HealthCare Roundtable e-News – May 12, 2017

Senate Committee to Hold Hearing on Chronic Care Bill

A Senate panel is scheduled to examine a bill that is intended to enhance chronic care management in Medicare.

A Senate Finance Committee hearing on May 16 is to feature six witnesses testifying about the potential impact of the “Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act” (S. 870). The legislation was crafted by the Senate Finance Committee Chronic Care Working Group, which includes committee Chairman Orrin Hatch, R-Utah, Ranking Member Ron Wyden, D-Ore., Sen. Johnny Isakson, R-Ga., and Sen. Mark Warner, D-Va.

“From the beginning, members of this committee have worked in a bipartisan fashion to address chronic illnesses and improve outcomes for beneficiaries,” Hatch and Wyden said in a joint statement. “The CHRONIC Care Act is the culmination of these efforts and, with a focus on bipartisan solutions, would streamline care coordination and strengthen treatments for our seniors.”

Scheduled witnesses include:

  • Sen. Brian Schatz, D-Hawaii
  • Sen. Roger Wicker, R-Miss.
  • Katherine Hayes, Bipartisan Policy Center
  • Lee Schwamm, Harvard Medical School and Massachusetts General Hospital, appearing on behalf of the American Heart Association/American Stroke Association
  • John Lovelace, UPMC for You
  • Stephen Rosenthal, Montefiore Health System, Yonkers , N.Y.

The bill would, among other things, expand certain telehealth and home care options; enhance options for the chronically ill within Medicare Advantage; increase payment accuracy for patients with chronic conditions; provide more flexibility to the beneficiary selection process in accountable care organizations, and allow more care coordination in ACOs. (Summary)

The group unsuccessfully proposed the same bill during the last session of Congress.

The proposal is based in part on the 327 comments the working group received in response to a December 2015 policy options paper. The Public Sector HealthCare Roundtable submitted comments in January 2016 stating that the options paper “reflects work and analysis that will further the goal of improving care for the millions of vulnerable Medicare beneficiaries managing multiple chronic conditions” and noted that “many of the proposed policies align with the Roundtable’s overarching policy priorities.” The Roundtable plans to submit a letter supporting the current bill for the May 16 hearing.

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Proposal to Speed FDA Approval of Generic Drugs Advances

A proposal aimed at increasing the availability of generic drugs has been added to a major Food and Drug Administration (FDA) reauthorization bill.

The Senate Health, Education, Labor and Pensions (HELP) Committee on May 11 voted 21-2 to approve the “FDA Reauthorization Act” (S. 934), which would enable the FDA to continue to collect user fees from manufacturers of prescription drugs and medical devices. These fees account for about a quarter of the agency’s funding.

The committee added to the bill language from Senate Aging Committee Chairman Susan Collins, R-Maine, and former Ranking Member Claire McCaskill, D-Mo., that would set a limit of no more than eight months for FDA action on applications for generic drugs in cases where there is inadequate generic competition and would implement other measures intended to speed generic drugs to market when competition is lacking.

“We know that increasing generic drug competition is key to lowering prescription drug prices for individuals and reducing drug spending overall,” Collins said. “On average, generic drugs cost 80 to 85 percent less than brand name drugs. Our amendment would make it easier for generic pharmaceutical manufacturers to enter the market and compete to reduce prices.”

While the overall bill is likely considered “must pass” legislation given its impact on FDA funding – HELP Committee Chairman Lamar Alexander, R-Tenn., warned that not reauthorizing the FDA’s ability to collect user fees would lead to 5,000 layoffs at the agency and “would delay the reviews of critical drugs and devices” – the specifics of the legislation, including the generic drug competition amendment, could change on the Senate floor, in the House of Representatives, or in a House-Senate conference.

The legislation grew out of a report on drug pricing that Collins and McCaskill produced for the Aging Committee that outlined the business model that companies have used “to identify and acquire off-patent sole-source drugs over which they could exercise de facto monopoly pricing power, and then impose and protect astronomical price increases.”

The key factors for these firms, according to the report, are that a drug should have only one manufacturer, be regarded as the “gold standard” for treating a given condition, serve a small market, and be available only through a “closed distribution system.” These conditions, according to the report, allow companies to engage in “price gouging, maximizing profits by jacking up prices as high as possible,” since, while the drug would remain in demand even as prices rose, market conditions would not encourage new entrants that could undersell them.

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Senate Republicans Debate Health Care Legislation

The intraparty debate between moderate and conservative Republicans over health care legislation has now moved to the Senate.

The House of Representatives on May 4 passed its replacement for the Patient Protection and Affordable Care Act (ACA), the “American Health Care Act” (H.R. 1628), by a vote of 217-213 after several weeks of negotiations to swing the votes of Republicans who opposed the bill in the form it originally took in March. All 193 Democrats voted against the bill, as did 20 Republicans.

The Senate is now crafting its own legislation, using the House bill as little more than a starting point, with a 13-member group appointed by Senate Majority Leader Mitch McConnell, R-Ky., taking the lead. With Republicans holding 52 seats in the 100-member Senate, and with all of the chamber’s Democrats and its two independents certain “no” votes, opposition from more than two GOP senators will doom the legislation’s chances of passage.

The group appointed by McConnell includes members of the Republican leadership, committee chairmen and others, including two of the most conservative senators, Ted Cruz of Texas and Mike Lee of Utah. After McConnell was criticized for initially not including any women in the group, he asked Sen. Shelly Moore Capito of West Virginia to join the meetings, though it is unclear if she is an official member of the panel.

Senators are awaiting projections from the Congressional Budget Office (CBO) about how the House bill would affect the federal budget and the number of Americans who have insurance. In March, the CBO forecast that the bill would reduce federal budget deficits by $150 billion over a decade and would result in 14 million fewer people having insurance within a year and 24 million fewer having it in 10 years, but the legislation was revised between the release of that report and the bill’s passage in the House. For now, the Senate group has reportedly discussed health care plans in only general terms.

“Nobody’s put pen to paper,” Sen. Majority Whip John Cornyn of Texas said, according to The Hill. “We’re just all  it’s brainstorming at this point.”

One of the issues to be resolved by the group is how to address Medicaid. The House bill would reduce Medicaid spending by $880 billion over a decade by phasing out the ACA’s expansion of the program and moving it toward a block grant funding model. McConnell appointed one of the leading critics of the House Medicaid plan – Sen. Rob Portman of Ohio – to work on the Senate’s approach, along with Sen. Pat Toomey of Pennsylvania.

Portman was one of four senators who sent a letter to McConnell in March to express opposition to the House legislation’s plan for Medicaid, which, they wrote, “does not provide stability and certainty for individuals and families in Medicaid expansion programs or the necessary flexibility for states.” The letter stressed the need to minimize “disruption in access to health care for our country’s most vulnerable and sickest individuals” and to provide for “a gradual transition … to ensure states have the time to successfully implement these new changes.”

A second Republican group is already working on its own health care plan, if not in opposition then still not in tandem with the leadership group. Sens. Susan Collins of Maine and Bill Cassidy of Florida have been leading the group, which appears likely to produce a moderate proposal based on legislation proposed by Cassidy, and cosponsored by Collins, in January. The “Patient Freedom Act” (S. 191) would give states the option of keeping the ACA, enacting a new “market-based” system with federal funding, or implementing their own plan without federal funding. It would retain nearly $1 trillion in taxes that the House bill would eliminate and would not make major changes to Medicaid. (Fact sheet)

“You need income,” Cassidy said. “To think you can cut $800 billion [from Medicaid] and still maintain coverage as the president promised is not compatible.”

Even if Senate Republicans are able to write a bill that wins over nearly its entire caucus, that legislation would have to go back to the House for another vote, and the changes made by the upper chamber could upset the delicate balance that was crafted to get the bill through the House the first time.

In addition to making changes to Medicaid, the House bill would, among other things:

  • Allow states to opt out of ACA requirements establishing “essential health benefits,” provided they had created “high-risk” pools
  • Maintain the prohibition on coverage denials based on preexisting conditions, but allow states to permit insurers to charge higher premiums based on a person’s health status, if that person has a break in coverage
  • Repeal the ACA’s employer mandate and individual mandate, but allow insurers to assess a 30 percent surcharge on premiums if a person has a break in coverage
  • Allow insurers to charge older people as much as five times the amount paid by younger beneficiaries; the ACA limits the ratio to 3:1
  • Replace the ACA’s income-based tax credits for the purchase of insurance in the exchanges with ones primarily based on age
  • Provide $123 billion over 10 years for states to use to help people acquire insurance
  • Cut taxes by $883 billion over 10 years

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New Commissioner Takes Over FDA

The Senate on May 9 confirmed the nominee to take over the Food and Drug Administration (FDA).

Scott Gottlieb was approved to become the FDA commissioner by a 52-47 vote. He was sworn in on May 11.

Gottlieb is a physician who was worked as a clinical assistant professor at the New York University School of Medicine and was a resident fellow at the American Enterprise Institute. He previously served as the FDA’s deputy commissioner for medical and scientific affairs and as a senior advisor to the FDA commissioner.

“Dr. Gottlieb brings considerable experience to the FDA,” Health and Human Services Secretary Tom Price said. “His background will be crucial for keeping the FDA as the gold standard for safe treatments while advancing new, innovative solutions to the many public health challenges our nation faces. I am confident Dr. Gottlieb will make decisions that reduce regulatory burdens while protecting public health.”

Some Democrats expressed doubts about Gottlieb because of his connections to the pharmaceutical industry as a consultant and member of advisory boards. Gottlieb has pledged to resign those positions and recuse himself for a year from decisions involving about 20 companies to which he has ties.

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