Health Policy Report

The Week in Review

House lawmakers started last week hoping to consider an omnibus package ahead of the Mar. 23 government funding deadline, but negotiations have once again proven contentious and floor consideration was delayed to this week. Instead, the House considered ‘right to try’ legislation on the floor, with a suspension vote failing to gain the two-thirds majority necessary to be passed on a 259-140 vote. The bill, which is discussed in greater detail below, is expected to be brought to the floor again this week on a vote pursuant to a rule, meaning it will only need a simple majority to pass.

The Senate finished its consideration of a bipartisan banking regulatory relief bill (S. 2155) on Wednesday night in a successful 67-31 vote that will send the measure to the lower chamber. The Senate bill marks the most sweeping financial reform since Dodd-Frank, aiming to boost community banks by providing some relief from Dodd-Frank regulatory scrutiny, and including a few further reforms on issues such as credit monitoring and student loans that were inserted via substitute amendment. Supporters of the bill will now try to convince House Republicans from making changes that would undermine Democratic support in the upper chamber.

Democrats grabbed an electoral victory in a special election last Tuesday as Pennsylvania’s 18^th congressional district elected Democrat Conor Lamb over Republican Rick Saccone by the ultra-thin margin of 627 votes. Pennsylvania’s ongoing redistricting battle may make the victory more symbolically important than tactically significant, but it is nonetheless a shocking result with significant reverberations going into the midterm elections given the fact that President Trump had won the district by 20 points in 2016.

Finally, the fight between the Trump Administration and some career officials at federal agencies escalated on Friday after Attorney General Jeff Sessions fired outgoing Federal Bureau of Investigation (FBI) Deputy Director Andrew McCabe only hours before he was due to retire from the agency – jeopardizing the FBI official’s federal pension. The official reasoning for the firing was “unauthorized disclosure to news media,” and President Trump later took to Twitter saying that McCabe’s dismissal was a “great day for Democracy.” McCabe, meanwhile, issued a statement that insinuated his firing was largely due to his knowledge of the circumstances surrounding the firing of FBI Director James Comey, as well as his knowledge of Special Counsel Robert Mueller’s probe into possible connections between the Trump campaign and Russian interference in  the 2016 election.

The Week Ahead

Congress faces another funding showdown as the March 23 deadline to avoid a government shutdown approaches. Negotiations are still ongoing, with the House aiming to release text for the final fiscal 2018 omnibus spending agreement tonight. The omnibus is considered one of the last must-pass legislative vehicles of the fiscal year, meaning that lawmakers may try to secure policy priorities – such as Affordable Care Act (ACA) market stabilization and a solution for the deferred action for childhood arrivals (DACA) program – as ride-along provisions.

In other floor action, House Republicans plan to take another shot at passing the Right to Try Act (H.R. 5247) this week after the House failed to advance the bill under suspension of the rules last week. The House Rules Committee said it would clear the way for the bill to move again to the House floor, setting up a vote that will likely result in its passage. The House is not expected to consider the Senate-passed baking regulatory relief bill (S. 2155), as House Financial Services Chairman Jeb Hensarling (R-TX) said that the bill will stay on Speaker Paul Ryan’s (R-WI) desk until bicameral negotiations take place on additional provisions that may be added to the package.

In the upper chamber, the Senate is slated to resume its consideration of a bipartisan bill that seeks to crack down on online sex trafficking. The Fight Online Sex Trafficking Act (H.R. 1865) — which cleared the House in a 388-25 vote last month — would amend the Communications Decency Act of 1996 to stipulate that the law does not protect interactive computer services providers or users from liability for private blocking or screening of offensive material. The Senate will vote on final passage of the sex trafficking measure, as well as the nomination of Kevin McAleenan to be a Commissioner of U.S. Protection in the Department of Homeland Security this afternoon.

Health Insurance Market Stabilization, Abortion Language Threaten Success of Spending Omnibus

Disagreements over the inclusion of several controversial health care policies in the Labor-Health and Human Services appropriations bill are threatening the success of the omnibus spending package this week. Conservative “riders” that would block federal funding to Planned Parenthood, eliminate a federal family planning program, and terminate the Teen Pregnancy Prevention Program are under fire from Democrats, who have pledged to block the bill if they are included. As a result, negotiations have stalled on plans to include insurance market stabilization language from Sens. Lamar Alexander (R-TN) and Susan Collins (R-ME) that would provide $10 billion a year over the next three years for reinsurance, three years on cost-sharing reduction funding, open catastrophic coverage for all, and add new flexibility to the 1332 waiver process.

Democrats reported that both parties had been close to an agreement on overall funding levels for the FY 18 Labor-HHS funding measure when disagreements over women’s health care reemerged. Conservative Republicans also pose a hurdle, as a group of House lawmakers announced last week that they would not support any sort of market stabilization bill, calling it a “bailout to insurers.” Rep. Tom Cole (R-OK), leader of the House-HHS spending panel, acknowledged the delay could force another short-term spending patch to avoid a government shutdown on March 23.

Pharmaceutical companies have also been making use of the stalled time to lobby both for and against the inclusion of potential changes to the Medicare program. Ongoing negotiations leave open the possibility of changes to industry reimbursement for beneficiary drug costs in the so-called “donut hole” of the Medicare Part D Program, as well as the treatment of biosimilar products in Medicare more broadly.

Bipartisan Senators Target 'Gag Clauses' in PBM Contracts

A bipartisan group of senators have introduced a pair of bills that would ban so-called “gag clauses” that prohibit pharmacies from proactively telling customers they could save money on a prescription if they paid out of pocket instead of through insurance. The two bills — introduced by Sens. Susan Collins (R-ME), Ron Wyden (D-OR), Claire McCaskill (D-MO), Debbie Stabenow (D-MI), John Barrasso (R-WY) and Bill Cassidy (R-LA) — would respectively address gag clauses in: (1) plans offered through exchanges and by private employers, and (2) Medicare Advantage and Medicare Part D plans.

While contracts between pharmacists and pharmacy benefit managers (PBMs) are confidential, there have been allegations that they sometimes contain gag clauses preventing pharmacists from telling consumers that paying cash for a prescription might cost less than their health insurance copayment. Indeed, pharmacists can even face significant penalties if they disclose the difference. A recent study published in the Journal of the American Medical Association (JAMA) that reviewed 9.5 million insurance claims found that 23 percent of prescriptions filled through insurance ended up costing more for customers than if they would have paid out of pocket. The overpayments totaled $135 million in 2013, or $10.51 per covered member on average. It’s unclear to what extent these overpayments are directly attributable to gag clauses.  

Given the bipartisan interest in this issue and the deferential response from many within the PBM industry, these measures are reasonably likely to gain traction in Congress. Buttressed by an intense focus from the pharmaceutical industry, Congress has been increasingly skeptical of the pharmacy supply chain and has been looking for ways to curb what they consider to be abusive practices among some PBMs. But without major health care legislation on the agenda for the remainder of the year, it remains to be seen whether GOP leadership will reserve floor time for drug pricing legislation that could open the door to some of the more controversial issues in that domain.

Right-to-Try Bill Fails to Advance Under Suspension of the Rules, Rules Committee to Take Up Bill Monday

The House failed to advance the Right to Try Act (H.R. 5247) under suspension of the rules last Tuesday, garnering a 259-140 majority vote that fell short of the two-thirds majority. The House was considering the bill under an expedited voting process that bypassed most floor debate and committee activity. Thirty-two Democrats voted to support the bill; just two Republicans opposed it.

The vote sent a blow to the right-to-try movement, after the bill sailed through the Senate on unanimous consent last August. The House version was ostensibly “pared back,” and reflected input from the FDA and pharmaceutical industry. The House Rules Committee announced last week that they will hold a hearing today, March 19, on the bill, after the bill sponsor pledged after the failed vote to bring it before the committee. His goal is to eventually bring the bill back to the floor under regular order.

The measure would allow terminally ill patients access to experimental treatments still being considered by the Food and Drug Administration. Although a version of the bill was passed unanimously in August by the Senate, the House updated the language to narrow the definition of patients eligible for the loophole to treatment, strengthened informed consent requirements, gave greater flexibility for the FDA to determine how use under “right to try” will impact a drug’s approval, and equalized liability for doctors and drug makers. In the leadup to the vote, Democratic House leaders raised concerns over patient safety and the potential to create “false hope” for patients who might already have access to such drugs under FDA’s existing expanded access or compassionate use programs.

MedPAC Urges Congress to Eliminate MIPS in March Report

The Medicare Payment Advisory Commission (MedPAC) has released their March 2018 Report to Congress (fact sheet), which includes a recommendation to replace the Merit-based Incentive Payment System (MIPS). MedPAC staff provided a path forward for a replacement to MIPS in the form of a voluntary value program (VVP). The VVP would eliminate clinician reporting and would instead evaluate and reward doctors on a group (as opposed to an individual) level based on comprehensive patient satisfaction and health outcomes data. The VVP also aligns with Congress’ goal of having a value component for clinician services in traditional Medicare that promotes high-quality care. This recommendation was lauded for providing a streamlined approach to the data compilation process, and places a majority of the responsibility of data reporting on Medicare, reducing burden on physicians.      

MedPAC staff specifically criticized MIPS for what they see as a disjointed approach to measuring quality of care, which can lead to unreliable performance scores and can be an inadequate mechanism of promoting high quality care. Under MIPS, MedPAC found that because physicians choose the criteria by which they are to be measured, it can lead to inequalities in results and an incentive for physicians to only elect to be judged on criteria they perform well in. In terms of burden, the report to Congress outlines that MIPS imposes a significant reporting burden for physicians, costing 1.3 billion dollars in the first year. MedPAC also found that because MIPS also applies singular rules to different physician practices depending on location and practice size, it can lead to confusion and inconsistency.

This recommendation comes after two years of deliberation and is rooted in the MedPAC belief that physician quality measurement should not be overly burdensome for providers, should focus on population based measures as opposed to individual clinician process measures, and should provide appropriate awards based on clear and unbiased reported data. Congress is not expected to pare back the MIPS program anytime soon. CMS, however, is exploring regulatory steps it could take to simply implementation and address providers' concerns about the program's complexity.