Legislative Developments

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October Congressional hearings have focused on the following health policy topics:

  • A House Ways and Means Committee hearing addressed “Investing in the U.S. Health System by Lowering Drug Prices, Reducing Out-of-Pocket Costs, and Improving Medicare Benefits.”
  • A House Energy and Commerce Committee hearing, “Sabotage: The Trump Administration’s Attack on Health Care,” featured testimony from CMS

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On September 26, 2019 the Senate approved H.R. 4378, the Continuing Appropriations Act, 2020, and Health Extenders Act of 2019, which would fund the federal government through November 21, 2019.  The House has already approved the legislation, and President Trump is expected to sign the bill.  The legislation includes a number of health program…

On September 25, 2019, the House Energy and Commerce Committee is holding a hearing entitled “Making Prescription Drugs More Affordable: Legislation to Negotiate a Better Deal for Americans.”  A background memo and text of the bills are available here.  Likewise, a second House panel – the Education and Labor Health, Employment, Labor, and Pensions…

While the latest federal budget agreement signed into law earlier this month provides a reprieve from statutory budget caps for certain defense and domestic programs, it extends Medicare sequestration cuts for an additional two years.  Specifically, section 402 of the Bipartisan Budget Act of 2019 (P.L. 116-37) extends the 2% across-the-board reduction to Medicare provider…

Prior to the 4th of July break, Senate and House Committees approved more than a dozen health policy bills, covering topics including:  surprise medical bills, health pricing transparency, drug prices and competition, various Medicare policies, and public health program reauthorization, among others.  The following are highlights of recent action.  Note that none of the bills has yet been considered by the full House or Senate, and all are subject to change during the legislative process.

Senate HELP Committee

The Senate Health, Education, Labor and Pensions (HELP) Committee approved S 1895, the Lower Health Care Costs Act of 2019.  This high-profile, bipartisan legislation would hold patients harmless from “surprise” medical bills for out-of-network services provided at an in-network facility, with payment to out-of-network providers set at the median contracted rate for in-network providers in the geographic area (a controversial “benchmark rate” proposal).  The bill contains separate protections regarding costs for emergency room and air ambulance services.  Additionally, S 1895 seeks to improve health care transparency by, among other things, banning what are described as “anticompetitive” terms in contracts between insurers and providers; providing patients with additional information on out-of-pocket costs; and regulating certain pharmacy benefit manager (PBM) pricing practices.  The legislation also includes numerous provisions intended to promote generic drug and biosimilar biological product innovation; improve health information exchange and strengthen health entity cybersecurity practices; and authorize various public health programs.  The Committee approved the bill on June 26, 2019 on a vote of 20-3.  Committee Chairman Lamar Alexander expressed hope for full Senate consideration of the bill in July.

During the same markup, the HELP Committee also approved S 1173, the Emergency Medical Services for Children Program Reauthorization Act, and S 1199, the Poison Center Network Enhancement Act of 2019.

Senate Judiciary Committee

The Senate Judiciary Committee approved the following four bills that are intended to help reduce prescription drug prices:

  • S 1227, the Prescription Pricing for the People Act of 2019, which would require the Federal Trade Commission (FTC) to study the role of PBMs in the pharmaceutical supply chain and provide Congress with related policy recommendations.
  • S 440, the Preserving Access to Cost Effective Drugs Act, which would bar patent owners from asserting sovereign immunity, including the sovereign immunity accorded to an Indian tribe, in certain drug patent disputes.
  • S 1224, the “Stop STALLING Act,” to authorize the FTC to take action against entities that file “sham” citizen petitions to attempt to interfere with approval of a competing generic drug or biosimilar.
  • S 1416, Affordable Prescriptions for Patients Act of 2019, which would authorize the FTC to challenge certain brand manufacturer practices (e.g., “product hopping” and “patent thickets”) that could discourage generic drug and biological use.

House Ways and Means Committee

The House Ways and Means Committee recently passed the following health policy bills:…
Continue Reading Congressional Committees Advance Multiple Bills Addressing Surprise Medical Billing, Prescription Drug Policy, and Other Health Policy Issues

The House of Representatives has overwhelmingly approved H.R. 3253, the Empowering Beneficiaries, Ensuring Access, and Strengthening Accountability Act, which would finance extension of various Medicaid-related health programs by increasing manufacturer Medicaid drug rebate obligations.  In terms of health programs, the legislation also would, among other things:

  • Extend the “Money Follows The Person Rebalancing Demonstration”

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On June 12, 2019, three Congressional committees have scheduled hearings on health care policy topics:

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The House of Representatives has approved H.R. 987, the “Strengthening Health Care and Lowering Prescription Drug Costs Act,” which packages seven prescription drug and insurance-related bills recently approved by the House Energy and Commerce Committee.  The legislation is intended to:  increase generic drug competition; fund Affordable Care Act “Navigator” outreach and enrollment programs and…

In a rare display of unity, President Donald Trump and bipartisan Congressional leaders have highlighted their shared commitment to tackling “surprise” medical billing – when an insured patient is subject to unexpectedly high out-of-pocket costs for out-of-network care that is beyond their control.  Such surprise billing can occur when a patient receives emergency care from…

Representatives Jackie Speier (D-California) and Dina Titus (D-Nevada) have introduced HR 2143, the Promoting Integrity in Medicare Act of 2019 (PIMA), which – if enacted – would narrow the “Stark” law’s exceptions and have a direct impact on the services provided by physicians who self-refer for the performance of certain designated health services. The 2019…

Recent Congressional hearings and markups have concentrated on prescription drug pricing, insurance access, and other health topics.  For instance, last week the House Ways and Means Committee unanimously approved H.R. 2113, the Prescription Drug Sunshine, Transparency, Accountability and Reporting Act of 2019 (STAR Act).   The legislation would, among other things:

  • Require drug manufacturers to report their “justification” for drug price increases that exceed certain thresholds.
  • Mandate that manufacturers of drug, biologicals, devices, and medical supplies publicly report on the Open Payments database the value and quantity of free samples given to providers.
  • Extend to manufacturers without a Medicaid rebate agreement the requirement to report average sales price for drugs covered under Medicare Part B, and authorize civil money penalties for failure to report such information or for reporting false information.
  • Direct the Secretary of Health and Human Services to publicly disclose certain rebates, discounts, and other price concessions achieved by pharmaceutical benefits managers (PBMs) and to report on drugs furnished in the inpatient hospital setting.

Earlier this month the House Energy and Commerce Committee approved 12 bills aimed at reducing prescription drug and other health care costs, including legislation intended to:  bolster generic drug competition; support Affordable Care Act insurance enrollment programs and state-based insurance marketplaces; reverse Trump Administration policies on short-term, limited duration health insurance and State Relief and Empowerment Waivers; and establish an “Improve Health Insurance Affordability Fund” to help states lower premiums in the individual health insurance market.

In addition to these markups, Congressional panels have held hearings various health policy issues, including the following:…
Continue Reading Congressional Committees Continue Focus on Prescription Drugs, Insurance Coverage Policy

The House and Senate have both approved H.R. 1839, the Medicaid Services Investment and Accountability Act of 2019, clearing it for President Trump’s signature.  Notably, the legislation would: subject drug manufacturers to a new civil monetary penalty (CMP) for knowingly misclassifying or misreporting covered outpatient drugs under a Medicaid drug rebate agreement (such as by knowingly submitting incorrect drug product information).  The penalty would equal up to two times the difference between the rebate amount the manufacturer paid and the amount the manufacturer would have paid if the drug had been correctly classified.  The CMP would be imposed in addition to any other penalties or recoveries.  Furthermore, the legislation would strengthen requirements for recovery of unpaid rebate amounts, without regard to whether the manufacturer knowingly made the misclassification or should have known that the misclassification would be made, and it dedicates funding to improve oversight and enforcement of drug rebate obligation compliance.  These provisions would take effect on the date of enactment, and would apply to covered outpatient drugs supplied by manufacturers under rebate agreements on or after the enactment date.

The bill also would:…
Continue Reading Medicaid Legislation with Medicaid Rebate Misclassification Penalty Heads to President Trump

The Senate Finance Committee recently called for federal agencies to begin investigating physician owned distributors’ (PODs) alleged noncompliance with the U.S. Physician Payment Sunshine Act (Sunshine Act, or Open Payments). The letter is addressed to the head of the Office of Inspector General (OIG) and the Administrator of the Centers for Medicare & Medicaid Services (CMS). If acted upon, the OIG/CMS investigations could change the landscape of the Sunshine Act in an important way: any resulting public enforcement would most likely be a first.

How the Sunshine Act Applies to PODs

The Sunshine Act requires applicable manufacturers and group purchasing organizations (GPOs) to annually disclose payments or transfers of value to covered recipients (physicians and teaching hospitals), as well as to disclose ownership or investment interests held by U.S. physicians or their immediate family members (with an exception for publicly traded companies).

PODs, which distribute revenue to their physician owners in a variety of ways, generally have obligations to file such reports under the Sunshine Act in one of two ways:

  1. The POD falls within the definition of a “GPO.” CMS defines a GPO as “an entity that (1) Operates in the United States; and (2) Purchases, arranges for or negotiates the purchase of a covered drug or device, biological, or medical supply for a group of individuals or entities, but not solely for use by the entity itself.”1 CMS has been clear that it intends this definition to include PODs.2
  2. The POD qualifies as an “applicable manufacturer.” To the extent that a POD takes title to a product, the Sunshine Act implementing regulations make clear that PODs are “subject to the same requirements as all other applicable manufacturers.”3

Sunshine Enforcement Landscape

Under the Sunshine Act, the knowing failure to disclose reportable payments or ownership interests is punishable by a civil monetary penalty of up to $10,000 for each item not timely reported. However, despite nearly a decade since enactment and five cycles of data reporting (this year will be the sixth), there have been no public enforcement actions. (We must acknowledge, however, the possibility that investigations may be ongoing and merely not yet publicly disclosed, or were resolved without penalty and therefore not publicly announced.)

Interestingly, the March 19, 2019, letter, written by Senators Chuck Grassley and Ron Wyden (Chairman and Ranking Member, respectively, of the U.S. Senate Finance Committee), appears to imply that the authors have knowledge of specific violations by PODs: “It has come to our attention that some physician owned distributorships (PODs) may be failing to disclose physician ownership or investment interest as required by the Physician Payment Sunshine Act (Sunshine Act).”…
Continue Reading Senate Committee Calls for Sunshine Act/Open Payments Enforcement

Federal health policy is an early focus for Congressional committees.  In addition to several hearings held in January, Congressional hearings in February have concentrated on the Affordable Care Act (ACA) and primary care, including the following:

  • A House Energy and Commerce Committee hearing on the Texas v. United States court case challenging the constitutionality

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As the new 116th Congress gets underway, four House and Senate committees are holding hearings to examine health policy issues, including two hearings focusing on prescription drug prices.  Specifically, the following hearings are all scheduled for January 29, 2019:

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President Trump has just signed into law HR 6, the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act.  The bipartisan legislation includes almost 200 provisions intended to strengthen opioid prevention and treatment efforts and bolster law enforcement tools.

Among many other things, the new law: 

  • Seeks to

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The House of Representatives approved two “gag clause” bills on September 25, 2018 that would prevent insurers from restricting pharmacies from informing consumers about lower cost, out-of-pocket prices for their prescriptions.  The bills were approved by the Senate earlier this month, and are now cleared for the President’s signature.

Specifically, S 2553, the Know…

Congressional panels continue to focus on federal health care policy topics, including cost, quality, and program integrity issues. Recent hearings have included the following:

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