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July 2019

Congress Approves Pandemic and All-Hazards Preparedness Legislation

The U.S. House of Representatives June 4 passed S. 1279, The Pandemic and All-Hazards Preparedness and Advancing Innovation (PAHPAI) Act of 2019. This legislation was first created to improve the nation’s response to public health and medical emergencies and called for appointing an Assistant Secretary of Preparedness and Response (ASPR) to oversee the nation’s preparedness for disaster response. The ASPR’s responsibilities would include implementation of the recommendations from the June 2016 National Academy of Sciences, Engineering and Medicine report, A National Trauma Care System: Integrating Military and Civilian Trauma Systems to Achieve Zero Preventable Deaths After Injury.

House Members Introduce Legislation to Support Rural Surgeons

Reps. Abby Finkenauer (D-IA), Adrian Smith (R-NE), Ron Kind (D-WI), and Darrin LaHood (R-IL) introduced H.R. 3302, the Keep Physicians Serving Patients Act of 2019. This legislation would address the fact that geographic practice cost indices (GPCIs) currently are calculated using inaccurate and outdated numbers that underestimate the cost of practicing in non-urban areas. More specifically, the Keep Physicians Serving Patients Act would establish a set minimum based on specific regions, which would ensure physicians are reimbursed appropriately for the care they provide, as well as help to incentivize new talent to practice in rural settings.

House Lifts Ban on Unique Patient Identifier

The U.S. House of Representatives passed a fiscal year (FY) 2020 spending package, which included an amendment language that would remove a 20-year mandate that prevented the U.S. Department of Health and Human Services (HHS) from spending federal dollars to adopt a Unique Patient Identifier. The amendment, introduced by Reps. Bill Foster (D-IL) and Mike Kelly (R-PA), was initially approved by the House Appropriations Committee as part of its FY 2020 Appropriations package for the Departments of Labor, HHS, Education, and Related Agencies. A Unique Patient Identifier would help to ensure that surgeons have a more accurate and consistent way of linking patients to their health information across the continuum of care.

Legislation to Address Prior Authorization in Medicare Advantage Introduced

Reps. Suzan Delbene (D-WA), Mike Kelly (R-PA), Roger Marshall, MD (R-KS), and Ami Bera MD (D-CA), introduced legislation, The Improving Seniors’ Timely Access to Care Act, H.R. 3107, which would protect patients from unreasonable Medicare Advantage (MA) plan prior authorization requirements. MA plans originally required physicians to obtain prior authorization as a means of controlling costs by reducing medically unnecessary tests and procedures. However, health plans now widely use prior authorization indiscriminately, creating hurdles and hassles for patients and their physicians, which can lead to delays or denials of necessary care.

The Improving Seniors’ Timely Access to Care Act would bring greater transparency to the prior authorization process by requiring MA plans to report to the Centers for Medicare & Medicaid Services (CMS) on the extent of their use of prior authorization and the rate of approvals or denials by service and/or prescription medication.

 Measles Cases Hit Record High

The Centers for Disease Control and Prevention (CDC) has reported that the number of measles cases this year has reached 971, the highest annual total in more than 25 years. The incidence rate is largely due to outbreaks in Orthodox Jewish communities in New York, which began eight months ago amid an increase of anti-vaccination attitudes. The nation risks losing its World Health Organization (WHO) designation for having eliminated measles if the outbreaks continue.

HHS Task Force Recommends Careful Use of PDMPs

U.S. Department of Health and Human Services (HHS) task force has recommended that state prescription drug monitoring programs (PDMPs) should not be used to stop a patient’s opioid prescription without appropriate consultations. The 29-member Pain Management Best Practices Interagency Task Force, which is comprised of both federal officials and specialists, warned that PDMPs may contain errors. Their report emphasizes the importance of individualized, patient-centered care in the diagnosis and treatment of pain.

CBO Works to Score Surprise Insurance Gap Legislation

The Congressional Budget Office (CBO) scored a number of legislative proposals to prevent surprise insurance gaps, according to congressional staff. Several bipartisan groups in both the House and Senate have released legislation to address surprise medical bills in recent months. The CBO has sent its preliminary budget estimates to lawmakers, but the full estimates are not yet public.

The agency examined a bill from a Senate working group led by Sens. Bill Cassidy (R-La.) and Maggie Hassan (D-N.H.). CBO found that their proposal, which includes a provision to allow payment disputes to be settled through arbitration, would save $17 billion over the next decade. CBO found that the bipartisan proposal from Senate Health, Education, Labor, and Pensions (HELP) Committee leadership to pay providers based on the median contracted rate would save $25 billion over the next decade. The provisions contained in the HELP draft bill to use arbitration for bills of more than $750 would save $20 billion over the next 10 years, but would cost $1 billion in administrative costs, while the panel’s network matching policy would save $9 billion.

Congressional Drug Pricing Negotiations

House Speaker Nancy Pelosi (D-Calif.) has reportedly made changes to her drug pricing plan in light of criticism from the Congressional Progressive Caucus (CPC). CPC chairs Mark Pocan (D-Wis.) and Pramila Jayapal (D-Wash.) had expressed concerns about the limited scope of the proposal from House leadership, which would require Medicare to negotiate prices on a minimum of 25 drugs per year. That number will now be increased to as many as 250 drugs, Rep. Pocan told reporters following a private meeting with the House Speaker last week. It is still unclear which drugs would be eligible for negotiation. Official legislation is not expected to be introduced before the Fourth of July recess.

Senate Judiciary Chairman Lindsey Graham (R-S.C.) has announced plans for his panel to markup drug pricing legislation this month. Graham stated that a bill from Sens. John Cornyn (R-Texas) and Richard Blumenthal (D-Conn.) to address the alleged gaming of the patent system and to enable the Federal Trade Commission (FTC) to take enforcement action against patent thickets used to delay competition would be included in the markup.

Surprise Insurance Gap Legislative Efforts

The Senate Health, Education, Labor, and Pensions (HELP) Committee held a hearing to consider the Lower Health Care Costs Act. The legislation, which includes a title to address surprise insurance gaps, was released by Chairman Lamar Alexander (R-Tenn.) and Ranking Member Patty Mur (D-Wash.). The lawmakers have said they are working to add two additional bipartisan policies to the legislation, the Prescription Drug Rebates Reform Act of 2019, which would require patient coinsurance obligations to be set as a percentage of net price rather than list price, and the Fair Accountability and Innovative Research Act, which would increase transparency around pharmaceutical company decisions that increase drug prices by more than 10 percent in a single year.

The Congressional Budget Office’s (CBO) preliminary assessment of proposed legislation from the Senate HELP Committee to address surprise insurance gaps finds that the bill could increase rates of hospital and provider consolidation. While the agency’s report has not yet been made public, preliminary scores of the draft bill have been leaked prior to CBO’s formal analysis. The package could save a combined $54 billion over the next decade.

Following a hearing on the panel’s own proposal to ban surprise insurance gaps, the House Energy and Commerce Health Subcommittee is working to revise its bipartisan draft bill to strengthen consumer protections provisions and consider what can be done about surprise bills from air ambulances.

Lawmakers Raise Concerns About Security, Identity Verification

A group of Democratic lawmakers is urging the administration to review its online identification verification systems following high-profile data breaches at Equifax Inc. and other companies. Sens. Elizabeth Warren (D-Mass.) and Ron Wyden (D-Ore.) and Rep. Elijah Cummings (D-Md.) have written to the Social Security Administration, CMS, the Department of Veterans Affairs, and USPS regarding the GAO’s recommendation to develop a strategy to transition away from “outdated identity-proofing methods.”

The lawmakers released the GAO’s report, which finds that current knowledge-based verification methods used when people apply for federal benefits and services put the public at increased risk of identity fraud. According to the GAO, the agencies have no specific or complete plans to eliminate knowledge-based verification and switch to other verification methods. The lawmakers request that the agencies “act quickly to address these concerns” and direct the Office of Management and Budget (OMB) to require them to report on progress made.

Health Reimbursement Arrangement Final Rule Released

The Trump administration has issued a final rule that would expand the use of health reimbursement arrangements (HRAs) used to compensate employees for medical expenses. Under the rule from the departments of Health and Human Services, Treasury, and Labor, employers will be allowed to use individual coverage HRAs to provide employees with tax-exempt funds to pay for health insurance coverage purchased in the individual market. In the past, HRAs could only be used in combination with employer-sponsored group health plans. The regulation could potentially impact 800,000 employers and more than 11 million employees and their family members.

HELP to Marked Up Lower Health Care Costs Act

The Senate Health, Education, Labor, and Pensions (HELP) Committee formally introduced a revised version of the bipartisan Lower Health Care Costs Act of 2019 (S. 1895) last week. The legislation would use a benchmark rate set at the median in-network payment for each insurer for a geographic area to compensate certain out-of-network health care providers. The legislation would extend the benchmark policy to air ambulance bills; air ambulance providers would be prohibited from sending balance bills to patients, and patients would only be required to pay the median in-network payment amount for air ambulance transport. Chairman Lamar Alexander (R-Tenn.) had previously stated that he would prefer an in-network guarantee approach (also known as network matching), but he was ultimately swayed by the Congressional Budget Office’s (CBO) findings that the benchmark rate policy would be the most effective means to lower health care costs. The surprise billing provisions contained in the Lower Health Care Costs Act are similar to the House Energy and Commerce Committee’s bipartisan No Surprises Act.

The HELP package, which also includes provisions to increase prescription drug competition and create more transparency in the health care system, will be marked up on June 26. Sen. Chris Murphy (D Conn.) has said that he may vote against the bill unless measures are added to address the administration’s recent efforts to undermine the Affordable Care Act (ACA), such as the funding cuts to enrollment outreach and the expansion of short-term, limited-duration health plans. Both Chairman Alexander and Ranking Member Patty Mur (D-Wash.) have stated that issues related to the ACA should be handled separately from the Lower Health Care Costs Act package.

Congressional Drug Pricing Negotiations

Senate Finance Committee Chairman Chuck Grassley (R-Iowa) has announced opposition to the White House’s international pricing index (IPI) proposal, which would tie the price Medicare pays for certain Part B prescription drugs to prices in other countries. Grassley had far been waiting for a formal proposed regulation to decide his stance on the policy but stated that he has now studied the issue for long enough to determine that it would not “be to the benefit of the adoption of and research for modern drugs.”

Despite it being touted as one of the administration’s key proposals to lower drug prices, the IPI policy has already been denounced by many congressional Republicans. The proposed rule was recently sent by the U.S. Department of Health and Human Services (HHS) to the White House for review. Sen. Grassley had previously aimed to release the Finance Committee’s own drug pricing package last week but announced that negotiations with Committee Democrats are still ongoing and that a bill is not likely to be unveiled before the Fourth of July recess. The Finance package is expected to include reforms to Medicare Part B as an alternative to the international pricing proposal. House Speaker Nancy Pelosi (D-Calif.) has stated that congressional leadership is making progress on prescription drug pricing negotiations with the White House, but that it is still unclear whether Congress will act on any legislation before the August recess.

MedPAC, MACPAC Release June 2019 Reports

The Medicare Payment Advisory Commission (MedPAC) released its June 2019 Report to Congress. The publication considers beneficiary enrollment in Medicare: eligibility notification, enrollment process, and Part B late- enrollment penalties; restructuring Medicare Part D for the era of specialty drugs; Medicare payment strategies to improve price competition and value for Part B drugs; a mandated report on clinician payment in Medicare; issues in Medicare beneficiaries’ access to primary care; assessing the Medicare Shared Savings Program’s effect on Medicare spending; ensuring the accuracy and completeness of Medicare Advantage encounter data; redesigning the Medicare Advantage quality bonus program; payment issues in post-acute care; a mandated report on changes in post-acute and hospice care after implementation of the long-term care hospital dual payment-rate structure; options for slowing the growth of Medicare fee-for-service spending for emergency department services; and promoting integration in dual-eligible special needs plans.

The Medicaid and CHIP Payment and Access Commission (MACPAC) has also released its June 2019 Report to Congress. The report contains chapters on Medicaid prescription drug policy, treatment of third-party payments in the definition of Medicaid shortfall, improving the effectiveness of Medicaid program integrity, therapeutic foster care, and the Medicaid program in Puerto Rico.