Washington Watch for March 2018

Carter L. Alleman, J.D.


Administration Releases Budget Request

The Trump Administration released its budget request for fiscal year (FY) 2019. The White House budget is considered an important outline of the President’s legislative priorities. The Administration’s plan would reduce the deficit by $3.6 trillion over the next decade. The proposal calls for $1.7 trillion in cuts to mandatory spending and receipts, and a two percent yearly reduction in non-defense discretionary spending after 2019.

The White House proposes to provide the U.S. Department of Health and Human Services (HHS) with $68.4 billion in discretionary budget authority, a 21 percent or $17.9 billion cut from currently enacted levels.

The White House budget includes a total of $17 billion in opioid-related spending for FY 2019, including $10 billion in new discretionary funding for HHS and $7 billion that remains unallocated to particular programs but available for key activities. The Administration says that the new funds will be used to expand access to prevention, treatment, and mental health services.

The Administration requests a cut of nearly $900 million for the CDC in FY 2019. The agency would receive $11.1 billion in total program-level spending, down from the current $12 billion spending level. The CDC would receive approximately $175 million in new funding as a part of the broader allocation through HHS to combat the opioid crisis.The recent Congressional budget agreement for FY 2018 and FY 2019, lawmakers are more likely to craft proposals based on those agreements.

Good Samaritan Advanced to the House

The House Energy and Commerce Committee advanced H.R. 1876, the Good Samaritan Health Professionals Act, to the full House of Representatives. This bill would shield health care professionals from liability from harm caused by any act or omission if: (1) the professional is serving as a volunteer in response to a disaster in a declared disaster area and (2) the act or omission occurs during the period of the disaster, in the professional’s capacity as a volunteer, and in a good faith belief that the individual being treated is in need of health care services.

McCaskill Report Links Opioid Manufacturers and Advocacy Spending

Senator Claire McCaskill (D-Mo.) has released a new report detailing $9 million in payments between 2012 and 2017 from five opioid manufacturers to 14 outside groups that work on issues related to chronic pain and opioids. She argues that the third-party patient and physician organizations, such as the Academy of Integrative Pain Management, the U.S. Pain Foundation, and the American Academy of Pain Medicine, were often advocates for increased opioid use, and were found to have lobbied against prescriber limits and the Centers for Disease Control and Prevention’s (CDC) 2016 opioid guidelines. She also notes the lack of transparency around the donations from the opioid manufacturers. Nonprofit patient and physician groups are not currently required to disclose their donors publicly.

Return of Short Term Health Plans

The Trump Administration has proposed to increase the availability of short- term health insurance plans that are exempt from many of the Affordable Care Act’s (ACA) consumer protections. The Obama Administration had reduced the plans’ maximum length from one year to three months in an effort to move more people into comprehensive coverage. The White House proposal would restore the 12-month limit on short-term plans. The Trump Administration argues that the plans offer consumers cheaper coverage and expand choice, competition, and access to health care. Detractors say the plans could destabilize the individual health insurance marketplaces and would undermine popular Obamacare provisions – like protections for pre-existing medical conditions and coverage of essential health benefits (EHBs).

The administration predicts that between 100,000 and 200,000 individuals would opt for short-term plans instead of Obamacare plans in 2019, and that the proposal would have a very limited impact on individual market premiums. The proposed rule is open for public comment until April 23.

Bipartisan Lawmakers Request Help in Limiting Online Drug Trade

Sens. Chuck Grassley (R-Iowa) and Dianne Feinstein (D-Calif.) have written to Google, Microsoft, Yahoo, and Pinterest regarding the role internet search engines and online marketplaces can play in combating the epidemic of opioid misuse and abuse. The lawmakers ask the companies to consider removing from their platforms content that advertises the use of or enables the sale of illicit narcotics, including prescription drugs without a valid prescription

Governors Release Bipartisan Health Reform

A bipartisan group of governors have released a blueprint for creating a lower cost, higher quality health care system that stabilizes the individual health insurance market and prioritizes value-based care. The plan was released by Governors. John Hickenlooper (D-Colo.), John Kasich (R-Ohio), Bill Walker (I-Alaska), Tom Wolf (D- Pa.), and Brian Sandoval (R-Nev.). The group recommends restoration of cost-sharing reduction (CSR)payments, consideration of the social determinants of health in the Medicaid program, incentives for healthier lifestyles, a shift toward value-driven care in Medicaid and state employee benefits, and an elimination of the health insurance tax for underserved areas. They urge the federal government to cut excessive red tape and encourage increased competition in the private sector to address provider system consolidation.

The governors also call for passage of the Alexander-Murray stabilization package. The blueprint notes the importance of a more streamlined, faster Medicaid waiver request process for states to have more flexibility and control over certain innovations, like in the areas of mental health care, prescription drug benefits, and essential health benefits (EHBs).

Bipartisan Budget Act of 2018 Enacted

The Bipartisan Budget Act of 2018 raises the budgetary spending caps on defense and domestic spending first imposed in 2011, which will increase federal spending by almost $300 billion. The budget agreement also suspends the debt ceiling for a year (until March 1, 2019).

The bipartisan budget agreement includes important public health and health care priorities:

  • Community Health Centers. $7.8 billion is provided to fully fund Community Health Centers (CHC) for two years.
  • CHIP. The six-year funding extension for the Children’s Health Insurance Program (CHIP) that Congress passed last month is extended to a full decade of funding for the program.
  • Medicaid DSH Payments. Scheduled reductions to Medicaid Disproportionate Share Hospital (DSH) payments will be delayed for two years.
  • Medicare Therapy Caps. Medicare therapy caps are permanently repealed.
  • IPAB Repeal. The bill repeals the Independent Payment Advisory Board (IPAB) created in the Affordable Care Act.
  • Physician Update. The budget agreement cut in half the 2019 Medicare physician fee schedule increase percent. The reduction will cost doctors $105 million in Medicare reimbursements in 2019 and a total of $1.85 billion over the next decade. The Medicare Access and CHIP Reauthorization Act (MACRA), which replaced the sustainable growth rate (SGR), specified that physicians would receive an annual increase of 0.5 percent from 2016 through 2019, followed by five years of no annual increases. The budget deal passed by Congress will impact the last year of MACRA’s scheduled annual increases.
  • MACRA Technical Changes. The bill grants CMS flexibility in applying the 30 percent resource use performance score for three years, while also providing the agency three additional years to ensure a gradual and incremental transition to the performance threshold. The bill also makes technical corrections to the application of the Merit based Incentive Payment System (MIPS) to covered professional services. Finally, the agreement updates the ability of the Physician- Focused Payment Model Technical Advisory Committee (PTAC) to further aid the development of physician led alternative payment models. he bipartisan budget agreement increases the budget caps allowing for additional funds for certain health priorities to be executed as a part of omnibus appropriations for FY 2018 and subsequent appropriations in FY 2019.

The final legislation dropped a provision opposed by the medical provider community that would have extended Medicare’s misvalued code initiative from 2018 to 2019. The deal does not include any measures to stabilize the individual health insurance market, but supporters are hopeful that such provisions will be included as a part of a long-term spending bill.

DEA Moves to Implement CARA

The U.S. Drug Enforcement Administration (DEA) has given nurse practitioners and physician assistants the authority to dispense buprenorphine from their offices. In an emailed statement last week, the DEA stated that it will allow the health care workers to become DATA-Waived qualifying practitioners who are allowed to prescribe the opioid maintenance drug to provide more treatment options for those suffering from addiction in rural and underserved areas. The regulatory action brings the DEA into conformity with the Comprehensive Addiction and Recovery Act (CARA), signed into law in 2016.

CDC Director Resigns

Director of the Centers for Disease Control and Prevention (CDC) Brenda Fitzgerald, MD has resigned amid a scandal involving her stock holdings. Dr. Anne Schuchat, Principal Deputy Director of CDC, has been tapped to lead the agency as Acting Director.

Bipartisan Lawmakers Inquire on Status of Product Shortages

Senators Marco Rubio and Richard Blumenthal have written to Commissioner of Food and Drugs Scott Gottlieb regarding the shortage of intravenous fluid bags and other medical products resulting from the effects of Hurricane Maria in Puerto Rico last year. The lawmakers ask when the products will become widely available, whether approval of new suppliers is temporary or permanent, and what Congress can do to assist with the situation.

The Food and Drug Administration (FDA) provided an update on the shortage, noting that this year’s worse-than-normal flu season and workarounds deployed by health care providers in the wake of this shortage have increased demand for saline and other products.

Most recently, the FDA was able to extend the expiration dates of certain products, including some 500 ml size saline bags, after carefully examining the data submitted by the company to ensure that it meets the FDA’s quality and safety standards. The FDA will continue to encourage companies to submit data to extend expiration dates for drugs in shortage. The FDA has also been working with manufacturers, such as Baxter and B. Braun, to import products into the U.S. from their foreign facilities, including most recently additional products from a Baxter facility in Brazil.