Washington Watch for November 2018
Carter L. Alleman, J.D.
Opioid Legislation Signed into Law
Lawmakers successfully reached a bipartisan, bicameral deal on legislation to address the opioid epidemic. The package represents a compromise on dozens of different measures advanced by eight House committees and five Senate committees. H.R. 6, the SUPPORT for Patients and Communities Act, was originally passed by the House in June.
The final 660-page compromise includes provisions to curtail the trafficking of illicit opioids, encourage the development of nonaddictive painkillers, and expand access to addiction treatment and prevention programs. The legislation would authorize nearly $8 billion for targeted response grants for states, grants for residential treatment programs for pregnant women with substance-used disorder (SUD), grants to support tracking and treating hepatitis C infections, and other grant programs. The bill would partially roll back the current restriction on federal Medicaid reimbursement for inpatient drug treatment programs. It would not, however, alter existing federal privacy rules for drug treatment records.
Lawmakers opted not to include a measure that would have reduced drug manufacturer’s contributions to close the Medicare Part D coverage gap. They also left out a measure that would have increased Medicare payments for opioid alternatives that treat post-surgical pain.
House Passes Labor-HHS Spending Bill, Averts Government Shutdown
The House of Representatives passed legislation (H.R. 6157) to fund the Departments of Defense, Labor, HHS, and Education by a vote of 361-61. The $854 billion package includes $178.1 billion for Labor-HHS-Education. The U.S. Department of Health and Human Services (HHS) will receive a total of $90.5 billion, a $2.3 billion funding increase. The majority of the funding increase will go toward the National Institutes of Health (NIH), which receives a $2 billion raise. The HHS minibus includes $6.7 billion in funding aimed specifically at combating the opioid crisis.
The legislation contains more than $7 billion in disaster aid in the aftermath of Hurricane Florence. The bill also includes a continuing resolution (CR) to extend spending levels for the seven remaining unfunded agencies of the federal government through December 7. This averts a partial government shutdown as fiscal year (FY) 2018 funding expired on October 1. President Trump signed the package into law.
House Passes Emergency Preparedness, Gag Clause Bills
The House of Representatives passed several health care bills. H.R. 6378, the Pandemic and All-Hazards Preparedness and Advancing Innovation Act of 2018, would reauthorize key emergency preparedness programs through 2023. Certain authorities for the HHS Assistant Secretary for Preparedness and Response (ASPR) began expiring at the end of September. While initially the House and Senate were moving toward a pre- conference agreement that both the chambers could pass before the elections, the House opted to pass its own legislation, which included MISSION Zero -- legislation to authorize grants to train and incorporate military trauma care providers into trauma centers. In response, the Senate released its language and is working to clear the legislation by unanimous consent. After the elections, the House and Senate hope to pass the final agreement and send it to the President.
The House also advanced two Senate-passed bills that would ban gag clauses in pharmacy contracts. S. 2553, the Know the Lowest Price Act of 2018 would prohibit pharmacy benefit managers (PBMs) from preventing pharmacists from telling Medicare Part D drug plan customers when they could save money by paying with cash instead of insurance. S. 2554, the Patient Right to Know Drug Prices Act would bar such contracts in employer provided insurance and coverage sold on the individual market. The measure would also require biosimilar patent settlements to be reported to the government. Both bills now head to the President’s desk for his signature. President Trump has already endorsed a ban on gag clauses; the policy was included as a part of the administration’s drug pricing blueprint.
The chamber plans to return on November 13.
Kavanaugh Sworn In As Supreme Court Justice
Brett Kavanaugh was sworn in as an associate justice of the Supreme Court on Saturday. The Senate confirmed Kavanaugh. Kavanaugh’s confirmation creates a strong 5-4 conservative majority.
Senators Request Details on New Insurance Scoring Model
Twelve Republican senators are requesting that the Congressional Budget Office (CBO) provide details about its development and testing of a forthcoming health insurance simulation model (HISIM). The model will be used to produce more accurate estimates of health insurance coverage and premiums for generating future baselines and cost estimates. The lawmakers encourage the agency to release additional information about the model to the public prior to when CBO plans to begin utilizing it in the spring of 2019. They request that CBO publish a description of the new model’s specifications, including the data it relies on, its estimation methods, and an explanation of its key assumptions, as well as any computer code. The senators also suggest that the new model be applied to re-estimate federal spending and coverage under the Affordable Care Act (ACA).
Surprise Billing Legislation Introduced
Sen. Maggie Hassan (D-N.H.) plans to introduce legislation to eliminate surprise medical bills for individuals with employer-sponsored health plans. The No More Surprise Medical Bills Act of 2018 would prohibit hospitals and providers from charging patients with medical emergencies more than the in-network amount. It would also require hospitals and providers to notify patients in non-emergency situations if services will be considered out-of-network. Without notification and consent, the provider could only charge the in network amount. The bill would establish an independent entity to resolve any disputes that arise between providers and health insurance plans.
Senate Rejects Effort to Overturn Insurance Regulation
Senate Democrats failed to reverse a regulation from the Trump administration that will expand the availability of short-term, limited duration health plans that do not have to comply with consumer protections of the Affordable Care Act (ACA). Democrats had attempted to use the Congressional Review Act, which allows for regulations to be overturned with a simple majority.
Lawmakers Request CMS Guidance on Use of Prior Authorization in MA
More than 100 members of the House of Representatives have written to Seema Verma, Administrator of the Centers for Medicare and Medicaid Services (CMS), asking the agency to issue guidance dissuading Medicare Advantage (MA) plans from using prior authorization. The letter was signed by 55 Republicans and 48 Democrats.
The lawmakers warn CMS that burdensome and often unnecessary prior authorization requirements may be preventing beneficiaries from receiving the care they need. They urge CMS to increase transparency around utilization management practices, streamline the prior authorization process, and report on CMS’ oversight of prior authorization in MA.
Administration Releases Drug Price Proposed Rule
The Trump administration issued a proposed rule last week that would require pharmaceutical manufacturers to disclose the wholesale acquisition cost (WAC), or list price, of their products in direct-to-consumer (DTC) television advertising. Under the proposal, companies would be required to state the list price of a 30-day supply or the usual course of treatment for any medication covered through Medicare or Medicaid that costs at least $35 a month. The information would be required to be posted in clear, legible text on screen at the end of the advertisement.
Companies that do not comply with the policy would be subject to potential litigation. Lawmakers from both sides of the aisle have expressed support for the proposal, which is expected to face legal challenges from industry.
Pharmaceutical companies, however, argue that the inclusion of list prices in advertisements could confuse consumers and even discourage patients from seeking treatment because the list price is often higher than what patients end up paying with insurance. Many experts believe that the proposal is unlikely to have a significant impact on the price of drugs. The proposed rule will be open for public comment for 60 days. According to U.S. Department of Health and Human Services (HHS) Secretary Alex Azar, the proposal will take effect “in the months ahead.”
Medicare Part B Payment Proposal Released
President Trump joined U.S. Secretary of Health and Human Services (HHS) Alex Azar delivered remarks on the cost of prescription drugs and to announce significant changes to the reimbursement of drugs in Medicare Part B. HHS’ Advance Notice of Proposed Rulemaking (ANPRM) proposes a payment plan for doctor-administered drugs in an effort to shift prices to a level more in line with prices in other countries and reduce what Americans pay for some treatments.
The proposal from the Centers for Medicare and Medicaid Services (CMS) would establish an international pricing index to be used as a reference in setting reimbursement for drugs paid for through Medicare Part B. The new model will encompass 50% of Part B drug expenditures and initially target drugs made by a single manufacturer. Over time, the goal of the model is to reduce the cost of those medications by 30 percent. The administration projects that this proposal would save $17.2 billion over the next five years.
The President also announced plans to change the way physicians are paid under Part B. Under the proposal, physicians participating in the demo would be paid a flat fee instead of a percentage add-on to the average sales price (ASP) and third party vendors would assume the financial risk physicians currently assume in today’s buy-and-bill system. The administration plans to issue an official proposed rule in the spring of 2019, with the five-year demo beginning in the spring of 2020. Secretary Azar stressed that the actions announced on Thursday are just a part of a series of steps the administration plans to take to lower drug costs.