8.27.18 – 8.31.18 Health Wrap Up

Please find below a summary of the latest major health policy developments in Washington this week. Please let us know if you have any questions.

Scheduling note: The Senate was only in session on Monday and Tuesday; the House remained on recess through Labor Day.


The Senate to date has passed FY19 appropriations packages consisting of the Defense and Labor-HHS-Education bills; the Agriculture, Transportation-HUD, Financial Services, and Interior-Environment bills; and the Energy-Water, Legislative Branch and Military Construction-VA bills. The House has passed six FY19 bills to date. Three bills, Homeland Security, State-Foreign Operations, and Commerce-Justice-Science, have yet to reach the floor in either chamber. Conference approval of the Energy-Water, Legislative Branch and Military Construction-VA spending package could happen as early as next week, with the possibility of other packages to follow.

In regards to the Labor HHS and Defense bills, the House and Senate Subcommittee staff are currently working to reconcile differences between their bills with the goal of completing conference negotiations and sending the package to the President before the end of the fiscal year. Congress only has about four weeks to work out differences in competing versions of the measures and the House is only scheduled to be in session 11 days and the Senate 16 days before the September 30 deadline.


On Tuesday, Senate Majority Leader McConnell (R-KY) announced that Senate Health, Education, Labor and Pensions (HELP) Committee Chair Alexander (R-TN) cleared all of the holds on the Republican side of the aisle and he was hopeful any remaining holds on the Democratic side could be resolved and potentially allow a legislative package addressing the opioid misuse and overdose epidemic to be brought up as soon as next week under a time agreement.

Based on discussions with staff, our current understanding is that the package will be largely similar to the bill that was hotlined earlier this month and will be based on the work of the four Committees of jurisdiction (HELP, Finance, Judiciary and Commerce).  Staff indicated that provisions included in the House-passed legislation such as expanding buprenorphine prescribing authorities, modifying the 42 CFR Part 2 patient privacy protections, and partially repealing the Institution of Mental Disease (IMD) exclusion are not in the package.  Reportedly, Senators lifted their holds on assurances from Sen. Alexander that their inclusion in a final package could be negotiated during conference.

Our understanding is that at least one Democratic hold may remain; how long resolving that hold takes may dictate when the bill reaches the floor.

As we have previously reported, once the Senate passes the bill a conference of some type – either formal or informal - will likely begin. The expectation is that final passage will wait until after the November elections given the limited amount of time Congress will be in Washington this fall.


On Thursday, House Energy and Commerce Committee Chair Walden (R-OR), Health Subcommittee Chair Burgess (R-TX) and Oversight Subcommittee Chair Harper (R-MS) sent a letter to the Medicare Payment Advisory Commission (MedPAC) asking them to undertake additional research examining hospital consolidation and the financial impact it has on Medicare patients and the program. In the letter, the Chairmen ask for a response from MedPAC to the following list of questions within 30 days:

  1. Describe recent trends in hospital consolidation and to what degree current federal policies may accelerate consolidation.
  2. What are the implications of hospital consolidation on hospitals' costs and on patients' costs?
  3. Do markets with higher levels of hospital consolidation have higher commercial prices than markets with lower levels of hospital consolidation? Do markets with higher levels of hospital consolidation result in similarly-situated Medicare beneficiaries facing higher spending for drugs or other treatment and services?
  4. How has integration between physicians and hospitals affected Medicare payments for physician services?
  5. Under the 340B program, hospitals can acquire outpatient drugs at a substantial discount, leading to high profit margins on drugs for 340B hospitals, which has contributed to hospitals acquiring physician practices. Can the availability of 340B drug discounts create incentives for hospitals to choose more expensive products in some cases? If so, what would be the impact on Medicare patients' cost-sharing for such drugs in such cases?



On Monday, a bipartisan and bicameral letter from House Energy and Commerce Committee Chair Walden (R-OR), House Energy and Commerce Committee Ranking Member Pallone (D-NJ), Senate HELP Committee Chair Alexander (R-TN) and HELP Committee Ranking Member Murray (D-WA) was sent to the Health Resources and Services Administration (HRSA) asking HRSA to use their rulemaking authority to implement 340B regulations.

In the letter, the leaders note that HRSA has asked Congress to consider undertaking legislative action to give the agency more rulemaking authority over the 340B program, but the letter goes on to state, “While we appreciate that HRSA has requested these additional authorities, we remain concerned that the agency is not using its existing authorities. We believe HRSA action to issue or implement final regulations in an open and transparent process, in collaboration with all relevant stakeholders, could help clarify and update program requirements in pursuit of strengthening access to necessary care and proper administration of the program.”


On Thursday, House Energy and Commerce Committee Chair Walden (R-OR), Health Subcommittee Chair Burgess (R-TX) and Oversight Subcommittee Chair Harper (R-MS) sent letters to Pharmacy Benefit Managers (PBMs) seeking information about their practices.  Some of the areas covered in the letter include:

  • List prices for prescription drugs
  • Negotiations based on drug price lists
  • Medicare Part D
  • Medicaid managed care
  • Mid-year contract changes
  • Changes to list price and the impact on contract payers and enrollees
  • Impact of list price on negotiations
  • Impact of law on negotiations
  • Specialty drugs


As the House and Senate return to session next week, the following hearings of note have been noticed for next week:

September 4

The Senate Judiciary Committee will begin their hearing on the nomination of Brett Kavanaugh to the Supreme Court.  A list of witnesses is available here.

September 5

House Energy and Commerce Committee Health Subcommittee legislative hearing, “Opportunities to Improve Health Care.”  Per the Committee release, draft legislation to be discussed at the hearing includes:

  • H.R. __, a discussion draft to prohibit the use of so-called “gag clauses” in Medicare and private health insurance plans. Today, some health insurance contracts prevent pharmacists from informing patients when the cash price for their prescription costs less than their insurance cost-sharing arrangement unless the individual directly asks. As a result, customers may be paying more for their prescriptions. This language aims to ban group health plans offered by employers and individual health insurance plans – as well as Medicare Advantage and Medicare Part D Plans – from restricting a pharmacy’s ability to inform a customer about the lower cost, out-of-pocket price for their prescription.
  • H.R. __, a discussion draft to codify the Healthcare Fraud Prevention Partnership (HFPP). Currently operated by the Centers for Medicare and Medicaid Services (CMS), the HFPP is a voluntary public-private partnership between the federal government, state agencies, law enforcement, private health insurance plans, and health care anti-fraud associations. The HFPP operates to detect and prevent health care fraud through public-private information sharing, streamlining analytical tools and data, and providing a forum for government and industry experts to exchange successful anti-fraud practices. The bill will establish explicit authority for HFPP and its activities, better equipping them to define the rules and responsibilities of its members and expand the scope of allowable activities to address more in the spectrum of fraud and abuse in our health care system.
  • H.R. 3325, the Advancing Care for Exceptional (ACE) Kids Act, authored by Energy and Commerce Committee Vice Chairman Joe Barton (R-TX) and Rep. Kathy Castor (D-FL), will improve the delivery of care for children with complex medical conditions who receive care under Medicaid, by providing enhanced federal matching for a limited period of time for care coordination services. The bill builds upon the “health home” model that has been successful for helping state Medicaid programs improve care for populations under current law.
  • H.R. 5306, the Ensuring Medicaid Provides Opportunities for Widespread Equity, Resources (EMPOWER) and Care Act, authored by #SubHealth Vice Chairman Brett Guthrie (R-KY) and Rep. Debbie Dingell (D-MI), will extend the Money Follows the Person Demonstration (MFP) program in Medicaid for an additional five years. The MFP program provides resources to state Medicaid programs to help transition individuals with chronic conditions and disabilities from institutions back into local communities.
  • H.R. 3891, to amend title XIX of the Social Security Act to clarify the authority of State Medicaid fraud and abuse control units to investigate and prosecute cases of Medicaid patient abuse and neglect in any setting, and for other purposes, authored by Rep. Tim Walberg (R-MI) and Rep. Peter Welch (D-VT), will clarify the authority of State Medicaid Fraud and Abuse Control Units (MFCUs). This clarification will give these important units the authority to investigate and prosecute abuse and neglect of Medicaid beneficiaries in non-institutional settings as well as broaden the permissible use of federal MFCU funds to screen complaints or reports alleging potential abuse or neglect of Medicaid beneficiaries.


September 6

  • House Energy and Commerce Committee Oversight and Investigations Subcommittee hearing, “Examining Federal Efforts to Ensure Quality of Care and Resident Safety in Nursing Homes.”  Witnesses include:
    • Mr. John Dicken, Director, Health Care, U.S. Government Accountability Office
    • Ms. Ruth Ann Dorrill, Regional Inspector General, Office of Inspector General, U.S. Department of Health and Human Services
    • Dr. Kate Goodrich, Director, Center for Clinical Standards and Quality, and Chief Medical Officer, Centers for Medicare & Medicaid Services



 CMS Accountable Care Organization Report

On Tuesday, the Centers for Medicare and Medicaid Services (CMS) released its “Next Generation ACO Model” report outlining its finding on the health outcomes and costs related to Next Generation Accountable Care Organizations (NGACOs).  Traditional ACOs are groups of doctors, hospitals, and other health care providers who coordinate and provide high-quality care at lower costs to CMS.  Created in 2016, NGACOs are ACOs which assume greater risk sharing for potential losses.  This week’s reports looked at the financial and health figures of the first year of NGACO data and found several important conclusions:

  • NGACOs made significant savings to Medicare Part A and Part B.
  • NGACOs saved roughly $134 per patient over the year (roughly 1.7% savings per aligned beneficiary).
  • Beneficiaries substantially increased their utilization of preventive care services.
  • Beneficiaries marginally decreased the number of acute care hospital admissions.

Consistent with many of the principles CMS Administrator Seema Verma has promoted during her tenure, the NGACO report may serve as justification to push CMS toward greater utilization of such health care agreements.  Although this week’s report does not provide recommendations to CMS on ways to improve NGACOs, it is reasonable to expect CMS to continue to build out the concepts which seem to underpin the successes of NGACOs thus far.


Katie Weyforth Vanlandingham

Van Scoyoc Associates

800 Maine Ave SW

Suite 800

Washington, DC  20024