This week in Washington: The House and Senate are out for Thanksgiving recess this week.

Congress

Hearings/Markups

House

Senate

Administration

Final Regulations/Guidance

Proposed Regulations/Guidance

Courts

Reports

Congress

Hearings/Markups

House Committee on the Judiciary: “The Patent Trial and Appeal Board and the Appointments Clause: Implications of Recent Court Decisions”

Tuesday, Nov. 19, 2019: The House Committee on the Judiciary held a hearing on the patent system and implications of recent court decisions on the system.

Why this is important: On Nov. 20, the full committee unanimously approved two bills that aim to stop drug manufacturers from misusing patents. H.R. 5133, the Affordable Prescriptions for Patients Through Promoting Competition Act of 2019, targets product hopping and allows the Federal Trade Commission (FTC) to prosecute manufacturers who encourage customers to shift from one drug that is losing market exclusivity to another, similar drug that will have market exclusivity for a longer time. The legislation also allows the FTC to prosecute drug manufacturers for engaging in patent gaming.

H.R. 3991, the Affordable Prescriptions for Patients through Improvements to Patent Litigation Act of 2019, targets patent dancing, which is when a drug manufacturer files many patent claims that do not represent significant changes to fend off biosimilars attempting to enter the market. The two patent bills are not included in the House Democrats’ drug pricing package.

Find more details on the hearing here.

Senate Committee on Health, Education, Labor and Pensions: “Nomination of Stephen M. Hahn, MD, to serve as Commissioner of Food and Drugs”

Wednesday, Nov. 20, 2019: The Senate Committee on Health, Education, Labor and Pensions held a confirmation hearing for Dr. Stephen Hahn, President Trump’s nominee to be the new Food and Drug Administration (FDA) commissioner. On Nov. 6, Chairman Lamar Alexander (R-TN) released a statement of support for Dr. Stephen Hahn ahead of the hearing.

Find more details on the hearing here.

Senate Committee on Finance: “Alzheimer’s Awareness: Barriers to Diagnosis, Treatment and Care Coordination”

Wednesday, Nov. 20, 2019: The Senate Committee on Finance, Subcommittee on Health Care held hearing to shed light on the obstacles surrounding Alzheimer’s diagnosis and care.

Why this is important: Witnesses highlighted concerns that include gaps in coverage for patients with Alzheimer’s, burdening costs of long-term care and representation for caregivers. The members of the subcommittee asked for feedback on further federal action that can be taken to address these concerns.

Find more details on the hearing here.

House

Congress Passes Continuing Resolution to Fund the Government Through Dec. 20

On Nov. 21, President Trump signed a temporary government funding measure that will fund the government until Dec. 20. The continuing resolution (CR) includes health care extenders and funding for a mental health demonstration project and community health centers. The CR also delays funding cuts to the Medicaid Disproportionate Share Hospitals (DSH) until Dec. 20.

Congress Considers Paying for DSH Cuts with Medicaid Rebates

Congress is considering how to pay for a delay in the Medicaid DSH cuts, which is one of the most expensive of the health extenders. Members of Congress are looking at Medicaid rebates to potentially pay for the Medicaid DSH cut delay.

The House Energy and Commerce Committee passed legislation in July to avoid pay cuts to the DSH program for two years at a cost of $6.4 billion. The Senate Finance Committee has not taken up legislation to avoid DSH cuts. As of right now, Medicaid rebate policy is being considered as an offset in a longer-term government-funding bill.

Senate

Bipartisan Members Request HHS Prioritize Patient Privacy with Interoperability Rules

On Nov. 15, Sen. Mark Warner (D-VA) wrote to the Department of Health and Human Services (HHS) with concerns that the Centers for Medicare and Medicaid Services (CMS) proposed interoperability rule does not do enough to protect a patient’s right to privacy. The rule would require Medicare Advantage, state Medicaid, Children’s Health Insurance Program (CHIP) and exchange plans in the federally facilitated exchange give enrollees access to their medical claims and other health information electronically.

Similarly, Sens. Tammy Baldwin (D-WI), Ron Johnson (R-WI), Tina Smith (D-MN), Christopher Coons (D-DE), Jacky Rosen (D-NV), James Lankford (R-OK), Richard Durbin (D-IL) and Martha McSally (R-AZ) also sent a letter to HHS asking for the interoperability rule from the Office of the National Coordinator for Health Information Technology’s (ONC) rule to clearly define electronic health information to clarify what types of data can be shared, accessed and used. The final rule is already under review at the Office of Management and Budget (OMB).

Democrats Ask HHS to Ensure Healthcare.gov Operates Properly for Open Enrollment

On Nov. 21, a group of House and Senate Democrats sent a letter to the Department of Health and Human Services (HHS) demanding that healthcare.gov functions properly throughout the entire open enrollment season, referencing reports that as many as 100,000 people may have failed to enroll in coverage on Day 1 of the season due to technical errors. The letter included questions of how many people the Centers for Medicare and Medicaid Services (CMS) thinks were affected by the technical issues, and whether CMS has investigated the source of the error messages and website concerns. The letter asked for a response by Dec. 2, 2019.

The Democrats on the letter include Senate Finance ranking member Ron Wyden (OR), Senate Health, Education, Labor and Pensions (HELP) ranking member Patty Murray (WA), House Energy and Commerce Chair Frank Pallone (NJ), House Ways & Means Chair Richard Neal (MA) and House Education and Labor Chair Bobby Scott (VA).

Find the letter here.

Administration

CMS Plans Regulatory Overhaul of Medicaid Eligibility

On Nov. 18, the Centers for Medicare and Medicaid Services (CMS) released the fiscal 2019 improper pay estimates for Medicaid, and those estimates included an eligibility component. That aspect of the Payment Error Rate Measurement reviews was on hold from fiscal 2014 to fiscal 2018 as states were implementing new rules under the Affordable Care Act (ACA). CMS announced that it is planning an overhaul of Medicaid eligibility regulations after the national improper pay estimates for the program hit 14.9 percent for fiscal 2019, and is developing a proposed rule focused on insufficient recordkeeping, eligibility verification, redeterminations and compliance with eligibility requirements when beneficiaries’ circumstances change. CMS also claims that the increases in the Medicaid improper pay rate, which was at about 9.8 percent in the fiscal 2018 report, are caused by high levels of observed eligibility errors.

Find the FY2019 Medicare FFS Improper Payment Rates here.

FDA to Publish Importation Proposed Rule in January, According to Regulatory Agenda

As of Nov. 20, the Food and Drug Administration’s (FDA) regulatory agenda announced that a proposal to allow drug importation from Canada is expected to be published in January 2020. The proposal allows wholesalers and pharmacists to import prescription drugs from Canada under certain circumstances as part of the Trump administration’s drug importation plan. Announced in July 2019, the first part of the importation plan uses an existing provision in the Food, Drug and Cosmetic Act that allows for states, wholesalers and pharmacists to import prescription drugs from Canada as long as Department of Health and Human Services (HHS) certifies they are safe and will save consumers money.

The proposal expected from the FDA will further enforce the plan, and focus on pharmacists and wholesalers importing drugs from Canada, if they meet conditions meant to ensure that the importation poses no additional risk to safety and will achieve cost savings.

Find the FDA’s regulatory agenda here.

Final Regulations/Guidance

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 Informal RFI: Potential Oncology Care First Model in Preparation for the November 4 Public Listening Session

On Nov. 1, the Centers for Medicare and Medicaid Services (CMS) Center for Medicare and Medicaid Innovation (Innovation Center) announced that at its Public Listening Session, which invites feedback on value-based payment for high-quality oncology care, it hopes to gather feedback on an informal request for information (RFI) that outlines a potential Oncology Care First (OCF) Model.

Written feedback on the informal RFI will be accepted until today, Nov. 25, 2019, and can be sent to OCF@cms.hhs.gov.

Find the informal RFI 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 Dec. 24, 2019.

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

Hospitals Are Suing HHS on Inaccurate Medicare Payments

As of Nov. 22, hundreds of hospitals are suing the Department of Health and Human Services (HHS), claiming their Medicare payments were less than what was owed. The first lawsuit includes more than 600 hospitals that claim that HHS illegally allowed a 0.7 percent cut to inpatient services to continue in 2018 and 2019 when it should have stopped, by law, in 2017. The hospitals added that the cuts cost the industry $840 million, and they want that money back, with interest included.

The second lawsuit includes hospitals that claim HHS is not abiding by a recent Supreme Court decision that said the federal government was incorrectly calculating supplemental Medicare payments that help hospitals that treat larger numbers of low-income patients. Hospitals in the case maintain that they are owed at least $4 billion in underpayments.

Reports

GAO: Defense Health Care – Opportunities to Improve Future TRICARE Managed Care Support Contract Transitions

On Nov. 21, the Government Accountability Office (GAO) released a report on TRICARE, the Department of Defense’s (DOD) regional health care program. In July 2016, DOD awarded its fourth generation of TRICARE contracts, which consolidated two regions. The DOD provided a transition period for its incoming and outgoing contractors, after which the incoming contractors assumed responsibility for delivering health care. According to the GAO, incoming contractors had trouble meeting deadlines for processing referrals and claims because DOD’s transition guidance was not specific enough to prepare them. The GAO made recommendations to improve guidance and oversight requirements for future transitions.

The GAO recommends:

  • The director of the Defense Health Agency (DHA) define data-sharing requirements with more specificity in its transition guidance for outgoing and incoming contractors, including the time period covered and the types of data that must be shared.
  • The director of DHA revise the process the agency has in place for resolving issues raised between contractors during transition to ensure such issues are resolved within time frames that will not adversely affect the transition schedule.

Find the full report here.

GAO: Federal Research – Additional Actions Needed to Improve Public Access to Research Results

On Nov. 21, the Government Accountability Office (GAO) released a report on public access to results of federally funded research that can accelerate scientific breakthroughs. In 2013, certain federal agencies were directed to create plans for increasing access to publications and data they funded. The 19 agencies the GAO reviewed in this report made progress, but some have not fully implemented their plans. For example:

  • 7 agencies have not taken steps to make data findable, such as creating a single web access point
  • 4 agencies do not require all researchers to submit a plan to provide access to data
  • 11 agencies do not fully ensure that researchers comply with access requirements

The GAO made 37 recommendations to 16 agencies to address these and other issues, found here.

Find the full report here.

GAO: Tribal Programs – Resource Constraints and Management Weaknesses Can Limit Federal Program Delivery to Tribes

On Nov. 19, the Government Accountability Office (GAO) released a report on a high number of staff vacancies, inadequate funding, management weaknesses and other factors that prevent the Bureau of Indian Affairs, the Bureau of Indian Education and the Indian Health Service from providing effective services. Federal management of programs that serve tribes is on the GAO High Risk List, and 60 of more than 90 recommendations GAO made for high-risk and other areas remain open. This testimony, which is based on reports GAO issued from June 2015 through March 2019 primarily related to education, health care and energy development, provides examples of (1) capacity and funding constraints and budget uncertainty and (2) management weaknesses that limit the effective delivery of federal programs for tribes and their members.

Find the full report here.

GAO: Tobacco User Fees – Further Action Needed to Ensure Calculations Are Based on Complete and Accurate Data

On Nov. 18, the Government Accountability Office (GAO) released a report on the fees the Food and Drug Administration (FDA) charges tobacco manufacturers to fund regulation activities. The report addressed challenges in obtaining the needed data to check fee calculations and make adjusted at the end of each year, with the most recent adjustment just being completed for fiscal year 2015.

The GAO recommended:

  • The commissioner of FDA consulted with the Alcohol and Tobacco Tax and Trade Bureau (TTB) and Customs and Border Protection (CBP) to determine and document—for example, in Memorandums of Understanding or other written agreements—procedures and time frames for FDA to receive quality data from TTB and CBP that will allow FDA to complete its reconciliation process in a timely manner.

Find the full report here.