HealthCare Roundtable e-News – August 21, 2018

Groups Ask Senate Leaders to Weigh Kavanaugh’s Potential Impact on Health Care and ACA

A group of 120 consumer and patient organizations are urging Senate leaders to consider the health care positions and decisions of U.S. Supreme Court Nominee Brett Kavanaugh as his nomination moves forward for Judiciary Committee and ultimately full U.S. Senate review. The request highlights a series of health care cases that the Supreme Court is likely to consider related to the constitutionality of the Affordable Care Act, the federal government’s authority to roll back Medicaid coverage, and the ability of stakeholders to hold a state government accountable for violating federal Medicaid requirements.

According to health and legal expert Tim Jost, the result of Texas v. USA, which earlier this year challenged the ACA in federal court in Wichita Falls, could make or break Kavanaugh’s chances of confirmation.

Writing in a recent op-ed in The Texas Tribune, Jost said, “As an appellate court judge, Kavanaugh twice dissented from decisions upholding the constitutionality of the ACA. In one case, he disagreed with the court’s reasoning, not its result. He would also have rejected the other challenge on a jurisdictional technicality, but was open to finding that Congress lacked the constitutional authority to enact the ACA’s individual mandate. As a Supreme Court justice, that suggests Kavanaugh might be willing to invalidate the ACA’s preexisting condition protections.”

Kavanaugh will likely be challenged by individuals, stakeholders and lawmakers who support these protections and will enlist help from Democrats to block his nomination.

Jost also asserts that a decision that invalidates the ACA would be contested to the Fifth Circuit Court of Appeals, which is one of the most conservative courts in the nation and has many active Trump-appointed judges. However, Jost stated that “Based on the law,” Texas’ challenge to the ACA should be rejected by Judge O’Connor.

Due to the narrow split in the Senate, the GOP can only lose two votes on Kavanaugh’s nomination. It’s likely that if the Senate breaks the same way it did on ACA repeal, the confirmation vote could fall short.

Senate Debates HHS Spending Package, Considers Guaranteed Renewability Option in Short-Term Plan Rulemaking

Last week, the Senate began debate on a spending package that incorporates the fiscal 2019 Labor-HHS-Education bill, S. 3158 (115), and Defense bill, S. 3159 (115), according to a GOP leadership notice obtained by POLITICO. The report claims that this is the first time the Senate has considered the Labor-HHS-Education bill on the floor since 2007.

Also on the agenda is HHS’ provision that lets states allow issuers to sell a separate “renewability guarantee” that would protect consumers from premium increases or coverage denials. The renewability guarantees had been offered prior to passage of the ACA, and several states already allow for the sale of a renewability guarantee. However, after passage of the ACA, such guarantees became unnecessary due to the law’s provision banning plans from denying coverage due to preexisting conditions and medical underwriting.

While federal statute prevents HHS from allowing short-term plans to renew their policies, HHS notes that the ability “to purchase such instruments, which are essentially options to buy new policies in the future, is at present permitted under federal law, and this rule does nothing to forbid or permit such transactions.”

Generic Drug Lobby Warns of Increased Drug Prices Due to Tariffs Placed on Chinese Chemicals

The list of products being imported from China and subjected to tariffs is growing, and now includes multiple chemicals used as food additives and to manufacture pharmaceuticals. The Association for Accessible Medicines (AAM) recently warned that the result of this could lead to increased costs of generic drugs and could potentially exacerbate drug shortages.

The United States Trade Representative (USTR) first proposed a 25% duty increase on a list of products imported from China back in April, which included 57 active pharmaceutical ingredients and other drugs. The AAM and Consumer Healthcare Products Association (CHPA), opposed that initial list, arguing a 25 percent tariff would lead to increased manufacturing costs that would then be passed on to the consumer.

One of the challenges that pharmaceutical companies will likely face as a result of the updated lists is the switch most manufacturers will likely make to other ingredient suppliers outside of China, a step that will require the manufacturer to go through the FDA’s approval process. AAM Senior Vice President and General Counsel Jeff Francer told Inside Health Policy that to make the switch from a Chinese supplier to a non-Chinese supplier, a manufacturer will need to submit an amendment to its drug’s abbreviated new drug application, and FDA might have to conduct a new inspection on the supplier facility.

When asked whether there are sufficient supplier options outside of China, Francer said “it varies by drug,” and that it’s unclear “whether for certain specific drugs you could switch in a way that would not lead to either significantly increased generic drug prices or significantly increased risks of shortages.”

Ways & Means to Write to CMS on Medicare Deregulation Rule, According to Report

The House Ways and Means Committee will send a series of letters to CMS in an effort to illustrate methods of relieving administrative burden for hospitals, physicians, and rural providers in Medicare.

Although a recent report notes that there haven’t been any plans for legislation, the committee has continued to comment on outstanding 2019 Medicare pay rules, claiming that, “while Congress and the Committee will submit our thoughts on the proposed and final rules, a consistent and open level of communication on where every stakeholder stands on all of these issues that will reduce burdens and increase value-based patient care is truly important.”

In one of the letters to CMS on post-acute care, the committee will highlight “at least one unique burden faced by each individual PAC provider,” and address the committee’s appreciation for burden reduction efforts in that sector and the agency’s efforts to reduce provider burden in the inpatient pay rule.

The White House Office of Management and Budget recently finished reviewing a proposed deregulatory rule, titled “Regulatory Provisions to Promote Program Efficiency,” to ease Medicare-participation requirements for providers and conditions for coverage. One of the committee’s letters will reference reforms to the hospital star ratings, which CMS did not update in July due to hospital concerns that the ratings were unreliable. CMS says the rule would “reform Medicare regulations that are unnecessary, obsolete, or excessively burdensome on healthcare providers and suppliers.”