Agencies (LHHS) appropriations bill, H.R. 6157, with a bipartisan vote of 85-7.

The package includes a $2 billion increase for the National Institutes of Health (NIH), including a $190 million increase for the National Cancer Institute (NCI). In addition, the legislation allocates an additional $2 million for cancer registries to assist in tracking pediatric cancer as outlined in the Childhood Cancer Survivorship, Treatment, Access & Research (STAR) Act, P.L. 115-180, which became law in June 2018. The Childhood Cancer STAR Act has been a legislative priority for the American College of Surgeons (ACS) and the Commission on Cancer for a number of years.

The Senate now has passed nine of the 12 appropriations bills. With government funding expiring September 30, Congress has three weeks to pass the remaining three bills. The Senate LHHS appropriations bill now awaits action in the House of Representatives. The House bill differs from the Senate’s in terms of overall funding levels. If the House passes its version of the legislation, a Conference Committee will convene to negotiate the funding differences.