Washington Watch
Week of December 7, 2020

Carter L. Alleman, J.D.
Senators Ask Leadership to Address Fee Schedule Budget Neutrality Cuts

Senators Steve Daines (R-Mont.), John Boozman (R-Ark.), Debbie Stabenow (D-Mich.), and Robert Menendez (D-N.J.) are circulating a sign-on letter to Senate leadership urging them to address forthcoming physician payment cuts in future legislative negotiations. The lawmakers argue that the statutory budget neutrality rule, which would result in pay increases for office-based specialties but across-the-board pay cuts for other medical specialties, would jeopardize patient access to medically necessary services at a time when the health care system is already strained because of the COVID-19 pandemic.

Oversight Panel Calls for Testimony From Purdue
House Oversight Committee Chair Carolyn Maloney (D-N.Y.) is requesting the CEO of Purdue Pharma and members of the Sackler family testify before her panel on their role in the opioid epidemic. “Even after entering into a settlement with the Department of Justice (DOJ) in 2007 on charges of misbranding,” Maloney writes, “your company continued to recklessly market OxyContin, despite knowledge of the medication’s potential for misuse.” The hearing is scheduled to be held remotely on December 8 at 10:00 a.m.

House Democrats Pick Leadership for 117th Congress
House Democrats have nominated current Speaker Nancy Pelosi (D-Calif.) to continue to lead the party for another two years. Her selection took place by voice vote. To secure the position of speaker during the 117th Congress, she will need the support of the majority of the full House come January. Majority Leader Steny Hoyer (D-Md.), Majority Whip Jim Clyburn (D-S.C.), and House Democratic Caucus Chairman Hakeem Jeffries (D-N.Y.) were also reelected to their leadership posts.

McConnell, Schumer Reelected as Senate Leaders
Majority Leader Mitch McConnell (R-Ky.) was reelected to lead Senate Republicans during the 117th session of Congress, while Chuck Schumer (D-N.Y.) will remain as the top Democrat in the chamber. Republican Whip John Thune (R-S.D.) and Republican Conference Chair John Barrasso (R-Wyo.) will return to their leadership positions, with the addition of Rick Scott (R-Fla.) who will serve as chair of the National Republican Senatorial Committee. Democratic Senate leadership will also remain the same, with party Whip Dick Durbin (D-Ill.) and Assistant Democratic Leader Patty Murray (D-Wash.), alongside Cory Booker (D-N.J.) who will serve as Vice Chair of the Democratic Policy and Communications Committee and Catherine Cortez Masto (D-Nev.) who will serve as Vice Chair of Outreach.

COVID Stimulus Negotiations Remain Stalled
Senate Minority Leader Chuck Schumer (D-N.Y.) called on Majority Leader Mitch McConnell (R Ky to resume negotiations on a coronavirus stimulus package. McConnell has repeatedly dismissed the $2.4 trillion bill that Democratic leadership wish to use as a starting point for negotiations. White House Chief of Staff Mark Meadows signaled that any future talks on a COVID stimulus package will be led by Congress and not the White House. Previously, negotiations had taken place between Meadows, Treasury Secretary Steven Mnuchin, and House Speaker Nancy Pelosi (D-Calif.).

2020 MIPS Extreme and Uncontrollable Circumstances Exception Application Deadline has been Extended to February 1, 2021
To further support clinicians during the COVID-19 public health emergency, the Centers for Medicare & Medicaid Services (CMS) is extending the 2020 Merit-based Incentive Payment System (MIPS) Extreme and Uncontrollable Circumstances Exception application deadline to February 1, 2021.

For the 2020 performance year, CMS will be using its Extreme and Uncontrollable Circumstances policy to allow MIPS eligible clinicians, groups, and virtual groups to submit an application requesting reweighting of one or more MIPS performance categories to 0% due to the current COVID-19 public health emergency. 

If you have any concerns about the effect of the COVID-19 public health emergency on your performance data, including cost measures, for the 2020 performance period, submit an application now and be sure to cite COVID-19 as the reason for your application.

White House Releases Major Drug Pricing Regulations
The administration has released two major regulations aimed at lowering drug prices. The so-called “rebate rule” would remove safe harbor protection from antikickback law for after-sale rebates paid by manufacturers to pharmacy benefit managers (PBMs) in Medicare Part D. Instead, upfront discounts will be eligible for safe harbor protection. The rule will also allow for discounts to go directly to the patient at the pharmacy counter. The Department of Health and Human Services (HHS) had appeared to scrap the rule last year out of concerns that it would raise premiums for program beneficiaries. The PBM industry has threatened lawsuits if the administration follows through with the regulation.

Meanwhile, the so-called “most favored nation” interim final rule would tie federal reimbursement for drugs administered in doctors’ offices and outpatient departments to the lowest price paid among certain other countries. The policy would be implemented over the course of seven years through a demonstration model and initially apply to 50 single-source drugs comprising a high percentage of Part B drug spending. It would also replace the current add-on percentage-based payment with a flat fee. The seven-year demo will be nationwide and mandatory, to begin in January. In the rule, the Centers for Medicare and Medicaid Services (CMS) acknowledges that it is difficult to accurately estimate the financial impact of the model, but estimates that it will save more than $85 billion over seven years, net of associated premium savings.

CMS Issues Stark, Anti-Kickback Reform Final Rule
The Centers for Medicare and Medicaid Services (CMS) released its Stark and anti-kickback final rule, which has been under review since July. The Physician Self-Referral Law, also known as the “Stark Law,” generally prohibits providers from making referrals to an entity for certain health care services if the provider has a financial relationship with the entity. The new regulation finalizes new, permanent exceptions for value-based arrangements that will permit health care providers to design and enter into value-based arrangements, add additional guidance on key requirements of the exceptions to the physician self-referral law, and finalize protection for non-abusive, beneficial arrangements.

White House Finalizes OPO Rule
The White House has finalized a rule aimed at increasing the number of organs available for transplant and shortening transplant wait times. The regulation from the Centers for Medicare and Medicaid Services (CMS) would require organ procurement organizations (OPOs) to be more transparent about their performance and establish more stringent quality measurements. The rule is a part of President Trump’s July 2019 Executive Order on Advancing American Kidney Health. It would require each OPO to track the number of usable organs procured, the number that are actually transplanted, and the number donated for research.

Key Justices Appear to Support Severability of Individual Mandate
Oral arguments began last Tuesday before the Supreme Court in California v. Texas, the case in which the high court will rule on the constitutionality of the Affordable Care Act (ACA). The case was brought by a group of Republican- led states and is supported by the current administration. They argue that the individual mandate, which was originally tied to a tax penalty for noncompliance, was central to a 2012 Supreme Court ruling upholding the law, and that since Congress eliminated the individual tax mandate in 2017 the entire law must now be invalidated. Members of the court, including Chief Justice John Roberts and Justice Brett Kavanaugh, signaled last week that they would support allowing the individual mandate to be severed from the remainder of the 2010 health care law, meaning that the rest of the ACA could stand even if the court decides to invalidate the individual mandate provision.