Health Policy Report

The Week in Review

House lawmakers finished a marathon debate on the first appropriations “minibus” package consisting of the Labor-Health and Human Services-Education, Energy and Water Development, Defense, and State-Foreign Operations spending bills. The bill passed the lower chamber on near party lines (226-203), with seven Democrats joining all House Republicans in voting against the four-bill package. The House also began consideration of the second minibus (text; amendments) last week, which includes the Agriculture, Commerce-Justice-Science (CJS), Interior-Environment, Military Construction-Veterans’ Affairs (VA) and Transportation-Housing and Urban Development (HUD) spending bills.

In addition to its work on appropriations, the House also passed (371-46) a suspension bill (H.R. 3253) out of the Energy and Commerce Committee that provides extensions for certain Medicaid programs. This includes extensions for: (1) the Money Follows the Person Rebalancing Demonstration; (2) protections for Medicaid recipients of home and community-based services against spousal impoverishment; and (3) the Community Mental Health Services Demonstration Program. The bipartisan measure would also seek to prevent low rebates under the Medicaid drug rebate program and would boost funding for the Medicaid Improvement fund.

In the upper chamber, Senators cleared five presidential nominees, including: (1) Sean Cairncross to be Chief Executive Officer of the Millennium Challenge Corporation; (2) Matthew J. Kacsmaryk to be a District Judge for the Northern District of Texas; (3) Allen Winsor to be a District Judge for the Northern District of Florida; (4) James Cain, Jr. to be a District Judge for the Western District of Louisiana; and (5) Greg Guidry to be a District Judge for the Eastern District of Louisiana. The Senate also cleared dozens of joint resolutions opposing arms sales to Saudi Arabia, the United Arab Emirates, and Jordan.

The Week Ahead

The House and Senate stand will return to action later this afternoon to kick off a busy week of floor activity. In the House, lawmakers will look to pass the second appropriations “minibus” early this week prior to moving onto consideration of the spending bill for Financial Services and General Government (FSGG). House Majority Leader Steny Hoyer (D-MD) stated last week that it’s possible that the spending bills for the Legislative Branch and Homeland Security could get tacked onto the FSGG bill, as Democratic leadership has stressed that they want to clear all 12 appropriations measures prior to the Independence Day district work period. Both chambers of Congress are also poised to begin consideration of their respective versions of the National Defense Authorization Act (NDAA) (H.R. 2500; S. 1790). 

Meanwhile, Congress is poised to begin a contentious debate over President Donald Trump’s funding request for “humanitarian needs” at the U.S.-Mexico border. Senate Majority Leader Mitch McConnell (R-KY) stated last week that he plans to bring a bipartisan $4.6 billion supplemental appropriations bill for a vote prior to the Independence Day district work period. The House — which released a $4.5 billion measure that includes less money for Immigration and Customs Enforcement (ICE) and extra oversight demands not included in the Senate bill — is aiming for a Tuesday vote on its measure, which will likely need to be reconciled in a conference committee between the two chambers.

HHS Sends ‘International Pricing Index’ Proposal to OMB

Late last week, the Department of Health and Human Services (HHS) sent a proposed rule on the International Pricing Index (IPI) Model for Medicare Part B Drugs to the Office of Management and Budget (OMB) for review. The proposal, which was first floated in an Advance Notice of Proposed Rulemaking (ANPRM) last October, would reduce payments for Part B drugs to a level more closely aligned with prices in other countries. For months, health policy watchers and well-placed sources on Capitol Hill have speculated that the IPI Model might be leveraged by Democrats in Congress to gain passage of less drastic changes to drug reimbursement under Medicare Part B, but given the austere cuts that could see Part B drug reimbursement eventually reduced by 30 percent, there have always been significant doubts that the ANPRM would ever be implemented. Several influential Republicans have raised concerns with the proposal, and just last week, Senate Finance Committee Chairman Chuck Grassley (R-IA) announced his opposition to the idea.

Nevertheless, OMB now has 60 days (officially) to complete its review, although extensions of the regulatory review period are common. As contemplated in the ANPRM, CMS initially envisioned that the IPI Model would start in Spring 2020 and operate for five years, concluding in 2025. Additionally, with two major proposals on drug pricing now under review by the White House budget office (e.g. the 'rebate rule' and IPI), speculation will only increase over how negotiations might proceed around these rules in addition to a major drug pricing package that is currently being hashed out in Congress.

HELP Committee Formally Introduces Updated Drug Pricing, Surprise Billing Legislation

Senator Lamar Alexander (R-TN) introduced bipartisan legislation from the Senate Health, Education, Labor, and Pensions (HELP) Committee last week that seeks to address surprise billing, lower drug costs, and improve health IT. The Lower Health Care Costs (LHCC) Act contains over 30 proposals from Senators on both sides of the aisle. The Committee chose to use regional benchmarks as a mechanism for settling payment disputes in which, under the legislation, patients would be held harmless. The Committee also added several provisions to the legislation, including a clarification of conditions of use on biosimilar applications, a modernization of generic drug labeling, and protections against surprise bills resulting from air ambulance use.

The bill is scheduled for markup this Wednesday, June 26. Ultimately, the legislation may be packaged with forthcoming proposals from the Senate Finance Committee, which is expected to tackle issues such as an out-of-pocket cap in Part D, reforms to Part B drug payments, and pharmacy benefit manger (PBM) rebates. With lawmakers in both parties eager to produce results on surprise billing and drug pricing, any eventual package may be picked and chosen from the least controversial provisions of a number of proposals from House and Senate committees.

President Trump Suggests New Health Plan Coming Soon

In an interview with ABC News last week, President Trump suggested that he would unveil a new health care plan in the next couple of months that will be a “key focus” of his 2020 reelection campaign. He noted that the administration already has “the concept” of the plan, and would be announcing in two months or less. Although the President offered few other details around his future health plan, he applauded the administration’s ongoing effort to make the Affordable Care Act “serviceable.” Republican lawmakers reported last week that they had little idea of what to expect from the President’s plan and said there hadn’t been communication from the administration on the issue.

FDA Releases Updated Opioid Analgesics Benefit-Risk Framework

Last Thursday, the FDA issued a new draft guidance updating the agency’s benefit-risk assessment framework for opioids to include considerations about the broader public health effects of these products in the context of this crisis. In a statement accompanying the release, FDA’s Acting Commissioner Ned Sharpless and Deputy Director for Regulatory Programs Douglas Throckmorton said the guidance aims to ensure product approval and removal decisions are science-based and that the agency’s benefit-risk framework considers not only the outcomes of prescription opioids when used as prescribed, but also the public health effects of inappropriate use. The release of new FDA guidance also follows the World Health Organization's (WHO) decision to withdraw its own guidelines on opioids.

The new draft guidance lays out a series of provisions the FDA will consider in fully assessing the effectiveness and safety of a new opioid, including the benefits, risks, and public health implications of approving a product. However, the agency caveats this by saying that while the comparative data is helpful in applying the benefit risk framework, “superiority to other available treatments is not a requirement for approval under FDA’s drug approval authorities.” The agency is accepting comments on the guidance through August 20. The FDA also plans to issue additional guidance that will outline appropriate clinical endpoints and clinical trial approaches for the development of non-opioid drugs for use in the treatment of acute and chronic pain. Additionally, the agency will hold a public meeting on September 17, titled “Standards for Future Opioid Analgesic Approvals and Incentives for New Therapeutics to Treat Pain and Addiction."

CMS Proposes Updates to Part D E-Prescribing Standards

The Centers for Medicare & Medicaid Services (CMS) announced a proposed rule to update e-prescribing standards for Medicare Part D. The proposed rule aims to create efficiencies in the prior authorization (PA) process for Part D covered medications by updating the standards that govern e-prescribing practices. CMS Administrator Seema Verma explained in a prepared statement that the proposed rule would “reduce the time it takes for a patient to receive needed medications and ease the prescriber burden by giving clinicians the flexibility and choice to complete prior authorization transactions electronically.” Stakeholders will have until August 16 to comment on the proposed rule. If the rule is finalized, the proposed standards would take effect in January 2021.

CMS is proposing to streamline the process for prior authorization for Part D prescriptions by allowing clinicians to choose to complete prior authorization online. The health agency explained that clinicians who choose the online process should be able to complete the prior authorization terms in real time and before a prescription is transmitted to a pharmacy — reducing the chance that patients find out their prescription cannot be filled once they arrive at the pharmacy. Also under the rule, CMS is proposing to require that all Medicare Part D plans to support the National Council for Prescription Drug Programs' SCRIPT standard for four electronic prior authorization purposes. CMS estimates that the rule would have a one-time implementation cost of about $100,000 per plan, and around 20 percent of the total 750 plans would need to make changes in order to implement the new standards. The proposed rule is projected to save a net $3.7 million annually in administrative costs, according to CMS.

Study Finds Medicaid Work Requirements Not Tied to Rise in Employment

The first major study to examine Medicaid work requirements found that work requirements tied to Medicaid implemented in Arkansas last year caused thousands to lose health insurance and did not boost employment among low-income individuals. The study, published last Wednesday in the New England Journal of Medicine, examined the impact of the requirements during the first six months they were in effect, and contradicts the Trump administration’s prediction that Medicaid work requirements would help lift individuals out of poverty.

The authors found that the percentage of uninsured Arkansans increased 4 percent over the period, compared to no change in the uninsured rate in similar groups in other states. Additionally, employment declined for the group of beneficiaries from 42.4 percent to 38.9 percent, although the groups from other states saw a similar decline in employment. The authors noted that the implementation of the work requirements was plagued by confusion among many enrollees, with one-third of the beneficiaries who were subject to the work requirements saying they had not heard anything about them and 44 percent of the target population unsure whether the requirements applied to them. The study has already been criticized by Arkansas’ health department for lacking detail on individual health status or effort to re-enroll in Medicaid.