This Week: CMS releases final rules for SNF,IRF and others: House in recess; Senate in recess, but will be back this month.

1. Congress


House Energy and Commerce Committee Looks at 340B Pharmacies

The leadership of the House Energy and Commerce Committee leaders have queried nine contract pharmacies participating in the 340B drug discount program. The letters to the pharmacies follow a June GA report that emphasized issues in HHS oversight and revealed that some contracting practices may create incentives to use higher-cost drugs.

The letters ask for details on how much money pharmacies recoup from each 340B prescription. The committee also wants to know whether the agreements with 340B hospitals require the companies to offer discounts to uninsured and low-income patients on 340B drugs. In addition the letters ask about how the pharmacies prevent diversion of 340B medicine


Animal Drug User Fee Passes Senate

On July 31, the Senate passed by voice vote the Animal Drug User Fee and Animal Generic Drug User Fee Amendments (ADUFA/AGDUFA), which reauthorize the FDA’s animal drug and generic drug user fee programs. Despite consensus from both sides that the bill had to be passed, Sen. Patty Murray (D-WA) raised concern with a provision that expands FDA’s conditional approval pathway for animal drugs, but both she and Sen. Lamar Alexander (R-TN) said FDA Commissioner Scott Gottlieb has committed to providing guidance on the pathway and understands it is not intended for antibiotics.

The vote took place the same day Gottlieb announced a five-year plan meant to slow the development of antimicrobial-resistant bacteria by reducing the overuse and misuse of antimicrobial drugs in veterinary settings. The plan, Gottlieb said, aims to align antimicrobial drug product use with the principles of antimicrobial stewardship; support efforts to foster better stewardship of antimicrobials in veterinary settings; and enhance the monitoring of antimicrobial resistance and antimicrobial drug use in animals. The announcement was well-received by Sens. Elizabeth Warren (D-MA) and Murray.

During the Senate floor vote Tuesday, Sen. Murray, the Senate HELP committee’s ranking Democrat, criticized the House Energy and Commerce Committee for taking “our bipartisan bill that we worked on together” and adding the “controversial” conditional approval provision. She said the pathway as it currently stands—where FDA can for a limited amount of time conditionally approve an animal drug for a minor species or an uncommon disease in a major species while the sponsor collects data on the safety and efficacy—does not have a good track record of success.

“This pathway was supposed to spur innovation, but only four drugs have ever been conditionally approved in the pathway’s 14-year history. And only one of those four was actually effective and gained full approval. That’s not a very good track record,” Murray said. “Nonetheless, the House bill expands that pathway to any difficult-to-develop animal drug that could address an unmet need and doesn’t even define what qualifies as ‘difficult.’ ”

The senator said she is concerned with the “undefined scope of this pathway” and believes it does not uphold FDA’s gold standard for drug approvals.

Sen. Alexander (R-TN), chair of the Senate HELP Committee, said he and Murray agree there needs to be more clarification around what it means for a drug to be difficult to study, adding he has spoken with Gottlieb about the issue and the agency chief has committed to issue guidance quickly and develop regulations to provide such clarity.

2. Administration

Medicare Part D Premiums Continue to Decline in 2019

On July 31, the Centers for Medicare & Medicaid Services (CMS) announced that, for the second year in a row, the average basic premium for a Medicare Part D prescription drug plan in 2019 is projected to decline. Basic Part D premiums are expected to fall from $33.59 this year to $32.50 next year.

Earlier this year, CMS announced changes in the Part D program aimed at strengthening the program. Those changes included:

  • Reducing the maximum amount that low-income beneficiaries pay for certain innovative medicines known as “biosimilars.”
  • Allowing for certain generic drugs to be substituted onto plan formularies more quickly during the year, so beneficiaries immediately benefit and have lower cost sharing.
  • Increasing competition among plans by removing the requirement that certain Part D plans have to “meaningfully differ” from each other, making more plan options available.
  • Increasing competition among pharmacies by clarifying the “any willing provider” requirement, to increase the number of pharmacy options that beneficiaries have.

CMS anticipates releasing the premiums and costs for Medicare health and drug plans for the 2019 calendar year in mid-to-late September.

CMS Finalizes Rules for SNFs, IRFs and Inpatient Psychiatric Hospitals

On July 31, the Centers for Medicare and Medicaid Services finalized three 2019 Medicare payment rules for the Skilled Nursing Facility PPS, Inpatient Rehabilitation Facility PPS and Inpatient Psychiatric Facility PPS. The final rules approved $975 million in additional funding for post-acute care providers, including skilled-nursing, inpatient psychiatric and inpatient rehab facilities.

The Skilled Nursing Facilities (SNF) PPS final rule incorporates the agency’s Patients Over Paperwork initiative through avenues that reduce unnecessary burden on providers by easing documentation requirements and offering more flexibility. As part of the agency’s actions to modernize Medicare, the SNF PPS rule establishes an innovative new classification system, the Patient Driven Payment Model (PDPM), which ties skilled nursing facility payments to patients’ conditions and care needs rather than volume of services provided. The move to this model is expected to also save providers an estimated $2 billion over the next decade.

Of note in these rules is the continued work on the agency’s Meaningful Measures initiative. The goal of this initiative is a prudent measure set that focuses on the most critical quality issues and patient safety with the least burden for clinicians and providers. The Inpatient Rehabilitation Facility (IRF) PPS and Inpatient Psychiatric Facility (IPF) PPS final rules finalize policies that ensure the measures those providers must report are patient-centered and outcome-driven rather than process-oriented. Where applicable, these changes will allow providers to work with a smaller set of more meaningful health care measures and spend more time on patient care.

The IRF PPS final rule reduces both administrative and documentation burden for IRF providers by well over 300,000 hours. By reducing regulatory documentation burden on IRF physicians, provisions in this final rule will allow more time to be spent on direct patient care. Additionally, this final rule adopts advances in telecommunications technology by removing obstacles that may prevent rehabilitation physicians from conducting interdisciplinary team meetings without being physically in the room.


For a fact sheet on the FY 2019 SNF PPS final rule please visit:


For a fact sheet on the FY 2019 Inpatient Rehabilitation Facility PPS final rule please visit:


For a fact sheet on the FY 2019 Inpatient Psychiatric Facility (IPF) PPS final rule please visit:

CMS Continues Moratoria on New Non-Emergency Ground Ambulance Suppliers and Home Health

On July 30, CMS announced it would continue for another six months moratoria on Medicare, Medicaid and CHIP participation for new non-emergency ground ambulance suppliers in New Jersey and Pennsylvania and home health agencies in Florida, Illinois, Michigan and Texas.

CMS says the moratoria aren’t expected to negatively affect access to care for Medicare, Medicaid or CHIP beneficiaries.

“CMS consulted with the HHS-OIG regarding the extension of the moratoria on new HHAs and Part B non-emergency ground ambulance providers and suppliers in all of the moratoria states, and HHS-OIG agrees that a significant potential for fraud, waste, and abuse continues to exist regarding those provider and supplier types in these geographic areas. The circumstances warranting the imposition of the moratoria have not yet abated, and CMS has determined that the moratoria are still needed as we monitor the indicators and continue with administrative actions to combat fraud and abuse, such as payment suspensions and revocations of provider/supplier numbers,” CMS said.