This Week’s Diagnosis: Government reopens…for at least three weeks. Congress is full steam ahead, kicking off the 116th with health care hearings on drug pricing and pre-existing conditions. The US Department of Health and Human Services (HHS) focuses on 2019 priorities.
Shutdown Ends. The partial government shutdown officially ended on day 35 – the longest shut down in history. The continuing resolution that sailed through the House and Senate and was signed by the President funds the remaining agencies at 2018 levels for three weeks. But the potential for another shut down on February 15, 2019 is high. In a sign of some progress, members from both parties and both chambers are officially negotiating over immigration reform and border security.
House Committee leaders Pallone and DeGette Target Insulin Manufacturers. Chairman of the House Energy and Commerce Committee Frank Pallone (D-NJ) and Chairwoman of the Oversight and Investigation Subcommittee Diana DeGette (D-CO) sent letters to the three manufacturers selling insulin in the US (Novo Nordisk, Eli Lily and Sanofi) requesting detailed information on how the companies price insulin products. DeGette also serves as the Co-Chair of the Diabetes Caucus and has a history of concern about and scrutiny of the rising cost of insulin.
Health Hearings. There were four health policy-related hearings on Tuesday, with both parties using the hearings to lay out their health care agendas. Here are some takeaways from each.
Add House Education and Labor to the Mix. The House Education and Labor Committee announced it will hold a hearing on February 6 on protecting workers with pre-existing conditions. The Education and Labor Committee has jurisdiction through the Employee Retirement Income Security Act, which governs employer-sponsored health plans. There are several new Democratic members of the Committee with interest in health reform: Pramila Jayapal (D-WA), leader of the Medicare for All Caucus; Lauren Underwood (D-IL), registered nurse; Kim Schrier (D-WA), pediatrician; Lucy McBath (D-GA), gun control advocate; and Donna Shalala (D-FL), former HHS secretary.
Cassidy and Warner Release Draft Bill on Drug Prices. Senators Bill Cassidy (R-LA) and Mark Warner (D-VA) have a different approach to bring drug prices down – tie pricing to clinical effectiveness. The draft bill, Patient Affordability Value and Efficiency Act, would provide for certain exemptions to existing requirements around the ability of insurers, hospitals and clinics to pay for prescription drugs or medical devices based upon their proven effectiveness. The authors believe this measure will help drive down prescription drug and medical device costs while incentivizing manufacturers to create products that effectively treat patients. Comments on the draft are due February 19, 2019.
CMS Releases MA Rate Notice and Call Letter. The Centers for Medicare and Medicaid Services (CMS) released the 2020 Medicare Advantage and Part D Advance Notice Part II and Draft Call Letter. The agency projects an average 1.59 percent increase in plan payments. The agency also includes a number of proposals aimed at addressing the opioid crisis and offering additional flexibility for plans to provide supplemental benefits to chronically ill beneficiaries. Comments are due by March 1; the final Rate Announcement and Call Letter will be published by April 1.
CMS in the App Game. CMS launched a new app called “What’s Covered” that intends to help beneficiaries understand what Medicare covers. It is limited to traditional Medicare (i.e., not Medicare Advantage). It provides information on general cost, coverage and eligibility details for items and services covered by Medicare Part A and B.
Verma Addresses 2019 CMS Quality Conference. CMS Administrator Seema Verma spoke about the next generation of quality measures and payment innovation efforts to better align incentives for providers. Verma stated that today, only 14 percent of Medicare providers are in value-based agreements. She indicated that the agency has spent the last year developing new models and a strategy to increase participation. The new models are intended to offer additional options and incentives for providers that take on financial risk. She specifically mentioned dual eligible and rural populations as focus areas for new demonstrations.
HHS and OIG Releases Proposal Targeting PBMs. HHS and its Office of the Inspector General released a proposed rule building on the Administration’s efforts to lower prescription drug prices. The proposal would update the discount safe harbor in the Anti-Kickback Statute to explicitly exclude reductions in price offered by drug manufacturers to pharmacy benefits managers (PBMs), Part D and Medicaid-managed care plans from the safe harbor’s definition of a “discount.” It would also create a new safe harbor designed specifically for price reductions on pharmaceutical products, but only those that are reflected in the price charged to the patient at the pharmacy counter. PBMs have become a potential target for lawmakers and the Administration as an area for reform under the auspices of addressing the rising cost of prescription drugs. This is the first proposal from the Administration that directly challenges the role of PBMs.
For more information, contact Mara McDermott or Rachel Stauffer.
To subscribe to the McDermottPlus Check-Up, please contact Jennifer Randles.