Washington Healthcare Update - July 14, 2015

This Week: 21st Century Cures Legislation Passes House in Bipartisan Vote... CMS Releases Proposed CY 2016 Home Health Prospective Pay Rule... CMS Releases Final CY 2016 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System Rule and Changes to the Two-Midnight Rule

1. Congress

   House

   21st Century Cures Legislation Passes House in Bipartisan Vote

   The House passed the 21st Century Cures Act by a 344-77 tally on Friday, July 10. The vote shows a strong bipartisan support for the multifaceted proposal to speed approval of devices and drugs. The legislation would increase National Institutes of Health funding by $8.75 million in mandatory funding over the next five years. That amount is considered a major increase for the agency although less than was originally promised. The Food and Drug Administration (FDA) will receive $550 million to help implement the law that includes changes on how the agency reviews some new drugs and devices so products get to market faster.

   Since the bill was reported out of the House Energy and Commerce Committee in May, much of the discussion has been about how to pay for the proposal. The insurance industry opposed taking up to $7 billion from private Medicare Part D prescription drug plans, forcing policy-makers to look for alternatives. The drug industry successfully fought two proposed pay-fors, including a new policy on how Medicare would pay for biosimilars and a change to Medicare's low-income subsidy.

   Lawmakers instead kept the other offsets included in the committee-passed bill and increased the amount of oil they would sell off from the Strategic Petroleum Reserve. The bill now includes several pay-fors: trimming federal payments for generic drugs; a $300 million pay-for related to infused drugs; and several pay-fors related to durable medical equipment.

   The legislation also includes an extension of the Centers for Medicare and Medicaid Services (CMS) wheelchair prior authorization demonstration, which has reduced Medicare spending on power wheelchairs. The extension is likely to save more money. CMS previously authorized a demonstration for power mobility wheelchairs in 2012, and announced an expansion in 2014. The demonstration was set to end in August 2015; however, the legislation extends it through Aug. 31, 2018, and adds more states.

   Five amendments were agreed to by voice vote when the bill was considered on the floor of the House:

   A sense of Congress resolution that recording unique device identifiers at the point-of-care in electronic health record systems could significantly enhance the availability of medical device data for postmarket surveillance purposes. An amendment directing CDC to conduct a study to determine how additional Medicare payments for antimicrobials are affecting the development of drug resistance. An amendment to give NIH authority to incentivize health innovation by offering competitors the chance to win a prize for creating breakthrough research and technology. An amendment aimed at ensuring underrepresented individuals, such as women and minorities, are included in the Supporting Young Emerging Scientists Report. An amendment directing the HHS secretary to conduct outreach to Historically Black Colleges and Universities, Hispanic-serving Institutions, Native American colleges and rural colleges to ensure that health professionals from underrepresented populations are aware of research opportunities under the Cures bill. The Administration outlined a number of concerns over the legislation, including that FDA's responsibilities would exceed the resources provided, making the agency unable to implement the law. The Administration is also concerned about how the extensions on patent exclusivity will impact drug costs and whether regulatory standards will be undermined in the rush to bring new products to market. However, the Administration did praise the inclusion of the President's Precision Medicine Initiative, including patients' voices into the FDA decision-making and reducing barriers to medical device trials.

   OMB has outlined a host of Obama administration concerns over 21st Century Cures, including providing NIH with additional funding without addressing the broader budget problems posed by sequestration. In a Statement of Administration Policy, OMB also says the FDA's new responsibilities would "exceed the resources provided," which would make the agency unable to fully implement the bill while "maintaining its current performance levels." The administration is also concerned about how the extensions on patent exclusivity will impact drug costs and whether policies to bring drugs to market faster will undermine regulatory standards. But the statement also contains praise, for the bill's support of the president's Precision Medicine Initiative and its steps to incorporate patients' voices into FDA decision-making, further develop reliable biomarkers and reduce barriers to medical device trials.

   The Senate has been working on its own version of the Cures bill. Its timing is unclear.

   Energy and Commerce Health Subcommittee Holds Hearing on 50-Year Anniversary of Medicaid

   The Energy and Commerce Subcommittee on Health, chaired by Rep. Joe Pitts (R-PA), held a hearing July 8 entitled "Medicaid at 50: Strengthening and Sustaining the Program." Witnesses from the Centers for Medicare and Medicaid Services (CMS), Government Accountability Office (GAO), and Medicaid and CHIP Payment and Access Commission (MACPAC) testified. At the hearing, claims of CMS favoritism and of inconsistent oversight of Section 1115 demonstrations were a key theme. "It's well known that some states get CMS approval for a specific proposal, while the CMS will deny another state for a very similar proposal," said Rep. Joe Pitts (R-PA). Furthermore, in the hearing several Republican committee members relayed concerns surrounding the growing financial impact of Medicaid on federal and state budgets, delivery system reforms and access to health care.

   Witness List

   Vikki Wachino Deputy Administrator, Centers for Medicare & Medicaid Services (CMS) Director, Center for Medicaid and CHIP Services, CMS

   Carolyn Yocom Director, Health Care Government Accountability Office (GAO) accompanied by Katherine Iritani, Director, Health Care, GAO

   Anne Schwartz Executive Director Medicaid and CHIP Payment and Access Commission (MACPAC)

   For more information or to view the hearing visit energycommerce.gov.

   Upcoming: Energy and Commerce Subcommittee on Oversight and Investigations to Hold Hearing on Medicare Part D Program Integrity

   The Subcommittee on Oversight and Investigations, chaired by Rep. Tim Murphy (R-PA), has scheduled a hearing entitled "Medicare Part D: Measures Needed to Strengthen Program Integrity," for Tuesday, July 14, at 2 p.m. in Room 2322 of the Rayburn House Office Building. The Medicare prescription drug program was established to provide an optional prescription drug benefit for Medicare beneficiaries. The Department of Health and Human Services Office of Inspector General recently released two reports, "Ensuring the Integrity of Medicare Part D" and "Questionable Billing and Geographic Hotspots Point to Potential Fraud and Abuse in Medicare Part D ," that highlight weaknesses that make Medicare Part D fraud and abuse possible. Subcommittee members will discuss ways to ensure that the program operates more effectively and has working fiscal oversight, and that critical drug cost benefits are upheld for seniors.

   For more information or to view the hearing, visit energycommerce.gov.

   Congress Expands Medicare Coverage for Acute Dialysis Services

   On June 29, 2015, President Obama signed into law the Trade Preferences Extension Act (H.R. of 2015 (H.R. 1295), which provides for Medicare reimbursement for renal dialysis services furnished to individuals with acute kidney injury. This measure, which takes effect on Jan. 1, 2017, has been long awaited by dialysis providers. CMS had taken the position that hospital outpatients may receive acute dialysis only in a hospital or in locations that qualify as provider-based departments of the hospital if they want those services reimbursed by Medicare. Its July 2012 statement presented considerable confusion in the dialysis community regarding whether CMS was also stating that Medicare-certified facilities could provide acute dialysis services. The legislation now ensures that dialysis facilities will be reimbursed for acute dialysis treatments rendered to Medicare beneficiaries as of Jan. 1, 2017. Further, payment for furnishing acute dialysis services "shall be the base rate for renal dialysis services determined for such year."

   More information on the measure can be found here.

   GOP Doctors' Caucus Sends Letter to HHS on U.S. Preventive Services Task Force Mammogram Draft Guidelines

   The Republican Doctors Caucus sent a letter to Department of Health and Human Services Secretary Sylvia Burwell urging the agency to forgo finalization of the U.S. Preventive Services Task Force's (USPSTF) recent draft guidelines recommending the "C" grade assigned to screening mammograms for women between the ages of 40 and 49. Signers of the letter believe the recommendation would have a "chilling effect" on insurance coverage of mammograms and "will limit access to this valuable diagnostic tool." The issue has bipartisan support; Democrats on the House Appropriations Committee inserted language in the Department of Health and Human Services (HHS) appropriations bill that would delay the effects of the guidelines for one year.

   Senate

   Senate HELP Committee Holds Hearing on Small Business Health Care Challenges

   In a partisan hearing, three small business owners testified to the Senate Health, Education, Labor, and Pensions' Subcommittee on Primary Health and Retirement Security on July 7 that problems within the Affordable Care Act (ACA) are leading to more expensive insurance policies for...