Health Policy Report

The Week in Review
 
Ahead of their brief recess this week, last week lawmakers in the Senate tried to complete the first appropriations measure of the year, while the House considered a set of financial services bills and a resolution disapproving of a recently finalized Department of Labor (DOL) rule.

The Senate had less success than their House counterparts, as a partisan disagreement over a pending agreement with Iran derailed the Energy-Water Development spending bill (H.R. 2028). On Wednesday, Sen. Tom Cotton (R-AR) submitted an amendment to the bill that would forbid the Obama Administration from completing a deal to purchase heavy water – a form of water used in nuclear reactors – from the Islamic Republic. While the purchase is unrelated to the contentious nuclear deal struck between the U.S. and Iran last year, Democrats quickly deemed the amendment a “poison pill” and the White House said it would veto the bill if it were sent to the president’s desk. Senators will try to break the impasse when they return from recess next week and may seek to combine the next two appropriations bills due for floor consideration – the Transportation-HUD and Military Construction-VA spending measures – into an appropriations minibus that also could include emergency funding sought by the White House to combat the Zika virus.
 
The House last week approved a pair of financial services measures that received broad bipartisan support. On Wednesday, House lawmakers passed a bill (H.R. 4498) that would give startup businesses greater access to so-called “angel investors,” or those that fund early stage entrepreneurs and often act as mentors, on a 325-89 vote. Members followed that up on Thursday by unanimously approving a bill (H.R. 2901) intended to bolster the private market for flood insurance. The bipartisan spirit was short-lived, however, as lawmakers held a party-line vote approving a resolution that would nullify a DOL rule related to retirement investment advice. The rule – which would legally require advisers to act in their clients’ best interest – has been criticized for limiting low-income savers’ access to advice. The White House has suggested it would veto the resolution of disapproval should it be approved in the Senate.
 
The Week Ahead
 
After a busy three-week work session, both chambers are in recess this week. The Senate is due to return on Monday, May 9, with the House to reconvene a day later on Tuesday, May 10.
 
House E&C, Judiciary Panels Advance Opioid Bills; Floor Consideration Expected Early May
 
Last week, the House Energy and Commerce Committee completed a three-day markup that saw approval of twelve bills targeting opioid abuse, while the House Judiciary Committee advanced their own version (H.R. 5046) of a Senate-passed opioid package, the Comprehensive Addiction and Recovery Act (CARA) (S. 524). Completion of both markups last week sets up House floor consideration when the lower chamber returns from its week-long recess the week of Monday, May 9.
 
In the Energy and Commerce session, Democrats tried to press Republicans on adding additional streams of funding for opioid abuse programs, but an amendment to appropriate $1 billion to improve opioid prescribing practices over two years failed narrowly (22-24). Other Democratic amendments, including provisions to increase the number of patients a physician can treat for opioid abuse and require additional training for opioid prescribers, also failed. However, a bill (H.R. 4978) to require the Government Accountability Office (GAO) to submit a Congressional report on the treatment of neonatal abstinence syndrome (NAS) was successfully amended to include a provision excluding abuse-deterrent prescription drug formulations from the Medicaid additional rebate requirement for new prescription drugs. 
 
Sen. Rob Portman (R-OH) and others in the Senate have already criticized changes made by the lower chamber in the emerging opioid package, such as the House Judiciary Committee’s move to reduce the number of grant programs targeted for opioid abuse treatment and prevention (H.R. 5052), and the House package’s lack of a provision that would make it harder for patients to seek opioid prescriptions from multiple doctors. House Majority Leader Kevin McCarthy has called those changes a “streamlining,” and has asserted that the overall House bill is a “real improvement” over its Senate counterpart. These differences could complicate the eventual conferencing of a bicameral opioids package – one of the few major bipartisan initiatives that is likely to become law in 2016.
 
CMS Issues Foundational MACRA Proposed Rule; Includes Flexible Choices for Doctors
 
On Wednesday, the Centers for Medicare and Medicaid Services (CMS) released a highly-anticipated proposed rule, setting the foundation for the new Merit-based Incentive Payment System (MIPS) and upcoming incentives for participation in Alternative Payment Models (APMs) pursuant to the latest ‘doc fix’ – the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). The plan offers health care providers flexibility in how their performance will be judged under the new value-focused payment system, in which doctors and other physicians will see their payments in 2019 and beyond adjusted to reflect how well they did on Medicare's performance metrics. Doctors must now choose between joining APMs – in which they face greater financial risks or rewards based on how Medicare judges their performance – or adapting to MIPS.
 
Under the draft rule, MIPS will allow doctors to choose the metrics for judging their performance from among a range of approved quality measures, with an emphasis on those that reflect the actual results in their patients. The rule outlines four performance categories, including: (1) quality, (2) resource use, (3) clinical practice improvement activities, and (4) meaningful use of an electronic health record system. According to the rule, quality performance will represent 50 percent of the total score in the first year and doctors and other healthcare providers will be allowed to choose to report six measures from among a range of options that accommodate differences among specialties and practices. ‘Resource use’ will account for 25 percent of the score in the first year, in which doctors and other healthcare providers will be allowed to choose to report customizable measures that reflect how they use technology in their day-to-day practice. Additionally, clinical practice improvement activities will account for 15 percent of the total score and will reward activities focused on care coordination and patient safety.
 
While the concession to allow provider flexibility is likely to satisfy some, a number of stakeholders expressed opposition to the released draft last week. For example, while the American Hospital Association was pleased with changes proposed on reporting requirements, they raised objection to the standards CMS set for APMs to qualify under the law. Likewise, groups representing doctors and hospitals that participate in some value-based programs, such as certain accountable care organizations (ACOs), expressed disappointed that some of their systems would not count as APMs under the rule. Others, including health systems who formed ACOs under the Medicare shared savings ACO program's so-called "first track" – which share in savings but not losses – expressed further frustration that they would not receive bonus payments under the rule. They called the Administration's decision to limit APM eligibility to only those ACOs that agreed to lose money if they did not meet goals “short-sighted,” and said that other ACOs will likely withdraw from the program. Meanwhile, a spokesperson for the National Committee for Quality Assurance said CMS should be commended for awarding full credit in the MIPS scoring system for clinical practice improvement activities to physician practices that are recognized as patient-centered medical homes and patient-centered specialty practices.
 
Senate GOP Urges CMS to Rescind Medicare Part B Demo; Dems Raise Tepid Concerns
 
Last Thursday, Democrats and Republicans on the Senate Finance Committee sent respective letters to the Centers for Medicare and Medicaid Services (CMS) raising varying levels of concern with a proposed Medicare Part B demonstration.  The controversial nationwide pilot program would let Medicare alter what it spends on drugs administered in the hospital or doctor's office to test whether its current payment model encourages doctors to use more expensive medicines that are not necessarily the most effective. Committee Republicans, in their letter, pressed CMS to withdraw the demonstration proposal because the changes could “decrease the quality of beneficiary care and increase Medicare costs.” They also advised CMS not to move forward because the agency did not consult with outside experts prior to changing the rule and based their decisions on “a hunch” that it would work.
 
Meanwhile, Committee Democrats stopped well short of asking CMS to withdraw the demo, while suggesting that the changes are “too significant and complex” to implement without more research and added measures to protect consumers. They asked CMS to ensure that beneficiaries will still have access to any needed medications during the demonstration, and pressed the agency to make sure that incentives to shift care from community-based practices to hospital outpatient departments are prevented. The Democrats letter went on to commended value-based payment methods in general, but added that “stakeholder involvement, including direct patient input, is essential to the successful development and application of value-based purchasing tools.”
 
CMS Finalizes Medicaid Managed Care Rules
 
Last Monday, the Centers for Medicare and Medicaid Services (CMS) tightened rules for Medicaid managed care, where states contract with private health insurers to provide benefits to low-income beneficiaries. The final rule proposes a number of new limitations on insurers, such as requiring states to set rules ensuring Medicaid plans are providing access to adequate numbers of physicians. Under the rule, standards will have to include “time and distance” maximums to ensure doctors are not too far away from members. The rule also requires plans to regularly update directories of doctors and hospitals; pushes plans to better detect and prevent fraud by providers, including mandatory reporting of suspected abuse to the states; tightens rules for Medicaid plans and states to collect and submit patient data; and makes it easier for states to offer managed-care plans incentives to clinical outcomes, reduce costs, and share patient information among hospitals and doctors. The rule also limits insurer profits by requiring rate settings that assume 85 percent of revenue be spent on medical care. Unlike a similar rule for other plans, such as insurance sold through Affordable Care Act (ACA) marketplaces, the rule will not require Medicaid insurers to rebate the difference if they do not reach 85 percent, as future rates will instead be adjusted. The provision has sparked considerable resistance from insurers, who argue that the new “medical loss ratio” policy is a “one-size-fits-all strategy” that will hinder states’ decision-making. Nevertheless, CMS leaders Andy Slavitt and Vikki Wachino have maintained that the rule is intended to make insurers “focus on delivering care, not profits.”
 
Wyden Introduces Bill to Cap Medicare Out-of-Pocket Drug Costs
 
Sen. Ron Wyden (D-OR), the top Democrat on the Senate Finance Committee, introduced new legislation last week aimed at protecting seniors from high drug costs, an issue that has attracted growing scrutiny. Sen. Wyden’s measure would cap drug cost-sharing for Medicare enrollees so that seniors would not have to pay out of pocket costs above a roughly $7,500 cap. In 2013, 2.9 million people in Medicare’s prescription drug program had to pay costs above that cap, Wyden’s office said.  “It defies common sense that protection from high out-of-pocket costs exists for almost all other types of health coverage, but not for traditional Medicare,” Wyden said in a statement last week.  While the Affordable Care Act already caps out of pocket costs under health insurance plans sold on the law’s marketplaces, similar protections don’t always apply in Medicare. The bill, known as the Reducing Existing Costs Associated with Pharmaceuticals for Seniors Act of 2016 (RxCAP), would likely increase government spending as it shifts more costs onto Medicare instead of the consumer, though it is unclear exactly how much it would cost.