June 22, 2018
On Tuesday the Department of Labor (DOL) issued the final rule for association health plans. President Trump issued an executive order on October calling on his administration to make it easier to form association health plans to help lower health care costs. Under previous guidance from DOL small businesses had to demonstrate a much greater “commonality of interest” to pool together to offer their employees group health plans. The new regulation makes it much easier for small businesses and sole proprietors to come together to form a group health insurance plan. For example, the rule allows for small businesses can join together to form a group health plan if they are located in the same metropolitan area. The rule allows plans formed under the previous the guidance to continue to operate under that guidance and not comply with the new regulation.
Under the regulation, small businesses can either purchase group health plans or self-insure their group health plan. Since these plans are group plans they do not have to comply with the essential health benefits requirement of the Affordable Care Act (ACA). At least two state Attorney Generals have stated they plan to challenge the new rule in court as they are concerned about healthier individuals being drawn out of the ACA marketplaces for lower cost non-ACA compliant plans. Avalere Health projected that 3 million people would leave the ACA exchanges based upon the proposed rule.
Dr. Atul Gawande was named as the new chief executive of the new healthcare venture being formed by Amazon, Berkshire Hathaway, and JP Morgan Chase. It is an interesting choice as Dr. Gawande is an accomplished Harvard surgeon and prolific writer on healthcare but has no experience managing a large organization. The new organization will be based in Boston and Dr. Gawande has no plans to leave Harvard or stop writing for the New Yorker magazine.
The House continues its push on the opioid epidemic. The House approved more than 15 bills this week including H.R. 6 which is a more comprehensive bill made up of a number of other outstanding House bills. The rule the House passed for H.R. 6 also instructs the Clerk of the House to add the legislative text of three previously passed House bills to the text of H.R. 6.
The Office of Management and Budget (OMB) released a plan to reorganize the federal government. As we speculated earlier, the OMB plan calls for consolidating the Supplemental Nutrition Assistance Program (SNAP) and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) into the Department of Health and Human Services and renaming the agency the Department of Health and Public Welfare. Other notable reforms include merging the Departments of Education and Labor into a new agency entitled the Department of Education and the Workforce. These proposed changes will require congressional approval. Given the limited amount of time on the legislative calendar before the election, we are not anticipating congressional action on this plan in the immediate future.
The Trump administration took the final step Tuesday in its plan aimed at making health insurance policies cheaper for some small businesses. The administration released its final rule governing association health plans, which allow small businesses and the self-employed to band together based on their industry or location and buy health insurance. The rule stems from an executive order that Trump signed in October aimed at providing alternatives to the Affordable Care Act, which it is bent on dismantling. But the move is expected to weaken some of the Affordable Care Act’s consumer protections for those buying these plans and make coverage more expensive for those who remain on the Obamacare exchanges. The rule allows association health plans to be regulated in the same way as large employer policies. That would free them from having to adhere to some of Obamacare’s rules, particularly the one requiring insurers to offer comprehensive coverage. Plans can start being offered as soon as September 1.
Republicans on Capitol Hill are giving up on what might be their last best chance to overhaul Medicare, just as they’re losing their leading champion on the issue, House Speaker Paul Ryan. The quiet surrender on a subject that’s energized GOP fiscal hawks for the better part of a decade comes as new projections show Medicare’s trust fund in its worst shape since the recession, partly because of Republicans’ other chief obsession: their sweeping tax cuts. That’s left conservatives unsure how to agitate for a politically unpopular Medicare overhaul — one that President Donald Trump detests — and raises new questions about who will take up the entitlement reform mantle as Ryan heads for the exits.
Amazon, Berkshire Hathaway and JPMorgan Chase announced the leader of their new health care company. Dr. Atul Gawande, a renowned surgeon and writer, has been named CEO of the new health care venture. Gawande practices general and endocrine surgery at Brigham and Women’s Hospital in Boston and is a professor at Harvard Medical School. He’s a staff writer for The New Yorker and has written four New York Times bestsellers. The companies’ executives, Amazon’s (AMZN) Jeff Bezos, Berkshire’s (BERK) Warren Buffett and JPMorgan’s (JPM) Jamie Dimon said in January that their companies would work together to give their combined 840,000 employees better health care choices. The CEOs hope to bring down costs, both for their workers and their companies.
The White House on Thursday unveiled a sweeping plan to reorganize how the federal government is structured, including controversial proposals to impose work requirements on assistance programs. “Businesses change all the time,” said White House Office of Management and Budget Director Mick Mulvaney. “Government doesn’t, and one of the things you get when you hire a businessman to become president is you bring this attitude from the private sector.” The plan touches a wide range of agencies, but one of its main proposals is to move the food stamp program, officially known as SNAP, out of the Department of Agriculture and into the Department of Health and Human Services. That department would then be renamed the Department of Health and Public Welfare. A new Council on Public Assistance would then oversee programs gathered in one place, including food stamps and Medicaid, and have the power to impose uniform work requirements in those programs, a move strongly opposed by Democrats. The reorganization plan faces tough odds in Congress, where even aside from the dispute over work requirements, any reorganization faces opposition from congressional committees that could lose power if their jurisdictions change.
A key Republican is touting efforts by the House to combat the national opioid epidemic, calling recent actions “rifle shots” at tackling targeted problems associated with the growing crisis. Rep. Tom MacArthur (R-N.J.), a co-chair of the House Bipartisan Heroin Task Force, said Wednesday that the more than 50 bills passed by the House in the past two weeks are key to helping stem the epidemic. “These are not funding bills,” MacArthur said at an event hosted by The Hill and sponsored by the Pharmaceutical Care Management Association. “They are policy changes, for the most part, and they deal with a range of things that all point to that prevention, treatment and recovery––there’s a number of focus just on the fentanyl crisis, which is growing.” The effort has largely been bipartisan and comes after Congress passed $6 billion over two years for mental health and to combat the opioid crisis. Democrats have sponsored and cosponsored opioid legislation, and only opposed a handful of the bills. Rep. Tim Ryan (D-Ohio) said that he’s worked with Republican Rep. Evan Jenkins (W.Va.) on legislation to tackle opioids. The crisis is hitting both red and blue areas of the country hard and has led to bipartisan work in a hyperpartisan Congress.
The nation’s largest doctors group and an influential science panel today called on the Trump administration to halt its policy of separating migrant children from their families, saying it exacerbates emotional and physical stress and could create long-lasting health effects on children. The American Medical Association became the latest medical professional group to weigh in on the family separation controversy. The American Academy of Pediatrics, American Psychological Association and American College of Physicians have urged the administration to back away from its “zero-tolerance” policy, citing long-term consequences. “It is well known that childhood trauma and adverse childhood experiences created by inhumane treatment often create negative health impacts that can last an individual’s entire lifespan,” James Madara, the CEO of the physicians group, said in a letter to Attorney General Jeff Sessions, Homeland Security Secretary Kirstjen Nielsen and HHS Secretary Alex Azar. “The AMA believes strongly that, in the absence of immediate physical or emotional threats to the child’s well-being, migrating children should not be separated from their parents or caregivers.”
June 15, 2018
“Health plans intent on driving down costs are zeroing in on emergency room visits – one of the biggest drivers of medical inflation but a category of care that’s seldom been subject to denials. Anthem, the country’s largest Blue Cross Blue Shield plan, shook the market last year by refusing to pay for some ER visits it deemed unnecessary, triggering heated battles with hospitals and doctors and fueling a broader debate over whether patients can find less expensive settings without putting their health at risk. Since then, Blue Cross Blue Shield of Texas has adopted a similar policy limited to patients with HMO plans at out-of-network hospitals. And UnitedHealth Group, the country’s largest insurer, is using its own methodology to scrutinize if hospitals are charging too much for emergency care. If it concludes they are, UnitedHealth won’t cover the full amount of the claim.”
June 8, 2018
The Department of Justice (DOJ) filed a brief in the lawsuit being brought by the state of Texas and 19 other Republican led states to challenge the constitutionality of the Affordable Care Act (ACA) now that the tax penalty for the individual mandate has been repealed. The brief argues that when the tax penalty is taken off the books on January 1, 2019 the individual mandate will be unconstitutional. Further, DOJ believes the guaranteed issue and community rating are inseverable from the mandate and should also be ruled unconstitutional. California and 16 other states have sought to intervene in the case and protect the law. It is not clear how far this court case will advance at this point.
Congress continues to make fighting the opioid epidemic a big priority. The House is scheduled to take up more than 20 bills on the floor next week. Some of these bills will easily pass the House and will likely be placed on the suspension calendar while a few others will require a Rule for consideration. And the Senate Finance Committee will be marking up a package of 22 bills.
The Trump Administration is considering changing the name of the Department of Health and Human Services (HHS). They are also considering consolidating some other income support programs in the agency like the Supplemental Nutrition Assistance Program (formerly known as Food Stamps). HHS had previously had the word “welfare” in its title when it was the Department of Health, Education, and Welfare. It is not clear at this point what the new name will be. Many of us remember the shock waves that were sent when Tom Scully changed the name of the Health Care Financing Administration to the Centers for Medicare and Medicaid Services (CMS).
Accountable Care Organizations (ACOs) are under scrutiny from the Trump Administration. In rare public comments, a senior official from the Office of Management and Budget (OMB) Joe Grogan stated that ACOs need to take more risk sooner. There is a pending regulation altering the Medicare ACOs under review at OMB.
CMS rolled out a new scorecard for the Medicaid and CHIP programs. The scorecard will rate each state based upon their performance on a series of quality measures. The National Association of Medicaid Directors (NAMD) has concerns about the comparability, timeliness and accuracy of the data that is being reported. NAMD wants to work with CMS to refine the measures.
- House set to vote on more than 20 bills to combat opioid addiction- CNN (June 8)
“House is set to vote on more than two dozen bills next week aimed at fighting the opioid crisis, including policy changes to educate pharmacists, coordinate a national response and empowering the federal government to create a program to test alternative treatments. The House will vote individually on dozens of bills over the weeks of June 11 and June 18, a Republican aide on the House committee on Energy and Commerce told CNN. It’s the latest effort to tackle the crisis following the Comprehensive Addiction and Recovery Act and the 21st Century Cures Act, as well as the $4 billion appropriated in the omnibus this year. While the final details are still being worked out, the House will combine most of the bills into a more streamlined package before sending it over to the Senate for consideration, the aide said.”
- Trump admin tells court it won’t defend key provisions of the Affordable Care Act – CNN (June 8)
“The Trump administration won’t defend central provisions of the Affordable Care Act, saying in a legal filing Thursday night that key parts of the Affordable Care Act should be invalidated and that the individual mandate is unconstitutional. The filing came in a lawsuit brought by the state of Texas and a coalition of other Republican-led states who have filed suit in the United States District Court for the Northern District of Texas challenging the constitutionally of the Affordable Care Act. The states argue that after Congress eliminated the penalty for the individual mandate last year, effective in 2019, it destabilized other sections of the law. “In its filing the DOJ said that it agrees with Texas that the individual mandate is now unconstitutional and therefore it will not defend key provisions of the law in the suit,” said Timothy Jost, of Washington and Lee University School of Law. The provisions DOJ says should be invalidated are central to the ACA and would gut protections for those with pre-existing conditions.”
- Poll: Health care a top issue for voters ahead of midterms – The Hill (June 7)
“More than 1 in 5 voters, 22 percent, said in a new NBC News–Wall Street Journal poll that health care is their top issue in the November midterm elections. The economy and jobs followed at 19 percent, with guns at 13 percent, taxes, and spending at 11 percent and immigration at 10 percent. The poll found Democrats are more likely to consider health care a top issue. Thirty-two percent of Democrats said health care was a top issue for them, while 17 percent said guns. Twenty-six percent of Republicans said the economy and jobs are top issues for them in November, while 15 percent pointed to taxes and spending.”
June 1, 2018
The state of New Jersey also acted on a big health initiative with the Governor signing into law an individual mandate for health insurance coverage. The tax bill signed into law last year repealed the tax penalty to enforce the individual mandate from the Affordable Care Act so states are looking to state law for ways to continue or boost insurance coverage levels.
- Virginia General Assembly approves Medicaid expansion to 400,000 low-income residents- Washington Post (May 30)
“The Virginia legislature voted Wednesday to make government health insurance available to 400,000 low-income residents, overcoming five years of GOP resistance. The decision marks a leftward shift in the legislature and an enormous win for Gov. Ralph Northam (D), the pediatrician who ran on expanding access to health care.”
- Healthcare price transparency in U.S. not improved in recent years- Reuters(May 31)
“Although government measures and healthcare industry initiatives have tried to make prices more accessible to U.S. patients recently, researchers say there has been little improvement. In a follow-up to a 2011 study, researchers canvassed hospitals and surgeons trying to get price quotes for a full hip-replacement surgery. In less than half of cases, they got a complete or partial price for the procedure – and the number of hospitals that could provide any price information dropped from 48 percent to 21 percent from the first study to the second one.”
- Trump signs ‘Right to Try Act’ aimed at helping terminally ill patients seek drug treatments- CNN (May 30)
“President Donald Trump signed the “Right to Try Act” Wednesday, a measure aimed at helping terminally ill patients access drug treatments that are yet to be fully approved by the Food and Drug Administration. Trump, at a White House ceremony surrounded by patients and families who will be affected by the legislation, said his administration ‘worked hard on this’ but said repeatedly he didn’t understand why it hadn’t been done before.”
- Trump taps O’Rourke as acting VA secretary ahead of Wilkie confirmation – Politico (May 30)
“President Donald Trump has tapped longtime Veterans Affairs official Peter O’Rourke as the agency’s acting secretary, the White House announced Wednesday, a move that comes ahead of the confirmation hearing of VA secretary-designate Robert Wilkie.”
- New Jersey governor signs health-care mandate into law after federal repeal- The Hill (May 31)
“New Jersey Gov. Phil Murphy (D) on Wednesday night signed into law a bill imposing an individual mandate for health insurance to replace a federal requirement that Congress repealed. The move makes New Jersey the second state to require health-care coverage and impose a penalty on residents without it. Massachusetts imposed the requirement as part of its health reform law in 2006.”
- Democratic governors threaten to sue over Trump abortion rule- NBC News(May 31)
“Democratic governors are threatening to sue the Trump administration over a proposed rule that would force Planned Parenthood to give up its federal grants or keep family-planning and abortion-related services under different roofs. ‘If this reckless policy is finalized as written, we will have no choice but to explore all possible avenues, including legal options, to block it from harming the women in our states,’ Washington Gov. Jay Inslee and 13 fellow members of the Democratic Governors Association wrote in a letter to Health and Human Services Secretary Alex Azar. ‘Our voices will be heard on this damaging proposal, and we are prepared to match our words with action.'”
- Number of opioid prescriptions falls for fifth year in a row (May 31)
“The number of opioid prescriptions issued nationwide has dropped by 22 percent between 2013 and 2017, which a doctors group touted as progress in fighting the epidemic of opioid addiction. The report from the American Medical Association (AMA) finds there were 55 million fewer prescriptions over that time period and the number of prescriptions has dropped for five years in a row.”
May 25, 2018
This week the Senate passed the VA Maintaining Internal Systems and Strengthening Integrated Outside Networks (VA MISSION Act) and sent the bill to the President for his signature. This legislation provides the funding necessary to continue to fund the Choice Program to continue until the new community care program authorized by the MISSION Act is put in place. The bill also creates a presidential commission to review underperforming VA facilities for closure. It also expands the VA caregivers program so veterans from all eras can benefit from the program not just those from the post 9-11 era.
The House passed and sent to the President the so-called “Right to Try” legislation that will allow patients with terminal diseases the right to try experimental drugs not yet approved by the Food and Drug Administration. The President is expected to sign the bill next week and given how much he has promoted this policy we will likely see a significant signing ceremony event at the White House.
Congress continues its diligent work on the opioid epidemic with additional committees taking action. The Senate Judiciary Committee approved five bills to address the problem with solutions ranging from granting greater authority to the Drug Enforcement Administration (DEA), to reauthorizing the Office of Drug Control Policy, to closing a legal loophole around synthetic drugs. The Senate Finance Committee also announced plans to take action soon on 22 opioid related bills.
The Congressional Budget Office (CBO) released a report on Wednesday review the federal programs that provide subsidies for health insurance for individuals below the age of 65. One finding popped out is that CBO lowered its estimate for the number of uninsured because of the repeal of the individual mandate in last year’s tax bill. CBO lowered their projection by about 5 million people however also projects the number of uninsured will raise by about 5 million by the year 2027.
The House Energy and Commerce Committee’s Health Subcommittee held a hearing on legislation to reauthorize the Children’s Hospital Graduate Medical Education program. Former Energy and Commerce Committee Fred Upton noted at the hearing that only a few years ago there was bicameral and bipartisan support to scale back graduate medical education programs as this was one of the areas of agreement the on which the so-called Super Committee found agreement. However, we expect this reauthorization to be approved by Congress this year.
“HHS 340B rule delay would put hospitals at risk for high drug prices” – Modern Healthcare (May 24)
“Safety-net hospitals urged HHS not to postpone a rule setting new ceiling prices for the 340B drug discount program, saying the delay would leave them defenseless against rising costs. Although HHS was supposed to set ceiling prices starting July 1, the agency wants to hold off on the rule for a year. The request is the fifth time the rule has been postponed, and providers had until Tuesday to comment on the proposal. Hospitals that provide a significant amount of care to low-income patients or serve rural communities are eligible for 340B drug discounts. These hospitals also tend to have high amounts of uncompensated care and an increased chance of negative operating margins, according to Michael Rodgers, senior vice president at the Catholic Health Association.”
HHS Sec. Azar will testify at the June 12 Senate HELP Committee hearing” – The Hill (May 24)
“President Trump’s top health official will testify at a Senate hearing next month about the president’s proposal to reduce prescription drug costs. Health and Human Services Secretary Alex Azar will testify at the June 12 Senate Health, Education, Labor and Pensions Committee hearing, the first time lawmakers will publicly examine Trump’s plan, which was unveiled earlier this month. Committee Chairman Lamar Alexander (R-Tenn.) did not indicate whether the hearing will result in legislation.”
“House passes Trump-backed drug bill, letting sick patients bypass FDA” – Politico (May 22)
“House lawmakers on Wednesday overwhelmingly passed legislation expanding veterans’ access to private care at taxpayer expense, a campaign promise of President Donald Trump, and adding more money to the “Choice program” weeks before VA officials said it could run out of money. The $51 billion plan that passed 347-70 Wednesday includes $5.2 billion for the VA Choice program that funds private care. VA officials have warned that the program could run out of money as early as the end of the month, disrupting care for patients.”
May 18, 2018
The House Ways and Means Committee reported 7 bills in the continued legislative effort to address the opioid epidemic. While some of the Members expressed frustration that the committee was not doing enough to really tackle the crisis, all the measures were reported out on voice votes. Six of the measures sought to make improvements in the Medicare program to better handle the problem with solutions ranging from better coverage of opioid treatment programs, to requiring electronic prior authorizations for opioid subscriptions covered under Medicare Part D, to requiring the Department of Health and Human Services (HHS) to develop guidance for pain management and opioid abuse prevention.
The Energy and Commerce Committee reported 33 additional opioid bills. Most of the bills were reported unanimously but two bills proved to be more contentious. There was some division on the committee over the bills to allow Medicaid reimbursement for inpatient drug treatment and the bill to ease the current restrictions on sharing substance abuse records among physicians and hospitals.
The House is expected to consider all the reported opioid bills in early June. It is not yet clear whether some of these bills will be packaged before consideration on the House floor.
The Trump administration was busy this week moving forward with the plans the President laid out last Friday to help lower prescription drug prices. The Centers for Medicare and Medicaid Services (CMS) updated its drug pricing dashboard to include year-over-year pricing data on pharmaceuticals. CMS Administrator Seema Verma also issued a letter to all Part D plans stating that the administration finds any “gag orders” that some insurance plans and pharmacy benefit managers include in their contracts with pharmacies to be unacceptable.
HHS Secretary Azar announced during a speech on Monday morning that the agency will be issuing a request for proposals on a new pricing mechanism for drugs covered under Medicare Part B known as a Competitive Acquisition Program. Secretary Azar also revealed plans to review drugs they will seek to cover under Medicare Part D rather than Part B and eventually merging the two programs.
The House is also expected to consider next week the so-called “Right to Try” legislation that passed the Senate last year. The bill sponsored by Senator Johnson (R WI) allows patients to use medications not yet approved by the Food and Drug Administration. The House had try to narrow the scope of the bill by passing a measure to allow for unapproved drugs to be used by terminal patients but that bill did not gain any traction in the Senate. The President strongly supports the Johnson bill including a shout out during his State of the Union address and during his press conference on drug pricing last week.
- “Trump nominates Robert Wilkie as VA secretary” – CNN (May 18)
“President Donald Trump announced Friday that he is nominating Robert Wilkie to lead the Department of Veterans Affairs, three weeks after his previous nominee withdrew from the confirmation process amid controversy. Wilkie is currently the undersecretary of defense for personnel and readiness but has been serving as the VA’s acting secretary since the President fired VA Secretary David Shulkin in late March. But Trump said the announcement came as a surprise even to Wilkie.”
- “Trump to target Planned Parenthood with new abortion curbs” – Politico (May 18)
“The Trump administration is expected to announce as soon as Friday that it will dramatically change the federal family planning program to prohibit health care providers who accept the funds from making referrals for abortion — a step that could effectively cut off millions of dollars to Planned Parenthood. The changes to the Title X program, which are expected to be announced in new regulations, would mark the Trump administration’s latest win for social conservatives who are looking to prohibit access to abortion.”
- “House votes to expand veterans’ access to private care” – CNN (May 17)
“House lawmakers on Wednesday overwhelmingly passed legislation expanding veterans’ access to private care at taxpayer expense, a campaign promise of President Donald Trump, and adding more money to the “Choice program” weeks before VA officials said it could run out of money. The $51 billion plan that passed 347-70 Wednesday includes $5.2 billion for the VA Choice program that funds private care. VA officials have warned that the program could run out of money as early as the end of the month, disrupting care for patients.”
- “House to vote to send ‘right to try’ bill to Trump’s desk next week” – The Hill (May 17)
“The House will vote next week on Senate-passed legislation aimed at making it easier for sick patients to access experimental drugs — a big priority for President Trump, Vice President Pence and groups backed by conservative mega-donors Charles and David Koch. ‘This will not only offer a chance for the patient to possibly find treatment but could open possibilities to help others do the same,’ House Majority Leader Kevin McCarthy (R-Calif.) said in a statement. In August, the Senate passed Right to Try by unanimous consent. The bill, which Sen. Ron Johnson (R-Wis.) championed, lets sick patients request access to treatments the Food and Drug Administration (FDA) hasn’t yet approved.”
- “Stack of opioid bills advance out of key panel” – Washington Examiner (May 17)
“The House Energy and Commerce Committee on Thursday advanced 32 bills targeting the opioid crisis to the full House for a vote. The bills advanced after a marathon markup that lasted seven hours. Another package of 25 bills advanced out of committee earlier this month. ‘We have a unique opportunity to save lives, and we can’t lose sight of the real-world impact of our actions throughout this process,” said committee Chairman Greg Walden, R-Ore. “We owe it to the families of the more than 115 Americans who die from opioids every single day to come together and advance legislation that can help stem this tide.’”
May 11, 2018
President Trump just delivered his much anticipated speech on drug prices. Joined by Health and Human Services Secretary Alex Azar, the President talked about more negotiation, more competition and eliminating the middle men. Secretary Azar said there would be 50 actions HHS will take as part of their blueprint for lowering drug prices (for the full text of the blueprint click here). One action Azar mentioned was having the Food and Drug Administration (FDA) require pharmaceutical companies to include prices in their direct to consumer advertising.
The House Energy and Commerce Committee reported out 25 bipartisan opioid bills on Wednesday. Each bill cleared the committee on a voice vote. The committee plans to mark up more opioid bills next week as the Health Subcommittee had reported 63 bills during the last week in April. The expectation is these bills will be voted on in the House in early June.
Senator Alexander (R-TN) has stated that the Senate will wait for the House to act before calling up their opioid bill. While the Senate bill had broad bipartisan support in the Senate Health, Education, Labor, and Pensions (HELP) Committee, the committee did not take up some of the more contentious issues such as assessing fees to the manufacturers of opioids. It is not yet clear whether the Senate will reach an agreement on limitations for debate and amendments on the Senate floor to pass a bill.
The largest distributors of prescription drugs faced a difficult hearing this week as well. Representatives from McKesson, Cardinal Health, and AmerisourceBergen faced some difficult questions and statements from Members on the Energy and Commerce Committee.
The President sent to Capitol Hill the largest rescission package ever totaling $15.4 billion. Prime Policy Group published their analysis of the package on Tuesday which you can read here. There are a few notable rescissions in healthcare. The President proposed rescinded unspent monies from the Childrens’ Health Insurance Program (CHIP). What is interesting to note is that CHIP is a mandatory spending program. Rescission authority written into the Congressional Budget and Impoundment Control Act was intended for Presidents to be able to rescind discretionary funding appropriated by the Congress.
However, our reading of the law suggests that the letter of the law is silent on whether the funds are mandatory of discretionary. Senators will likely appeal to the Senate Parliamentarian arguing that the mandatory spending rescissions are not privileged and she will be listening to Senators on both sides. Also of note the President proposed rescinding funding from the Centers for Medicare and Medicaid Innovation (CMMI). While created by the Affordable Care Act, CMMI was exploring payment options supported by both parties.
The Centers for Medicare and Medicaid Services (CMS) released an interim final rule on Wednesday providing some targeted additional payments for suppliers of durable medical equipment such as oxygen for a six-month period. The rule had been pending at the Office of Management and Budget since September of last year. Secretary Azar testifying before the Senate Appropriations Committee was pressed about what the administration will do about reimbursement beyond the six months.
“Health care stocks whipsawed on Friday as President Trump unveiled his long-awaited plan to lower prescription drug prices, dubbed “American Patients First.” The sector briefly turned negative before trading 1.6 percent higher. Shares of Express Scripts and CVS both hit session lows before rising 3.7 percent and 3.8 percent. Dow Jones industrial average components Merck and UnitedHealth also dipped before trading higher upon the announcement. The proposal seeks to boost competition, improve negotiation and create incentives to lower list prices of prescription drugs and lower out-of-pocket costs for consumers. It stopped short of allowing Medicare to directly work with manufacturers on prices.”
“President Donald Trump wants Americans to get lower prices for medicines — and the rest of the world may pay for it. His “America First” message on drugs at home, coupled with pro-pharmaceutical industry policies abroad, could lead to higher costs for patients around the world — without making drugs more affordable for those in the U.S. Trump on Friday plans to deliver his long-promised speech on how to lower drug costs, addressing an industry he has in the past accused of “getting away with murder.” Global health officials worry he will also target practices that keep medicines affordable in other countries. Amid rising trade tensions between the U.S. and key trading partners, Trump and top administration officials have repeatedly blamed high U.S. prices in part on foreign countries that take advantage of the significant U.S. investment in medical research without paying their fair share. Many nations, including wealthy European ones, negotiate or regulate drug prices to keep them lower than what Americans typically pay.”
“President Donald Trump is looking to cut $15.4 billion out of the $1.3 trillion federal spending bill approved in March, using a process called rescission. Rescission withdraws spending authority for funds appropriated but not spent. Appropriated funds to the Centers for Medicare and Medicaid Innovation, or CMMI, and the Children’s Health Insurance Program would be cut. The Department of Health and Human ServicesCHIP program is targeted to lose $7 billion and the proposal would rescind $800 million to the innovation center.”
May 4, 2018
The President is going to give his much anticipated speech on drug pricing on Tuesday. Food and Drug Administration (FDA) Commissioner Scott Gottlieb may have given an indication of where the President will go on Tuesday when he remarked at a speech this week that it may be worth examining the safe harbor drug rebates have under anti-kickback laws. Drug makers have long pushed for having pharmacy benefit managers and insurance companies to pass along more of the negotiated rebates to consumers.
The three federal agencies declined to make significant changes in the rule for health insurance coverage of out-of-network emergency services. The final rule states that the plan satisfies the Affordable Care Act’s (ACA’s) copayment and coinsurance limitations if it pays the provider the greater of three amounts – 1. the same as the negotiated price for in-network providers; 2. the Medicare payment amount; or 3. the same amount as calculated for other out-of-network providers. This “greatest of three” or “GOT” method was originally put in place in 2015.
Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma defended the actions of the Trump administration around the ACA. In a speech before the World Health Care Congress, Administrator Verma claimed the law was broken before he took office. Verma also pointed to the administration’s proposed rule on short-term insurance plans that are not ACA-compliant saying extending the plans duration to one year will help to lower the cost of plans available to consumers.
“U.S. Food and Drug Administration chief Scott Gottlieb on Thursday questioned whether rebates that drugmakers provide to health insurers should remain protected by federal law, sparking new concerns on Wall Street over efforts to curb drug pricing. Gottlieb was referring to the common practice of pharmaceutical companies setting a high “list price” for a drug, and then lowering the cost for health plans through hefty rebates in exchange for the broadest access to patients. In recent weeks, he has criticized these practices for keeping drug prices high and locking out competitors. “What if we took on this system directly, by having the federal government reexamine the current safe harbor for drug rebates under the Anti-Kickback Statute?” Gottlieb said in remarks prepared for a Food and Drug Law Institute conference and posted on the FDA’s website.”
“President Trump on Thursday promised he would “immediately” sign revamped legislation expanding veterans’ access to private medical care at taxpayer expense, if Congress passes a new plan being considered just weeks before the “Choice Program” runs out of money. In a tweet Thursday, the president noted that it has been four years since the wait-times scandal at a Veterans Affairs hospital in Phoenix. That controversy showed that hospital employees were lying about the amount of time veterans waited for urgent health care, including cancer treatment and mental-health counseling.”
“President Donald Trump says he’ll quickly sign legislation expanding veterans’ access to private medical care if Congress clears the plan by Memorial Day. Trump noted in a tweet Thursday that it’s been four years since a scandal at a VA hospital in Phoenix, in which some veterans died while waiting for appointments. Congress has been working on overhauling the existing “choice” program, which is running out of money. Proposals have stalled over disagreements about cost and how much access veterans should have to private doctors.”
April 27, 2018
It was a busy week for healthcare in Washington with lots of new developments and a cancelled event – the President’s postponement of his speech on drug pricing.
The opioid epidemic is clearly the largest public health threat facing the country with 42,000 lives lost in 2016 alone. The Senate Health, Education, Labor, and Pensions (HELP) Committee reported S. 2680 – the Opioid Crisis Response Act by voice vote. The bill is comprised of over 40 initiatives largely from HELP Committee Senators. Although this bill sailed through committee, there was discussion of more controversial amendments being offered on the Senate floor should Leader McConnell allocate floor time. One notable proposal is from Senator Sanders (I-VT) to impose significant fines on drug manufacturers for their role in the opioid crisis.
The Energy and Commerce Committee’s Health Subcommittee also reported 63 opioid-related bills to the full committee. While some of these proposals were non-controversial and passed with bipartisan support, Ranking Member Frank Pallone (D-NJ) expressed his frustration about the committee acting too quickly without sufficient input from the federal agencies the bills are charging with new tasks to fight the epidemic. Pallone is fearful the quick actions could end up doing more harm than good. Democrats on the committee tried to block a few of the bills but did not have the votes to stop them from moving forward.
The Centers for Medicare and Medicaid Innovation (CMMI) released a Request for Information (RFI) about a possible new payment model. The new payment model, known as direct provider contracting, would attempt to put the patient at the center of this new care model. Unlike an accountable care organization or medical home where health care providers are coordinating the care, this would rely on the patient to determine the best providers and services needed for their own care. Interested parties have until May 25 to submit responses to the questions posed in the RFI.
The President’s nominee for Secretary of Veteran Affairs (VA) Real Admiral Ronny Jackson withdrew his name from consideration. Reports surfaced about alleged activities conducted while serving as the White House Attending Physician that were giving Senators on both sides of the aisle pause about Dr. Jackson’s candidacy. There is speculation that the President will look at other healthcare leaders for the next nominee to lead the VA.
Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma made a big splash at the Health Datapalooza conference this week. Administrator Verma announced that CMS will make public data from Medicare Advantage (MA) plans. The agency will release preliminary data from 2015 plans this year. Next year CMS will also release data from the Childrens’ Health Insurance Program (CHIP) and Medicaid. It is a big day for more data transparency and health research opportunities.
- HHS proposes Medicare payment rules to encourage hospitals to be clearer about prices – Washington Post (Apr 27)
“The Trump administration is proposing to rewrite rules on federal payments to hospitals treating older Americans on Medicare, making it easier for patients to see the prices of procedures and care. As part of annual updates to Medicare payment rules, federal health officials also want to add $1.5 billion for the coming year to the funds for so-called disproportionate share payments that help buffer hospitals from the expense of treating patients who cannot pay their bills.”
- Medicare may require hospitals to share electronic records – Axios (Apr 25)
“Even though electronic health records have become ubiquitous, hospitals and doctors still have not been able to easily share medical information with each other or with patients. Tying Medicare payments to an open exchange of medical records could force the industry to solve the practice known as information blocking.”
- Drug Pricing Proposal Should Revamp Medicare, GOP Experts Say – Roll Call (Apr 25)
“The administration’s proposal is a request for comment on strategies to lower drug prices and out-of-pocket costs. It was originally expected to be released in tandem with a speech by President Donald Trump on Thursday, but the speech was delayed as Health and Human Services Secretary Alex Azar recovers from an infection.”
- Frustration grows in health care industry over costs – Axios (Apr 27)
“The next big battle in health care will almost certainly be about costs, and right now it’s largely confined to industry infighting and finger-pointing. But mounting frustration from employers and employees could put cost controls on the table faster than you might think. Frustration over health care costs is one thing. But the greater threat to the health care industry is one that’s just starting to percolate — concern that we’ve already maxed out the existing tools to control those costs.”
April 20, 2018
Next week is shaping up to be a big week for healthcare in Washington. The Senate Committee on Health, Education, Labor, and Pensions (HELP) is scheduled to markup S. 2680, the Opioid Crisis Response Act of 2018, next Wednesday. This bill is comprised of 40 different proposals mostly from Senators serving on the HELP Committee. The legislation will make changes at 5 federal health agencies: Food and Drug Administration (FDA); Centers for Disease Control (CDC); Health Resources and Services Administration (HRSA); the National Institutes of Health (NIH); and the Substance Abuse and Mental Health Services Administration (SAMHSA). However, it does not propose any changes to the Medicare and Medicaid programs which both lie in the Senate Finance Committee’s jurisdiction.
The House Energy and Commerce Committee is also marking up a legislative package of proposals next Thursday. The committee is looking to package 34 separate proposals from Members of Congress serving on the panel. The bill which has not yet been introduced is expected to – at least – temporarily repeal the restriction on using Medicaid funds for inpatient treatment of addiction. The bill is also expected to make it easier to treat opioid abuse with telehealth under the Medicare program.
The President is planning to make a speech on drug pricing next Thursday. It is also expected that we will see the release of a Notice from the Department of Health and Human Services (HHS) on a strategy to lower drug prices and reduce out-of-pocket costs. HHS submitted the draft Notice to the Office of Management and Budget this past Tuesday. The Notice is expected to be a Request for Information on how to lower drug prices and the administration is expected to take more specific actions on drug pricing this summer.
HHS Secretary Azar announced this week that James Parker will serve as his Senior Advisor for transforming our health care system to a value-based system rather than a fee-for-service system. Parker most recently served as the Chief Executive Officer of an Indiana based managed care organization MDwise, Inc.
- Trump plans first major speech on drug prices next week – Politico (Apr 16)
“President Donald Trump is set to deliver his first major speech on drug prices on April 26, revisiting an issue he campaigned on but that is unlikely to yield major legislative changes. The strategy is unlikely to call for actions of the sort Trump touted on the campaign trail like allowing the government to negotiate the cost of drugs for Medicare, but based on the president’s fiscal 2019 budget request could advocate for Medicare and Medicaid demonstrations to test new ways of paying for drugs on a smaller scale, like allowing some states to try negotiating drug costs in Medicaid.”
- NIH abruptly changes course on industry opioids partnership after ethics flags raised – Stat (April 19)
“Dozens of drug companies were on the verge of teaming up with [NIH], which researchers hope will lead to the discovery of new medicines to treat addiction or serve as alternatives to opioids. But in an abrupt shift, the agency announced late last week that it won’t accept funds from drug makers after all. Citing recommendationsissued earlier this month by an NIH advisory panel, Collins said the agency will exclusively use taxpayer money to fund a comprehensive research initiative on pain and substance use disorder treatment.
- GOP in retreat on ObamaCare – The Hill (Apr 20)
Republicans are retreating from calls to repeal ObamaCare ahead of this year’s midterm elections. Less than a year after the GOP gave up on its legislative effort to repeal the law, Democrats are going on offense on this issue, attacking Republicans for their votes as they hope to retake the House majority.
April 13, 2018
A big focus this past week was the opioid epidemic. The Energy and Commerce Committee’s Health Subcommittee held a hearing examining 34 bills that the committee hopes will shape a comprehensive legislative package the Majority is hoping to bring to the floor before the Memorial Day recess. Democratic members on the committee are concerned about the committee moving too quickly and the possibility of a partisan opioid bill if they are not earnestly engaged in the drafting of the legislation. There are a number of issues on the table including allowing Medicaid to pay for inpatient addiction treatments and tracking prescriptions electronically in the Medicare program to help prevent abuse.
The Senate Committee on Health, Education, Labor, and Pensions (HELP) released a bipartisan draft bill to address the crisis. The bill is a product of 29 proposals put forward by nearly every member of the HELP Committee. The bill seeks to give the National Institutes of Health the flexibility necessary to develop non-addictive pain killers a move that Chairman Alexander (R-TN) dubbed the “Holy Grail” of tackling the opioid epidemic. Other provisions would give the Food and Drug Administration (FDA) greater authority to require drug manufacturers to package opioids in packaging for a set duration of time like a 3 or 7-day packet and to give consumers safe ways to dispose of unused opioids.
FDA Commissioner Scott Gottlieb had some strong words about drug pricing at the Community Oncology Alliance’s meeting held in Maryland. Commissioner Gottlieb took issue with raising co-pays and co-insurance requirements that are putting patients in precarious financial situations as they are seeking treatment for their lethal diseases. The cost of pharmaceuticals is one of the top priorities for Health and Human Services (HHS) Secretary Azar and we are likely to see administrative actions to address pricing.
We are also hearing the final rule on Association Health Plans may emerge from the Department of Labor in the next month or two. It will be interesting to see how aggressive the Department of Labor will be with the final rule. It is likely that the final rule will be challenged in the courts.
- Top House, Senate Dems warn administration on short-term insurance – The Hill (April 13)
“The ranking Democrats of five House and Senate committees are calling on the Trump administration to withdraw a proposal that would expand access to plans that don’t meet ObamaCare’s consumer protection rules. Led by House Energy and Commerce Committee ranking member Frank Pallone Jr.(N.J.), the Democrats warned Health and Human Services Secretary Alex Azar and other administration officials in a Thursday letter that the rule would “encourage the sale of junk health plans that will undermine consumer protections, sabotage the Affordable Care Act (ACA) marketplaces, and expose consumers to great financial risk.””
- NIH director: Agency is looking at alcohol industry influence ‘in a very aggressive way’ – STAT (April 11)
“The controversy over research conducted by the National Institutes of Health on the health impacts of moderate drinking has reached Capitol Hill, where a lawmaker on Wednesday stridently questioned the agency’s director, Francis Collins, over the NIH’s reportedly cozy relationship with the alcohol industry. In response to a question about reports that the NIH had allowed industry partnerships to influence research into alcohol use and the impact of alcohol marketing, Collins told Rep. Lucille Roybal-Allard (D-Calif.) that the NIH is “looking into this in a very aggressive way.””
- About half of Americans support single-payer health care – Washington Post (April 12)
“As President Trump’s administration tries to chip away at the Affordable Care Act by giving more authority to states to regulate private insurance, a new poll finds a slight majority of Americans support a move in the opposite direction, with everyone getting health insurance from a national government-run program. A Washington Post-Kaiser Family Foundation poll finds a 51 percent majority of Americans support a national health plan, also known as a single-payer plan, while 43 percent oppose it.”
April 6, 2018
This week an internal memo issued by the Secretary of Health and Human Services (HHS) Alex Azar surfaced outlining how the Secretary plans to run the department. The main takeaway from this appears to be that power and influence is being consolidated under Azar’s Deputy Secretary and close confidant Eric Hargan. The two served together at HHS during President George W. Bush’s administration and are known to have a strong rapport. Under this reorganization, Deputy Secretary Hargan will be the lead on all regulatory matters and will be the primary liaison between the Office of Management and Budget (OMB) and the White House. The memo also addresses the consolidation of staff and the removal of up to 40 percent of policy staff to streamline decision making.
Secretary Azar identified his top four priorities for the department: combating the opioid crisis; bringing down the cost of prescription drugs; addressing the cost and availability of health insurance; and transforming our health care system to a value-based system. Azar is creating several “Senior Advisors” – a new position – to help guide action on each of these priorities. Two of those advisors were named (Daniel Best for drug pricing and Dr. Brett Giroir for opioids); the other two will be named soon.
If you would like a copy of the memo, please email email@example.com.
Elsewhere in healthcare, Surgeon General Jerome Adams issued a rare public health advisory this week urging friends and family of people who are at risk of opioid overdose to carry with them naloxone which is used to treat overdoses. While first responders and many police officers carry naloxone, they often arrive too late in cases of overdoses. The last public health advisory from the Surgeon General’s office came in 2005 to warn against the dangers of drinking during pregnancy. This action by the Surgeon General indicates how severe the opioid epidemic has become.
- Senate Panel Unveils Draft Bill to Combat Opioid Addiction – Roll Call (Apr 5)
“The Senate health panel on Wednesday released a discussion draft intended to curb opioid addiction. The development comes as other House and Senate committees also prepare legislation. The Senate Health, Education, Labor and Pensions Committee plans to discuss this legislation at an upcoming hearing on April 11. The panel has already held six hearings on the opioid crisis so far this Congress featuring representatives from agencies including the Food and Drug Administration, the National Institutes of Health, and the Centers for Disease Control and Prevention, as well as governors from states affected by the crisis.”
- Heller promised Obamacare repeal in Las Vegas speech to GOP club – Las Vegas Review Journal (Apr 5)
“…Heller predicted that Republicans will pick up a handful of Senate seats in the midterm elections, and that would be the path to fulfilling that long-held promise of a repeal. “I think at the end of the day we end up with 53, 54 seats,” Heller said. “If we can do that, then we can repeal and replace and change the ACA as we know it today.” Heller was not among the original supporters of Trump, and was especially critical of then-candidate Trump during the 2016 campaign season.”
- In rare advisory, surgeon general urges public to carry overdose-reversal medication – STAT (Apr 5)
“Surgeon General Jerome Adamsis issuing a rare public health advisory on Thursday, calling for friends and family of people at risk for opioid overdoses to carry the OD-reversal medication naloxone. He likened the treatment to other livesaving interventions, such as knowing how to perform CPR or use an EpiPen.”
Rich Meade, a Vice Chairman at Prime Policy Group and Chair of the firm’s Healthcare Practice has over 25 years of experience in legislative, regulatory, political and public relations strategy. He previously served as Chief of Staff to the House Budget Committee. Rich has helped his clients navigate many complex regulatory and legislative landscapes to achieve many public policy successes including transitioning to a new Medicare payment and quality system, and developing, with the Centers for Medicare and Medicaid Services (CMS) and Office of the National Coordinator for Health Information Technology (ONC), a health information exchange (HIE) on the Nationwide Health Information Network (NwHIN).
Elizabeth Hart Thompson has nearly two decades of experience as a senior staff member on Capitol Hill and a lobbyist. She joined Prime from Crossroads Strategies, where she focused on health care, financial services and technology. Building on her extensive knowledge of the political and legislative processes, as well as, her dedication to team work, Elizabeth is particularly adept at developing and executing advocacy strategies that deliver meaningful results to clients.
Mitchell has been delivering trusted counsel across a diverse practice of legislative, policy and political issues for more than a decade. During his long-standing tenure both in Congress and throughout the political and policy sphere of Washington, he has tackled some of the largest healthcare, energy and regulatory issues presented before the federal government. He has a massive range of relationships and strategic congressional partnerships has paid dividends for consecutive congressional sessions. Mitch is a member of Prime Policy Group’s healthcare practice.