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Second Opinion

Learn about policy issues important to medical schools and teaching hospitals, with Executive Vice President Atul Grover, M.D., Ph.D.

Senate HELP Committee Holds HHS Secretary Hearing

January 19, 2017—The Senate Health, Education, Labor, and Pensions (HELP) Committee Jan. 18 held a hearing for President-elect Trump’s Secretary of Health and Human Services (HHS) nominee, Rep. Tom Price, MD (R-Ga.). While the Senate HELP Committee held a hearing on the nomination, the Senate Finance Committee has jurisdiction over the nomination’s confirmation. The Senate Finance Committee has scheduled its confirmation hearing for Tuesday, Jan. 24, at 10 a.m.

In his opening testimony, Dr. Price noted that “We all want a health care system that’s affordable, that’s accessible to all, of the highest quality, with the greatest number of choices, driven by world-leading innovations, and responsive to the needs of the individual patient.”

The Affordable Care Act (ACA) and coverage through Medicare and Medicaid were prominent themes of questions during the discussion. In his opening statement, HELP Committee Chair Lamar Alexander (R-Tenn.) addressed Republicans’ plans to repeal and replace the ACA “simultaneously,” as President-elect Trump has suggested, or “concurrently” as House Speaker Paul Ryan (R-Wis.) has indicated. The chairman noted that he believes “‘simultaneously’ and ‘concurrently’ means Obamacare should be finally repealed only when there are concrete, practical reforms in place that give Americans access to truly affordable health care.”

Additionally, Chairman Alexander referred to the ACA as an “old bridge,” noting that a town with a bridge “very near collapse,” would “build a better bridge, or more accurately, many bridges, to replace the old bridge. Finally, when the new bridges are finished you would close the old bridge.”

Similarly, he argued, lawmakers “will first send in a rescue crew to repair temporarily a collapsing health care market so no one else is hurt,” followed by incremental efforts to “build better systems that give Americans access to truly affordable health care” by “moving health care decisions out of Washington, D.C., and back to states and patients.”

Meanwhile, Senator Susan Collins (R-Maine) inquired if Dr. Price supports “the increases for NIH” that Congress approved in the FY 2016 omnibus [see Washington Highlights, Dec. 18, 2015] and in the proposed FY 2017 spending bills [see Washington Highlights, July 15]. Dr. Price responded that “NIH is a treasure for our country in the kind of things we should be doing to find cures for those diseases. One of the core avenues to be able to make that happen is through NIH, and I supported the increase.”

Dr. Price also fielded several questions from Democrats regarding his financial investments in stocks of health-related companies, with HELP Ranking Member Patty Murray (D-Wash.) ending her inquiry stating that lawmakers “need answers” on the nature of the investments.


Tannaz Rasouli
Sr. Director, Public Policy & Strategic Outreach
Telephone: 202-828-0525



AAMC President and CEO Sends Medicaid Letter to Republican Finance Committee Chair

January 19, 2017—Senate Finance Committee Republicans Jan. 19 hosted a Medicaid roundtable with several Republican governors. In preparation for that meeting, AAMC President and CEO Darrel G. Kirch, MD, Jan. 18 sent a letter to Chairman Orrin Hatch (R-Utah) regarding the importance of the Medicaid program to beneficiaries and safety net providers.

In the letter, Dr. Kirch expressed AAMC’s appreciation for Senate Finance Committee Republicans’ interest “in soliciting input from Republican governors on how to best incorporate additional flexibility and innovation into the Medicaid program.” Dr. Kirch also reiterated AAMC’s “commitment to informing policies that address opportunities and challenges in our health care system, and to ensuring that all individuals receive the comprehensive insurance coverage and high-quality care they need.”

At the same time, the letter also urges Congress to adhere to several principles as it discusses potential changes to the Medicaid program, including:

  • Maintaining the ACA’s Medicaid expansion;

  • Maintaining its commitment to the states and Medicaid beneficiaries, without limits, caps, or block grants;

  • Ensuring that Medicaid beneficiaries have access to high-quality care by maintaining and enforcing network adequacy requirements and ensuring sufficient payments to providers;

  • Delaying the scheduled Medicaid DSH payment reductions; and

  • Permanently reauthorizing the Children’s Health Insurance Program.

Dr. Kirch also noted AAMC-members’ commitment to implement delivery reforms that reduce the growth in underlying health care costs.


Len Marquez
Director, Government Relations
Telephone: 202-862-6281


HHS Releases Long Awaited Revisions to the Common Rule

January 19, 2017—The Department of Health and Human Services (HHS) and 15 other federal departments and agencies Jan. 18 released the final rule revising the 1991 regulations that govern federally-supported research involving human subjects, also known as the Common Rule. The Common Rule subjects all federally funded research to a standard set of rules, including requirements for informed consent and formal processes for the ethical review of research.

Among the changes to the regulations, the most significant include the mandate that a single Institutional Review Board (IRB) review and approve all multi-site research and the extension of the Common Rule to all clinical trials conducted at a U.S. institution that receives federal funding, regardless of funding source.

The rule also requires new information be added to informed consent documents and the publication of these documents on a public website.  The final rule notably exempts certain types of research from the requirements of the rule.  It does not include an earlier proposal to require prospective informed consent for future research with unidentified biospecimens, a proposal that was met with significant criticism from various stakeholders.

The release of the final rule represents the culmination of a lengthy revision process beginning in July 2011 when HHS issued an Advanced Notice of Proposed Rulemaking (ANPRM), which represented the first revisions to the regulations in over 20 years. The AAMC submitted a response to the ANPRM supporting the overhaul of the existing regulations [see Washington Highlights, Oct. 28, 2011]. Based on feedback from the ANPRM, in Sep 2015, HHS issued a Notice of Proposed Rulemaking (NPRM) and received over 2,000 comments from a broad spectrum of the research community, many responses expressing opposition to the proposed changes related to the single IRB mandate and the treatment of biospecimens.

In the AAMC’s letter to HHS, the association expressed strong concerns about the most significant changes to the regulations and recommended “revisiting or withdrawal of these proposals and the overall simplification of the proposed rule” given the increase in administrative burden, cost, complexity of the proposed requirements, and lack of flexibility of the rule’s mandates [see Washington Highlights, Jan. 8].



Heather Pierce, JD, MPH
Sr. Director, Science Policy & Regulatory Counsel
Telephone: 202-478-9926


Senate HELP Committee Holds Education Confirmation Hearing

January 19, 2017—The Senate HELP Committee Jan. 17 held a confirmation hearing for President-elect Trump’s Education Secretary nominee, Betsy DeVos. Much of the panel’s questions focused on K-12 education, but the dialogue also touched on higher education issues of importance to medical schools.

In her opening statement, Mrs. DeVos discussed students’ “difficulty accessing affordable higher education.”  She stated, “Escalating tuition is pricing aspiring students out of college. Others are burdened with debts that will take years or decades to pay off.”

Sen. Mike Enzi (R-Wyo.) raised concerns about the “Government Accountability Office report that was issued at [his] request last November that showed the cost projections for the income-driven college loan repayment program are tens of billions of dollars higher than the original estimates.”

Meanwhile, Sen. Elizabeth Warren (D-Mass.) questioned Mrs. DeVos’s “qualifications for leading the nation in higher education,” noting her lack of personal and professional experience with student loans.  She also raised the Department of Education’s gainful employment rule as important to ensuring career schools are not cheating students.

Sen. Johnny Isakson (R-Ga.) highlighted the burden of federal higher education regulations and the findings of a 2015 HELP committee taskforce that identified regulations that can be invalidated by the Secretary of Education. Sen. Isakson also noted the complexity of the Free Application for Federal Student Aid (FAFSA), which Mrs. DeVos agreed to help streamline.

Senate HELP Committee Chairman Lamar Alexander (R-Tenn.) noted that the committee Jan. 24 will vote on Mrs. DeVos’s confirmation, and that he believes she will be confirmed.


Matthew Shick, JD
Director, Gov't Relations & Regulatory Counsel
Telephone: 202-828-6116


MedPAC Discusses Medicare Part B Payment Policy and How to Support Primary Care

January 19, 2017—The Medicare Payment Advisory Commission (MedPAC) Jan. 12-13 meeting included discussions about changes to how Medicare reimburses drugs under Part B and the role that the current Medicare fee schedule has in supporting primary care.

MedPAC staff introduced a package of potential reforms for Medicare Part B drug payment policy to address increases in Part B drug spending. The proposed reforms would seek to improve the current average sales price (ASP) system and reduce the ASP add-on to encourage enrollment in a Drug Value Program (DVP).

Among the proposed reforms, the DVP would give the Secretary authority to use private vendors to negotiate prices under Medicare Part B and offers providers shared savings opportunities. Providers could choose to voluntary enroll in the DVP or the revamped ASP system.

Some Commissioners commented that reducing the ASP add-on payment would likely not change prescribing behavior, and noted that the viability of the DVP would heavily depend on participation of vendors. 

According to MedPAC staff, primary care services are underpriced in the Medicare fee schedule, and noted that there are wide income disparities between primary care and non-primary care physicians. 

MedPAC staff offered three options to better support primary care. 

  • Option 1: Establish per beneficiary payment for primary care based on amount of Primary Care Incentive Payment (PCIP) program payments which are approximately $700 million. 

  • Option 2: Increase per beneficiary payments to $1.2 billion: $700 million from option 1 plus $500 million from the Merit-based Incentive Payment System (MIPS) exceptional performance bonus.

  • Option 3: Allow primary care physicians in all 2-sided Accountable Care Organizations to receive a portion of payments for primary care visits as upfront payment, in addition to per beneficiary payment from Option 2.

While most Commissioners favored Option 2, there was general consensus that future work should focus on a more holistic approach of comparing high-value primary care services vs. non-primary care services. Commissioner Alice Coombs, MD, highlighted AAMC’s work on the physician workforce and how the shortage of primary care physicians should be addressed in the short term.


Mary Mullaney
Director, Hospital Payment Policies
Telephone: 202-909-2084

Ayeisha Cox, J.D.
Hospital Policy & Regulatory Specialist
Telephone: 202-282-0482


CMS Implements AAMC’s Recommendation to Address Appeals Backlog in Final Rule

January 19, 2017—The Centers for Medicare and Medicaid Services (CMS) Jan. 13 released the Changes to the Medicare Claims and Entitlement, Medicare Advantage Organization Determination, and Medicare Prescription Drug Coverage Determination Appeals Procedures final rule, which is designed to address the overwhelming backlog of pending Medicare appeals.

In its comment letter, the AAMC recommended that the Office of Medicare Hearings and Appeals (OMHA) compile a yearly report to assess the impact of decisions issued by attorney adjudicators on the backlog, including the percentage of decisions decided in favor of the government. CMS agreed with AAMC’s recommendation, stating that the disposition data on OMHA’s website will be expanded to include data for attorney adjudicators to assess the impact of decisions on the overall appeals backlog.

Additionally, CMS finalized the effect of decisions issued by the Departmental Appeals Board (DAB) Chair, affirming that it would provide more consistency in decisions at all levels of the appeals process, as well as provide clarity to appellants and adjudicators.

CMS also finalized the proposal that grants attorney adjudicators broader authority to (1) decide appeals for decisions that can be issued without a hearing, (2) review dismissals issued by a Qualified Independent Contractor (QIC), (3) issue remands to CMS contractors, and (4) dismiss requests for hearings when an appellant withdraws a request.


Ayeisha Cox, J.D.
Hospital Policy & Regulatory Specialist
Telephone: 202-282-0482


CMS Releases Final Rule on Medicaid Managed Care Pass-Through Payments

January 19, 2017—The Centers for Medicare and Medicaid Services (CMS) Jan. 17 released the Use of New or Increased Pass-Through Payments in Medicaid Managed Care final rule. The final rule prevents increases in pass-through payments and the addition of new pass-through payments beyond those in place when the pass-through payment transition periods were established in the May 2016 Medicaid managed care final rule.

Pass-through payments may continue under the Medicaid Managed Care Organization (MCO) contract, but those payments must be phased out within 10 years for hospitals and 5 years for physicians. Additionally, a new maximum of permitted pass-through payments is established for each year of the transition period. CMS also prohibits retroactive adjustments to managed care contracts and rate certifications to add new pass-through payments or increase existing pass-through payments. 

CMS finalized provisions limiting the availability of pass-through payments during the transition periods to states. This was for states that had such payments in managed care contracts and rate certifications that were submitted for review and approval on or before July 5, 2016. If the managed care contract and rate certifications for the rating period had not been submitted to CMS on or before July 5, 2016, then the payments would have to be in the contract or rate certification that was most recently submitted to CMS for review and approval.

CMS made it clear that it will not approve a retroactive adjustment or amendment to add new pass-through payments or increase those that currently are in place.



Ayeisha Cox, J.D.
Hospital Policy & Regulatory Specialist
Telephone: 202-282-0482


On the Hill

January 19, 2017—Patrick Conway, MD, MSc, who currently serves as deputy administrator for innovation and quality, will serve as acting administrator of the Centers for Medicare & Medicaid Services (CMS) and HHS Deputy Assistant Secretary Norris Cochran will be become acting secretary after the current CMS administrator and HHS secretary and other political appointees leave office on Friday, Jan. 20.

NIH Principal Deputy Director Lawrence Tabak, DDS, PhD, will serve as acting director of the NIH after Francis Collins, MD, PhD, steps down as director on Jan. 20.

On The Agenda

Jan. 23: Health IT Policy and Standards Joint Committee Meeting

2 p.m.; Webinar

The Office of the National Coordinator (ONC) for Health Information Technology (HIT) Standards Committee and Policy Committee will meet via webinar to discuss standards implementation specifications and certification criteria for the electronic exchange of health information.


Jan. 24: Senate Finance Hearing on HHS Nomination

10 a.m.; 215 Dirksen Senate Office Building

The Senate Finance Committee will hold a hearing to consider the nomination of Rep. Tom Price (R-Ga.) to be Secretary of Health and Human Services.


Jan. 25: National Advisory Council on The National Health Service Corps Webinar
1 p.m.; Webinar
The National Advisory Council on The National Health Service Corps (NACNHSC) will host a webinarto discuss a variety of topics related to issues that communities with a shortage of primary care professionals face in meeting their health care needs. A webinar agendais available online. 

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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

For More Information

Jason Kleinman
Sr. Program & Policy Specialist, Govt Relations
Telephone: 202-903-0806

Courtney Summers
Senior Legislative Analyst
Telephone: 202-862-6042