Legislative Activity

House to Consider 21st Century Cures Act

Majority Leader Kevin McCarthy (R-CA) has announced that the House of Representatives will consider H.R. 6, the 21st Century Cures Act, this week. The House Committee on Rules will meet to consider the rules for the debate on Wednesday, July 8. Amendments to the legislation are to be filed by Tuesday, July 7.

This legislation that was released in advance of the Committee on Rules consideration includes changes to the regulatory authority of the Food and Drug Administration, as well as provisions focused on health information technology, research, telemedicine, drug manufacturing and development, and young scientists.

While the legislation would increase funding for the National Institutes of Health by approximately $8.75 billion over the next five years, this figure falls short of the $10 billion that the House Committee on Energy and Commerce approved in May. Three Democratic supporters of the legislation – House Committee on Energy and Commerce Ranking Member Frank Pallone (D-NJ), Rep. Diana DeGette (D-CO), and Rep. Gene Green (D-TX) – have expressed their disappointment with this decrease in funding and vowed to find additional means to fill the “funding hole.”

This new version of the legislation includes a Sense of Congress which states that the HIPAA regulation should not be used to prevent proper data sharing. Additionally, new electronic health record interoperability language would require the Department of Health and Human Services to provide rules for interoperability standards and implementation specifications. It would also abolish the Standards Committee and restrict the role of the Office of National Coordinator Policy Committee.

Policymakers have wrestled with how to pay for the bill’s large price tag and some of the offsets have been controversial. A Congressional Budget Office estimate from July 2 states that the legislation would cut federal spending by about $470 million through 2025. The legislation includes the following offsets: drawing down the Strategic Petroleum Reserve; limiting Medicaid payments for durable medical equipment to Medicare rates; changing payments for Part B drugs administered through durable medical equipment and for X-ray imaging; excluding authorized generics from calculation of average manufacturer price; and establishing programs aimed at preventing prescription drug abuse under Medicare Parts C and D. Unlike the previous version of the bill, the current version would not delay certain Medicare prescription drug plan prepayments. America’s Health Insurance Plans (AHIP) had come out against the Medicare Part D offset, and the Advanced Medical Technology Association (AdvaMed) has expressed concerns on the durable medical equipment offset.

The bill currently has 230 bipartisan cosponsors.

This Week’s Hearings:

  • Tuesday, July 7: The Senate Committee on Health, Education, Labor, and Pensions (HELP) Subcommittee on Primary Health and Retirement Security will hold a hearing titled “Small Business Health Care Challenges and Opportunities.”
  • Wednesday, July 8: The House Committee on Energy and Commerce Subcommittee on Health will hold a hearing titled “Medicaid at 50: Strengthening and Sustaining the Program.”
  • Wednesday, July 8: The House Committee on Rules will meet to determine the rules for debate of H.R. 6, the 21st Century Cures Act.
  • Wednesday, July 8: The Senate Committee on Homeland Security and Governmental Affairs will hold a hearing titled “Stopping an Avian Influenza Threat to Animal and Public Health.”

Regulatory Activity

CMS Proposes Modification to Two Midnight Rule

On Wednesday, July 1, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule titled “Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Short Inpatient Hospital Stays; Transition for Certain Medicare-Dependent Small Rural Hospitals under the Hospital Inpatient Prospective Payment System.” This proposal includes revisions to the Medicare hospital outpatient prospective payment system (PPS) and the ambulatory surgical center payment system for the 2016 calendar year.

Of note, this rule also contains a proposal to modify the two midnight rule, which instructs auditors not to review stays crossing two midnights for inpatient appropriateness unless a review is clearly warranted. CMS reiterated its continued belief that the two midnight benchmark “gives appropriate consideration to the medical judgment of physicians and also furthers the goal of clearly identifying when an inpatient admission is appropriate under Medicare Part A.” However, in light of stakeholder concerns, the agency proposed to modify its existing “rare and unusual” exceptions policy to allow for Medicare Part A payment on a case-by-case basis for inpatient admissions that do not currently satisfy the two midnight benchmark.

The deadline for comments is August 31, 2015.

CMS Publishes End-Stage Renal Disease PPS Proposed Rule

On Wednesday, July 1, CMS published in the Federal Register a proposed rule titled “Medicare Program; End-Stage Renal Disease Prospective Payment System, and Quality Incentive Program.” This rule would establish the End-Stage Renal Disease (ESRD) PPS during the 2016 calendar year and make changes to the ESRD Quality Incentive Program. Among other provisions, this proposed rule would establish the ESRD PPS base rate at $230.20 and would update the outlier policy. The agency projects that the 2016 calendar year updates would increase total payments to ESRD facilities by 0.3 percent as compared to the 2015 calendar year.

The deadline for comments is August 25, 2015.

Judicial Activity

Supreme Court Upholds ACA Subsidies

On Thursday, June 25, the U.S. Supreme Court held for the Administration in King v. Burwell. This case challenged whether the Affordable Care Act (ACA) provides premium tax subsidies to individuals who purchase insurance through federally-facilitated exchanges, as opposed to solely to individuals who purchase insurance through state-based exchanges. In a 6-3 decision authored by Chief Justice John Roberts, the Court upheld the ACA and found that the tax subsidies are available to individuals in states that have a federal exchange.

The Squire Patton Boggs health care policy and industry groups have prepared an analysis of the decision, including implications for stakeholders and what to expect from the Administration and Congress. This analysis is available online here.