Health Policy Report

The Week in Review

Both chambers of Congress were out of Washington last week for a district work period.

The Week Ahead

Congress is set to resume legislative business today following a weeklong district work period. In the Senate, Majority Leader Mitch McConnell (R-KY) has queued up a vote on the progressive-sponsored "Green New Deal" resolution (S.J.Res 8) in hopes of forcing Senate Democrats into a tough political vote. While Democrats initially decried the move as a partisan stunt, they have coalesced around a message that climate change is an issue that needs attention and that they look forward to debating these issues on the Senate floor. Following consideration of the Green New Deal resolution, Senators are expected to take up a supplemental disaster relief aid bill (H.R. 268) that would help states and territories that have been impacted by various natural disasters in recent months. 

Meanwhile, House lawmakers have queued up an attempt to override President Trump's veto of a resolution of disapproval that would prevent him from circumventing Congressional appropriation authority to allocate funding for the construction of a border wall. Despite the resolution's passage in both chambers, the effort to overturn the President's veto is unlikely to have the support of a two-thirds majority in the lower chamber. Also on the House floor next week, lawmakers are set to consider a bill (H.R. 7) that would amend the Fair Labor Standards Act to provide more effective remedies to victims of discrimination in the payment of wages on the basis of sex.

Gottlieb Announces Details of FDA Reorganization Plan

In a letter to agency staff last Thursday, Food and Drug Administration (FDA) Commissioner Scott Gottlieb, M.D. provided details for the reorganization of the Office of the Commissioner (OC), as well as the Centers for Devices and Radiological Health (CDRH), Drug Evaluation and Research (CDER), Food Safety and Applied Nutrition, Tobacco Products, and Veterinary Medicine. The reorganization, which was previously announced last summer, will officially begin on March 31.

The changes are intended to modernize the FDA’s structure and help the agency to better promote its public health goals. Commissioner Gottlieb explained that the reorganization will realign several entities across the agency to promote strategic priorities, including changes to the Office of Policy, Planning, and Legislative Affairs and the Office of External Affairs. He said the plan would allow the agency to better recruit and retain talented staff.

The reorganization includes several key Center changes to be implemented alongside restructuring of the OC, although each Center will be responsible for sharing details and timing separately. The proposed Center changes include:

• The Center for Devices and Radiological Health will establish the Office of Product Evaluation and Quality, as well as restructure some existing offices.
• The Center for Drug Evaluation and Research will establish the Office of Therapeutic Biologics and Biosimilars, as well as restructure some existing offices.
• The Center for Food Safety and Applied Nutrition will reorganize the Offices of Cosmetics and Colors, and Food Safety.
• The Center for Tobacco Products will reorganize the Office of Health Communication and Education.
• The Center for Veterinary Medicine will reorganize the Office of New Animal Drug Evaluation.

Commissioner Gottlieb noted in his letter that implementation would be rolled out in phases across the Agency at a “thoughtful, manageable, and realistic pace” in order to reduce interference with day-to-day operations. 

Citizen Petition Calls for FDA Moratorium on New Opioid Approvals

Consumer advocate Public Citizen and the Chair of a Food and Drug Administration advisory panel — Dr. Raeford Brown — filed a Citizen Petition last week urging the FDA to place a moratorium on the approval of new opioids until the regulation and review of new opioids is revamped. The Petition pointed to a report from the National Academies of Sciences, Engineering, and Medicine from 2017 which explained that the FDA failed to adequately “incorporate public health considerations into opioid-related regulatory decisions.”

The petitioners argue that the FDA has displayed “dangerously deficient oversight,” of opioid approval, and that none of the more than two dozen opioids reviewed by the agency between 2009 ad 2015 provided benefits that outweighed the risks. The drugs Opana ER and Dsuvia were singled out as examples. The petitioners asked that the FDA develop an effective regulatory framework for opioids incorporating public health consideration before approving any additional new or reformulated opioids.

MedPAC Recommends Two Percent Bump in FFS Payment Rate Update

The Medicare Payment Advisory Commission (MedPAC) has released its March 2019 Report to Congress, detailing annual recommendations on updating fee-for-service (FFS) payments for payment year 2020. The Commission advised Congress to give hospitals a two percent bump in FFS payment rates — 0.8 percent under the current-law update for 2020 — and direct the difference between the MedPAC update and current-law’s projection to high-performing acute care hospitals.

The report also included review and analysis on the status of Medicare Advantage (MA) and Medicare’s prescription drug benefit program, as well as recommendations to replace the four current hospital quality payment programs with a single streamlined program — dubbed the Hospital Value Incentive Program. The report recommends that the two penalty-only programs — the Hospital Readmissions Reduction Program (HRRP) and Hospital-Acquired Condition Reduction Program (HACRP) — be revised so that penalties from those programs would be redirected to hospitals with the best quality scores.

The Commission also suggested that recent changes to Part D’s benefit design, in combination with growth in the use of high-cost medicines, “may be eroding plans’ incentives to manage benefit costs. Additionally, a congressionally-mandated report on opioid and non-opioid pain treatment prescribing practices under Medicare’s hospital inpatient and outpatient payment systems is included.

MACPAC Recommends Restructuring DSH Reductions Based on Low-Income Population

In its March 2019 Report to Congress, the Medicaid and CHIP Payment and Access Commission (MACPAC) offered several recommendations relating to disproportionate share hospital (DSH) payments and upper payment limit (UPL) payments. The report also includes an annual update of MACPAC’s analysis of indicators of hospitals’ need for DSH funds with new data from DSH audits.

With DSH allotment reductions set to go into effect on October 1, 2019 as provided for in the Affordable Care Act (ACA), MACPAC is offering recommendations to smooth the implementation of the reductions and to target the reductions based on the number of non-elderly low-income individuals in a state. This approach, billed as policy-neutral by many of the commissioners, was the outcome of a sometimes-contentious debate that contemplated the targeting of states with high uninsured populations as an alternative. As the DSH reductions loom, MACPAC found that a year after the implementation the ACA, hospitals had a higher Medicaid shortfall — the difference between Medicaid’s reimbursement levels and the cost of providing care — due to the increase in Medicaid enrollment.

 

Addressing some challenges with UPL payment policy, MACPAC recommended reporting and process reforms to address persistent concerns about the use of inaccurate data. As a starting point, MACPAC recommended that UPL demonstration data be made public for analysis.