Health Policy Report

The Week in Review

Both chambers returned from a brief recess and enjoyed a productive week, as the Senate worked through an impasse over Iran to advance the Energy-Water Development appropriations bill, while the House put together its legislative package designed to combat opioid abuse.

Prior to the one-week recess earlier this month, the Energy-Water Development spending measure (H.R. 2028) appeared to be in danger of falling victim to partisan conflict over a proposed amendment submitted by Sen. Tom Cotton (R-AR) that would bar the U.S. from completing a deal to purchase heavy water – a key component of certain nuclear reactors – from Iran. Democrats fiercely opposed the measure, and the amendment fell short of the 60 vote threshold it needed to be included in the bill on a 57-42 vote. The amendment’s failure allowed for senators to quickly approve the underlying bill 90-8 and send the first appropriations bill of the year to conference with the House.

The lower chamber dedicated its week to crafting an opioid abuse and treatment legislative package. Most of the 17 bills included in the package were considered relatively non-controversial and advanced on a voice vote on the House floor. The bills were packaged together on Friday (along with H.R. 1725, which passed last September) to be considered in conference with the Senate-passed opioid bill (S. 524). Despite the bipartisan consensus on the need to address the issue, there are some differences between the House and Senate versions that will need to be bridged in conference. Additionally, White House officials have expressed certain reservations over the scale of the investment provided by both versions of the legislation. A full breakdown of the bills passed this week by the House and the Administration’s concerns is included in the first story of our health policy roundup below.

The Week Ahead

With the Energy-Water Development spending measure cleared off the Senate floor, lawmakers in the upper chamber will move on to a combined Transportation-HUD and Military Construction-VA minibus appropriations bill (H.R. 2577). In addition to providing funding for those purposes, the bill is likely to act as a vehicle for funding sought by the White House to combat the mosquito-borne Zika virus. Majority Leader Mitch McConnell (R-KY) has teed up cloture votes on three Zika-related amendments for the combined package after weeks of negotiations on the issue between leaders of both parties and the Administration. Those amendments will decide whether or not the funding is provided through an offset or considered emergency spending.

Depending on what the Senate ultimately decides regarding Zika funding, standalone legislation addressing the issue may reach the House floor, even as the House Appropriations Transportation-HUD Subcommittee reportedly works on its own Zika bill to be released later this month. Regardless, the big-ticket item for the lower chamber next week will be the fiscal 2017 edition of the National Defense Authorization Act (NDAA) (H.R. 4909). Consideration of the measure will likely take several days as lawmakers tackle issues ranging from requiring women to register for the Selective Service to eliminating staff on the White House’s National Security Council. The Administration has taken issue with a number of proposals that could be included in the bill, the most contentious of which would provide $18 billion in war funding to Pentagon weapons programs, necessitating a funding boost for the Department of Defense when a new president takes office next year.  

House Advances Opioid Bills; Obama Administration Denounces Lack of Funding

Last week, the House passed a package of 17 bills aimed at curbing opioid abuse, but White House officials criticized the legislation for failing to include necessary funding. While President Obama has not said whether he would refuse to sign the bills, a White House representative dismissed the measures Wednesday, saying they lack “substance.” Furthermore, the Department of Health and Human Services (HHS) Secretary Sylvia Mathews Burwell urged Congress to take up the Administration’s $1.1 billion plan to expand access to medication assisted treatment and fund state-level overdose prevention efforts last week. “Confronting the opioids epidemic – particularly the need for expanded access to treatment – will require significant investment, and while we appreciate the attention Congress is paying to the issue, the legislation being voted on today in the House lacks the funding necessary to help every American with an opioid use disorder who wants treatment get the help they need,” Secretary Burwell said.

Among the bills passed include (H.R. 5052), the Opioid Program Evaluation Act, which is the sole piece of legislation that did not originate from the Energy & Commerce Committee and calls for evaluating the effectiveness of grant programs that are targeted to address opioid abuse issues. Another bill passed includes (H.R. 4641), which would create an inter-agency task force charged with updating best practices for pain management and prescribing pain medication. The House package also includes a provision that would authorize, but not appropriate, $103 million a year in grants from fiscal 2017 through 2021 to help states pay for prevention and treatment of addiction to heroin and prescription opiates. Furthermore, the House voted on a substitute amendment to the Senate-passed opioid bill (S. 524), as well as a motion to send the bill to conference. The rule will pull together the 17 bills the House voted on last week, along with H.R. 1725, which passed last September. 

Stakeholders Urge CMS to Halt Part B Drug Demo

More than 1,300 individuals and organizations submitted comments ahead of last week’s deadline to weigh in on the Centers for Medicare and Medicaid Services (CMS) Part B drug payment demo, with a majority of groups pushing for changes to the proposal and some asking for it to be withdrawn completely.  At question is a proposed two-phase program that would test new ways for Medicare Part B to pay for prescription drugs. During Phase 1 of the nationwide demonstration, CMS has proposed replacing the current formula – the average sales price (ASP) of the drug plus a 6 percent add-on fee – with a rate of ASP plus 2.5 percent, plus a flat fee of $16.80 per drug per day. During Phase 2 of the demonstration, CMS proposes testing a number of value-based purchasing (VBP) strategies, including reference pricing, discounting patient cost-sharing, feedback on prescribing patterns and online decision support tools, and risk-sharing agreements based on outcomes.

The agency’s proposal has come under fire from stakeholders across the spectrum, including patient groups, oncologists and rheumatologists — who often furnish Part B drugs — and the biopharmaceutical industry.  “We strongly urge CMS not to move forward with this flawed policy,” said 80 patient stakeholders in a letter led by the Partnership to Improve Patient Care (PIPC). “Instead, CMS should work to engage patients, people with disabilities and their families, providers and other stakeholders in the identification of models that put patients and people with disabilities at the center, as well as in the development of thoughtful policies that balance progress toward a patient-centered health system and overall health costs."  The groups raised specific concerns about CMS' proposed use of comparative effectiveness research and cost effectiveness in Phase 2 of the proposal, suggesting that the demo would “undermine the very core of the ACA’s goals for advancing a patient-centered health system.”

The American Society of Clinical Oncology, which has been opposed to the plan since it was first announced, reiterated those concerns in its comments on the proposed rule. "The CMS proposal is particularly ill-suited to the delivery and treatment of cancer care, which is complex and highly personalized to each patient, and offers limited opportunity for a physician to choose between two interchangeable, equally efficacious drugs — the very scenario under which the demo seeks to influence physician prescribing behavior," the society wrote. The American College of Rheumatology weighed in too: "Many rheumatologists have already been forced to stop administering biologic therapies to Medicare patients because the current Part B payment structure does not cover the costs of obtaining and providing these complex therapies in the outpatient setting. Additional cuts will force rheumatologists to send patients elsewhere to get the same drugs, often at increased cost and burden to the patient."

CMS could still change the proposal, Chief Medical Officer Patrick Conway said last week. He noted the timeline and the geographic scope of the demo as concerns that have been raised that the agency could look closely at. Those decisions should be based on data, rather than emotion, he said, adding that he was not surprised by the amount of interest the proposal has received. CMS doesn’t think the proposal would limit patients’ access to medications, but Conway said the agency would want to know if it did.

W&M’s Subcommittee Holds Hearing on MACRA Implementation

On Wednesday, House Ways and Means Subcommittee on Health convened a hearing to examine regulatory efforts to implement the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), specifically those detailed in the proposed rule, released April 27 by the Centers for Medicare and Medicaid Services (CMS). Signed into law last year, MACRA replaced the flawed Sustainable Growth Rate (SGR) formula, consolidated several Medicare quality measurement systems, and established new pathways toward value-based physician reimbursement. During the hearing, CMS Acting Administrator Andy Slavitt told lawmakers that the agency's implementation of the new Quality Payment Program will be mindful of reporting burdens on small physician practices and allow for adaptability at the practice level. Furthermore, he reiterated that CMS is actively seeking feedback on MACRA from providers, patients and other stakeholders and re-emphasized that doctors should be thinking about patients' needs rather than regulations when practicing.

Members of the Committee said they generally approve of MACRA’s concepts, but relayed concerns by rural providers and small practices that the new reimbursement model would be particularly challenging for them. Mr. Slavitt responded that the agency will offer technical assistance and allow providers to group together for reporting. He also said many small groups will not meet the threshold for reporting requirements and that small practices can do just as well as large practices on quality measures when they are able to report their quality data, but will need help. Lastly, Mr. Slavitt noted that CMS also anticipates incorporating more measures on how physicians engage their patients by encouraging joint care plans, online portals and more communication.

Lawmakers Explore ACA Changes During E&C Hearing and Private Meeting

On Wednesday, amid House Republican efforts to formulate a replacement for the Affordable Care Act (ACA), the House Energy and Commerce Health Subcommittee convened a hearing to examine healthcare solutions, patient choice, and plan innovation. House Republicans have said they soon will reveal an alternative to the ACA. While that plan is not yet finalized, last week’s hearing offered some hints as to what the Republican replacement plan may contain as Committee members discussed a number of ways to handle preexisting conditions, quality of coverage, affordability, and insurance regulation. Among the range of options discussed included: loosening insurance regulations; changing the nature of federal assistance to low-income people; replacing coverage mandates with incentives for people to enroll in health coverage; changing insurance rating rules, including age bands; and offering tax credits based on income in the previous year.

Democrats expressed an openness to discussing modifications to the ACA. Both parties agreed upon the need for guaranteed issue and continuous coverage protections, especially for those with preexisting conditions. However, tensions are likely to arise as Republican lawmakers emphasized replacement ideas such as market-based alternatives, saying mandates are unnecessary. Republicans also recommended encouraging states to lower costs through “premium reduction programs” and advanced high risk pools, saying such approaches could foster access while addressing costs.

Meanwhile, House Speaker Paul Ryan (R-WI) held a closed-door meeting Thursday to share a draft of their plan to replace the ACA. While details of the plan are not expected to be released publicly until June, it will likely include elements from past healthcare proposals supported by Republican leadership – such as capping the employer tax exclusion for employer-sponsored health plans. Furthermore, Rep. Joe Pitts (R-PA), Chairman of the Subcommittee on Health, reported last week that the plan will also likely include provisions to sell health insurance across state lines, strengthen health savings accounts and award tax credits to low income Americans or those with pre-existing conditions. However, the coming plan will not take the form of legislative text but instead present as a “white paper,” which could make it more difficult to assess the cost of the plan or how it will affect the number of people with health coverage.

House Republicans Win ACA Lawsuit, White House Appeal Imminent

A federal judge ruled Thursday that the Obama administration has been improperly funding an Affordable Care Act (ACA) subsidy program, a boon for House Republicans in their lawsuit against the White House.  Cost-sharing subsidies are available to enrollees with incomes below 250 percent of the federal poverty level who enroll in silver plans. They're designed to reduce out-of-pocket costs when those individuals access medical care.  U.S. District Judge Rosemary Collyer, who was appointed to the bench by President George W. Bush, sided with the challengers in ruling that Congress authorized the cost-sharing program but never actually provided the money for it.  While the White House and the Justice Department refrained from commenting on whether the Administration would appeal the ruling, an appeal is likely imminent. If the ruling stands, it could be a significant financial setback for the millions of low-income Americans who benefit from the cost-sharing subsidies.  Health plans would also feel the impact, as those payments go directly to insurers to make up for lower payments from their poorest customers.