Weekly Washington Healthcare Update - June 29, 2015

This Week: Federal Subsidies Upheld by SCOTUS in King v. Burwell... How to Pay for 21st Century Cures Bill Discussions Continue... Senate Appropriations Committee Approves HHS FY 2016 Budget... How to Pay for 21st Century Cures Bill Discussions Continue... CMS Releases Proposed 2016 Medicare Dialysis Pay Rule

1. U.S. SUPREME COURT - KING V. BURWELL

   Federal Subsidies Upheld by SCOTUS in King v. Burwell

   In a 6-3 decision, the Supreme Court upheld that the Affordable Care Act's (ACA) premium tax credits are indeed available to individuals in states that are serviced by federal exchanges. In his opinion for the majority, Chief Justice Roberts wrote that the ACA adopted reforms that are closely intertwined: guarantee issue and community rating, requiring coverage or payment to the Internal Revenue Service, and affordability. The tax credits make insurance more affordable by giving refundable tax credits to individuals with household incomes between 100 percent and 400 percent of the federal poverty level. The court found that pulling out the tax credit provision would create a "death spiral," because if people did not have subsidies they would be exempt from coverage. As it stands, 16 states and the District of Columbia have created their own state-based exchanges, and 37 states rely to varying degrees on the federal exchange via healthcare.gov. A more detailed summary of the decision and its implications can be found here.

2. CONGRESS

   House

   How to Pay for 21st Century Cures Bill Discussions Continue

   In a report released June 23, the Congressional Budget Office (CBO) estimated that implementing H.R. 6, 21st Century Cures Act, would cost $106.4 billion from 2016-2020 while simultaneously reducing direct government spending by $11.9 billion over the 2016-2025 period. CBO says the bill, which unanimously passed out of the House Energy and Commerce Committee on May 21, includes specific department/agency costs of: $105.0 billion (National Institutes of Health), $872 million (Food and Drug Administration), $35 million (Centers for Disease Control), $427 million (Department of Health and Human Services (HHS) programs and $21 million (for other Departments and agencies) for years 2016-2020.

   While there will not be a vote until later this summer, House leadership has begun to have conversations with congressional offices about the bill and circulate a list of potential policies that would pay for the proposal. On the list to pay for the proposal are the following policies:

   Accelerating the modernization of X-ray imaging Part D provider and patient assignment Limit federal Medicaid matching funds for DME reimbursement to Medicare rates Selling off excess capacity in the Strategic Petroleum Reserve A policy considered controversial related to Medicare Part D reinsurance has been dropped because of concerns raised by Ways and Means Committee members. The House Energy and Commerce Committee chairman continues to seek pay-fors for the bill.

   House E&C Health Subcommittee Holds Hearing on Medicaid Section 1115 Demonstration Projects

   The Energy and Commerce Subcommittee on Health held a hearing on June 24, 2015, entitled "Examining the Administration's Approval of Medicaid Demonstration Projects." Medicaid Section 1115 demonstrations projects have been used by some states to expand Medicaid up to 138 percent of the federal poverty limit, as outlined under the Patient Protection and Affordable Care Act (PPACA). The hearing centered on an April Government Accountability Office (GAO) report that determined that Centers for Medicare and Medicaid Services (CMS) Medicaid Section 1115 demonstration projects have duplicated other federal programs. The GAO also found that other demonstration projects helped middle-income Americans rather than the low-income beneficiaries. At the hearing, members questioned the GAO whether CMS may be trying to pressure states into expanding Medicaid when those states look for Medicaid 1115 waiver approval; others questioned witnesses about the transparency, predictability and budget neutrality of the waivers. The witness testimony of the second panel, however, asked lawmakers for added flexibility in the program itself. According to the GAO, in FY 2014, Section 1115 demonstrations accounted for close to one-third of total Medicaid expenditures. The agency recommended in May that CMS issue criteria for whether 1115 expenditures are likely to promote Medicaid objectives and ensure that application of those criteria is documented in the Department of Health and Human Service's approvals of 1115 waivers.

   Witness List

   Panel 1

   Katherine Iritani Director Health Care Government Accountability Office

   Panel 2

   Haley Barbour former Governor of Mississippi and Founding Partner BGR Group

   Matt Salo Executive Director National Association of Medicaid Directors

   Joan Alker Executive Director Georgetown University Center for Children and Families

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

   House E&C Health Subcommittee Holds Hearing on Public Health Bills

   The House Energy and Commerce Subcommittee on Health held a hearing on June 25 entitled "Examining Public Health Legislation: H.R. 2820, H.R. 1344, and H.R. 1462." Subcommittee members discussed the three bipartisan bills related to health care for newborns, infants and children.

   Members discussed and sought witness testimony on the following bipartisan bills:

   H.R. 2820, the Stem Cell Therapeutic and Research Reauthorization Act, introduced by Reps. Chris Smith (R-NJ) and Doris Matsui (D-CA), reauthorizes the Stem Cell Therapeutic and Research Act of 2005, which provides federal support for cord blood donation and research to increase patient access to transplants. H.R. 1462, the Protecting Our Infants Act of 2015, introduced by Reps. Katherine Clark (D-MA) and Steve Stivers (R-OH), would mandate that HHS develop a study and subsequent recommendations for preventing and treating prenatal opioid abuse and neonatal abstinence syndrome; review existing programs and develop a more coordinated strategy; and provide additional technical assistance to states to improve the availability and quality of data collection and surveillance activities regarding neonatal abstinence syndrome. H.R. 1344, the Early Hearing Detection and Intervention Act of 2015, authored by Health Subcommittee Vice Chairman Brett Guthrie (R-KY) and Rep. Lois Capps (D-CA), to reauthorize a program for early detection, diagnosis and treatment of deaf and hard-of-hearing newborns, infants and young children in the Public Health Service Act. Witness List

   Joanne Kurtzberg, M.D. President Cord Blood Association

   Jeff Chell, M.D. Chief Executive Officer National Marrow Donor Program

   Patti Freemyer Martin, Ph.D. Director of Audiology and Speech Language Pathology Arkansas Children's Hospital

   Stephen W. Patrick, M.D., M.P.H., M.S. Assistant Professor of Pediatrics and Health Policy Department of Pediatrics Vanderbilt University School of Medicine

   Mishka Terplan, M.D., M.P.H., FACOG Medical Director Behavior Health System Baltimore

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

   Bicameral Democratic Health Committee Leaders Send Letter to HHS Concerning Unfinished Final Medicaid Equal Access Rule

   On June 22, Democratic committee leaders in both the House and Senate sent a letter to U.S. Department of Health and Human Services (HHS) Secretary Sylvia Burwell urging the agency to finalize a regulation proposed by the Centers for Medicare and Medicaid Services (CMS) in 2011 that would better enforce Medicaid's equal access provision. Safety net hospitals earlier this year, however, expressed concerns about how effective the proposed rule would be. The letter comes following a March 2015 Supreme Court decision in Armstrong v. Exceptional Child that providers cannot bring a claim against states for paying illegally low rates and must rely on HHS to take administrative action instead. The lawmakers urged, "CMS must provide firm and immediate oversight to ensure that states are setting and maintaining their Medicaid rate structures as Congress intends in section 1902(a)(30)(A) of the Medicaid Act—consistent with efficiency, economy and quality of care and at levels sufficient to ensure that care and services are available to Medicaid enrollees at least to the extent they are available to the general population in the geographic area." The letter was sent by House Energy and Commerce Committee Ranking Member Frank Pallone, Jr. (D-NJ), Senate Finance Committee Ranking Member Ron Wyden (D-OR), Senate Finance Health Care Subcommittee Ranking Member Debbie Stabenow (D-MI), House Energy and Commerce Health Subcommittee Ranking Member Gene Green (D-TX), House Ways and Means Committee Ranking Member Sander Levin (D-MI) and House Ways and Means Health Subcommittee Ranking Member Jim McDermott (D-WA).

   A copy of the proposed rule can be found here.

   House W&M Oversight Subcommittee Holds Hearing on Rising ACA Premiums

   House Committee on Ways and Means Subcommittee on Oversight Chairman Peter Roskam (R-IL) held a hearing June 24 to discuss the effects of the Affordable Care Act (ACA) on health insurance premiums. He called the hearing after some states published high rate increase requests by several big health insurers, including increases of 51.6 percent in New Mexico, 36.3 percent in Tennessee and 30.4 percent in Maryland. At the hearing, which was largely partisan in nature, Chair Roskam said, "Now, for the first time since the ACA became law, insurers are able to look at a full year's worth of claims data to calculate premium prices for the year ahead. The proposed premium hikes tell us a lot about how much health care cost last year and what insurers calculate health care will cost this next year. On June 1, CMS made public proposed premium hikes of 10 percent or more for the 2016 plan year, and many of the proposed increases are eye-poppingly huge." Minority...