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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 Continues its Efforts to Repeal the Affordable Care Act

July 21, 2017—In response to continued opposition to the Senate health care reform bill, the Better Care Reconciliation Act (BCRA), Senate Majority Leader Mitch McConnell (R-Ky.) July 18 announced his intent to vote on an updated version of a 2015 repeal of the Affordable Care Act (ACA), the Obamacare Repeal Reconciliation Act (ORRA).

However, enough Senators have announced they would oppose both the BCRA and ORRA to prevent passage of either. Despite this opposition, Leader McConnell continues to state that a vote on a motion to proceed to debate a health care reform bill will occur in the coming days or weeks. It is unclear whether the most recent version of BCRA, which has been undergoing continued revisions, or the ORRA will be the legislative vehicle brought to the floor for debate.

Meanwhile, the Congressional Budget Office (CBO) this week issued cost estimates of both BCRA and the ORRA. The most recent version of BCRA will lead to 22 million more uninsured people by 2026. The ORRA will lead to 32 million more uninsured by 2026.

A vote on either the BCRA or the ORRA could come as early as next week.

Contact:

Catie Spivey, JD
Sr. Legislative Analyst, Gov't Relations
Telephone: 202-862-6042
Email: cspivey@aamc.org

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House Energy and Commerce Subcommittee Holds Hearing on 340B Program

July 21, 2017—The House Energy and Commerce Oversight and Investigations Subcommittee July 18 held a hearing on the 340B Drug Pricing Program. During the hearing, members from both parties expressed support for the program, while some also encouraged the Health Resources and Services Administration (HRSA), which administers the program, to increase its oversight and transparency.

Congress created the 340B program in 1992 to allow certain safety-net hospitals and other covered entities to purchase outpatient drugs at a discount from drug manufacturers and use the savings to provide services and programs to vulnerable populations. The rapid growth in the number of covered entities in recent years and ongoing criticism of the program by pharmaceutical manufacturers whose revenues are reduced by the 340B mandated discounts have sparked Congressional concern about the program.

Witnesses included: Captain Krista Pedley, PharmD, director, Office of Pharmacy Affairs, HRSA; Debra Draper, PhD, director, health care, Government Accountability Office (GAO); and Erin Bliss, assistant inspector general, Office of Evaluation and Inspections, Office of Inspector General (OIG).

While the focus of the hearing was on program oversight, several Democratic members took advantage of the opportunity to express publicly their concern about the Medicare payment reduction to 340B eligible hospitals in the July 13 Centers for Medicare and Medicaid Services’ (CMS) Hospital Outpatient Prospective Payment System (OPPS) proposed rule [see Washington Highlights, July 14].

In her opening remarks, Subcommittee Ranking Member Diana DeGette (D-Colo.) stated, “I'm troubled by the rule that the Centers for Medicare and Medicaid proposed last week, which would dramatically reduce reimbursements to Medicare Part B drugs for 340B hospitals. The Trump administration claimed that this proposed rule was an important step to lower the cost of drugs for the American people. Unfortunately, that statement seems more fantasy than reality. The proposed rule will do nothing to achieve the goal of making prescription drugs more affordable to the general population.”

Representative Kathy Castor (D-Fla.) also expressed her support for the 340B program to help alleviate rising drug costs for safety net hospitals and clinics. She added, “I just wanted to say that at a time when high and escalating drug prices are a top concern for all Americans, the 340B Drug Discount Program is a real winner. It’s a very modest government initiative that has huge benefits.”

Subcommittee Chairman Tim Murphy (R-Penn.) highlighted the benefits of the program, as well as some concerns, in his opening statement, “For many of these covered entities, those savings are vital to the entity’s survival, particularly those that serve a large percentage of indigent patients and operate at a loss each year.” However, he added “as with so many federal programs, there are instances of errors and misuse.”

Captain Pedley provided an overview of HRSA’s program integrity efforts in her testimony, noting, “HRSA places the highest priority on the integrity of the 340B Program and has strengthened oversight of this program.” She also outlined HRSA’s auditing process and highlighted that the agency has completed 805 covered entity audits since auditing began in 2012 as well as seven audits of manufacturers.

In her testimony, Dr. Draper summarized the results of a 2011 GAO report on the oversight of the 340B program. She pointed out that while HRSA has addressed two of GAO’s recommendations – initiating audits of covered entities and clarifying guidance of manufacturers – the agency has been unsuccessful in clarifying guidance on the definition of an eligible patient and hospital eligibility criteria. Dr. Draper noted that HRSA did attempt to address these issues in its 2015 proposed guidance, but it was ultimately withdrawn [see Washington Highlights, Feb. 3].

Bliss reviewed OIG’s previous findings on 340B program integrity. She noted that HRSA “has taken some steps to address these concerns” but highlighted OIG’s recommendations for HRSA to increase transparency to allow payment accuracy and clarify rules to ensure that the program operates as intended, including clarifying the definition of eligible patient.

Captain Pedley responded to these issues in her testimony throughout the hearing, stating, “Specific legislative authority to conduct rulemaking for all provisions in the 340B statute would be more effective for facilitating HRSA’s oversight over, and management of, the 340B Program. In addition, specific regulatory authority would allow HRSA to provide greater clarity and specificity to Program requirements.”

The hearing followed a June 2 letter to HRSA from House Energy and Commerce Republican leaders that expressed concern about 340B program oversight and requested audits documents from the last two fiscal years.

Contact:

Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org

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House Appropriators Approve Spending Bill With NIH Increase, Cuts to Health Professions

July 21, 2017—After a marathon markup stretching into the evening, the House Appropriations Committee July 19 approved, 28-22, its draft FY 2018 Labor-HHS-Education spending bill and accompanying report, providing a nearly $1 billion increase for the National Institutes of Health (NIH) and blocking the administration’s proposal to reduce NIH support for facilities and administrative (F&A) expenses. Though Democrats offered dozens of amendments to the text, the committee left most of the bill unchanged, adopting only three amendments to the bill, including a manager’s amendment of technical and “non-controversial” revisions.

The subcommittee had approved the spending bill one week earlier [see Washington Highlights, July 14], providing $34.7 billion in base funding for NIH, a $943.4 million (2.8 percent) increase over the comparable FY 2017 funding level. The bill also fully utilizes $496 million from the NIH Innovation Account established by the 21st Century Cures Act (P.L. 114-255), bringing the FY 2018 total for NIH to $35.2 billion, $1.1 billion more than FY 2017.

Other accounts in the spending bill, however, face cuts, which Democrats sought to restore. The panel rejected an amendment from Rep. Lucille Roybal-Allard (D-Calif.) to restore a $24 million (7.4 percent) cut to the Agency for Healthcare Research and Quality (AHRQ).

The committee also considered an amendment from Rep. Roybal-Allard to restore funding for the Health Resources and Services Administration (HRSA)’s Title VII health professions and Title VIII nursing workforce programs to their FY 2017 enacted funding levels. The committee’s bill would provide $448 million for Title VII and Title VIII, a $91 million (16.8 percent) cut.

For Title VII, the measure includes $237 million, a 72.2 million (23.3 percent) cut below FY 2017, achieved through elimination of the Health Careers Opportunity Program (HCOP) and the Public Health and Preventive Medicine Program, and substantial reductions for Centers of Excellence, Behavioral Health Workforce Education, and Geriatrics programs. The bill includes $211.2 million for Title VIII nursing programs, an $18.3 million (8 percent) cut overall, maintaining the Nurse Corps program at its FY 17 funding level of $83 million, and consolidating remaining Title VIII programs in a new $128 million line item called “Nursing Workforce Development.”

In her remarks supporting restored funding for the programs, Rep. Roybal-Allard emphasized the importance of these programs to “protect and promote the health professions workforce for the 21st Century.” She continued, “At a time when the demand for health care continues to rise, cuts and consolidations to Title VII and VIII are counter to the goal of increased access.”

Subcommittee Ranking Member Rosa DeLauro (D-Conn.) spoke in support of Rep. Roybal-Allard’s amendment, echoing the importance of these workforce program and characterizing them as “a pathway to the middle class.”

Subcommittee Chair Tom Cole (R-Okla.) commented on the amendment as well, recognizing the importance of the programs, but ultimately opposing it due to subcommittee’s limited budget allocation. However, Chairman Cole mentioned that if there were to be a budget agreement that increases the subcommittee’s allocation, he may support provisions in the amendment. Ultimately, the amendment failed with a 22-30 party line vote.

During the markup, Rep. Mark Pocan (D-Wis.) offered an amendment to strike the bill’s prohibition on research with fetal tissue derived from “induced abortions.” The committee rejected the amendment by voice vote. The AAMC joined a July 18 letter  with 23 other organizations asking House appropriators to oppose the restriction on fetal tissue research.

The committee’s adoption of the spending bill clears it for consideration by the full House, though floor consideration has not yet been scheduled. Senate action on its version of the spending bill is not expected until the fall.

Contact:

Tannaz Rasouli
Sr. Director, Public Policy & Strategic Outreach
Telephone: 202-828-0525
Email: trasouli@aamc.org

Tyler Hanson, JD
Legislative Analyst II
Telephone: 202-862-6082
Email: thanson@aamc.org

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House Appropriations Committee Approves Funding Cuts for Health Workforce Programs

July 21, 2017—The House Appropriations Committee July 19 approved its FY 2018 Labor-HHS-Education spending bill that would provide the Health Resources and Services Administration (HRSA) with $448 million for Title VII health professions and Title VIII nursing workforce programs, a $91 million (16.8 percent) cut from the FY 2017 enacted level.

The AAMC-coordinated Health Professions and Nursing Education Coalition (HPNEC) had sent a July 12 letter to House and Senate appropriators recommending $580 million for Title VII and VIII programs for FY 2018 [see Washington Highlights, July 14], $132 million more than the Committee approved.

The Committee’s bill includes $237 million for the Title VII health professions programs, a $72.2 million (23.3 percent) cut from the FY 2017 enacted level. The bill would eliminate funding for both the Health Careers Opportunity Program (HCOP) and the Public Health and Preventive Medicine program completely. The Centers of Excellence, Behavioral Health Workforce Education and Training, and Geriatrics programs all received funding cuts under the Committee’s bill. A funding chart detailing the cuts proposed can be found here.

The bill includes $211.2 million for Title VIII nursing programs, an $18.3 million (8 percent) cut overall. The Nurse Corps program maintained its FY 17 funding level of $83 million, while the remaining Title VIII individual lines were eliminated; the Committee included a new line item under Title VIII called “Nursing Workforce Development,” which was given a $128 million allocation.

During the markup, Congresswoman Lucille Roybal-Allard (D-Calif.) introduced an amendment that aimed to restore Title VII and Title VIII programs to their FY 17 enacted funding levels. In her remarks, Rep. Roybal-Allard emphasized the importance of these programs and urged her colleagues to join her in supporting them:

“I ask my colleagues to support this amendment to protect and promote the health professions workforce for the 21st Century. At a time when the demand for healthcare continues to rise, cuts and consolidations to Title VII and VIII are counter to the goal of increased access.”

Ultimately, the amendment failed to pass with a 30-22 party line vote.

Contact:

Tyler Hanson, JD
Legislative Analyst II
Telephone: 202-862-6082
Email: thanson@aamc.org

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House FY 2018 Budget Resolution Inches Forward As Appropriators Forge Ahead

July 21, 2017—The House Budget Committee July 19 approved an FY 2018 budget resolution that includes reconciliation instructions for 11 House committees to achieve $203 billion in mandatory savings, and increases defense spending above the Budget Control Act sequestration caps.

The budget framework, which does not hold the force of law, assumes enactment of the House-passed American Health Care Act (AHCA, H.R. 1628) to repeal and replace the Affordable Care Act, and calls for additional reforms, including a Medicare “premium support” system and additional Medicaid reforms beyond the AHCA.

By Oct. 6, 2017, the budget resolution directs the Energy and Commerce Committee to identify $20 billion in savings between 2018-2027, and tasks the Ways and Means Committee with finding $52 billion in cuts over the same period.

Among several “policy statements” in the resolution, the budget acknowledges the U.S.’s leadership in biomedical innovation and stipulates that “the House should continue to support the critical work of medical innovators throughout the country through continued funding for agencies, including the National Institutes of Health and the Centers for Disease Control and Prevention, to conduct life-saving research and development,” while also facilitating private-sector efforts by “removing regulatory obstacles that impede the adoption of new medical technology and pharmaceuticals.”

The budget blueprint sets the overall FY 2018 discretionary spending total at $1.132 trillion, including $511 billion for nondefense spending and $621.5 billion for defense – a $72.5 billion boost over the defense cap enacted in the Budget Control Act.

House appropriators, however, have already completed committee-consideration of the 12 spending bills, and July 19 voted to formalize the interim allocations each of the subcommittees has used for their spending bills in the absence of a House-approved budget resolution. The discretionary total adopted by the House Appropriations Committee aligns with the $1.132 trillion in the House Budget Committee mark.

While the House had been aiming to bring all 12 bills to the House floor as an omnibus before the August recess, House leaders now plan to combine four of the spending bills into a “national security package” that will include the Defense, Energy and Water, Legislative Branch, and Military Construction/Veterans’ Affairs bills.

House Appropriations Chair Rodney Frelinghuysen (R-N.J.) indicated in a July 18 statement that he is “committed to getting these security bills, as well as every single one of the remaining eight Appropriations bills, through the legislative process and to the President’s desk.”

Meanwhile, Senate appropriators approved their FY 2018 allocations, keeping overall discretionary funding at the FY 2017 level of $1.07 trillion, including the current split between defense ($551 billion) and nondefense ($518.5 billion) funding. Like the House levels, those funding levels exceed the statutory Budget Control Act caps, however.

Within the total, a committee-prepared summary indicates that the committee provides $164 billion for the Labor-HHS-Education spending bill, $3 billion more than the FY 2017 level, and $5 billion more than the Labor-HHS-Education spending bill approved by the House Appropriations Committee (see related story).

Contact:

Tannaz Rasouli
Sr. Director, Public Policy & Strategic Outreach
Telephone: 202-828-0525
Email: trasouli@aamc.org

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On the Agenda

July 25: National Institute on Drug Abuse Briefing on Opioid Use Disorders
12:00 p.m.; 2226 Rayburn House Office Building, Washington, D.C.
The National Institute on Drug Abuse (NIDA), the Congressional Addiction, Treatment and Recovery Caucus, the Prescription Drug Abuse Caucus, and the Bipartisan Heroin Task Force will hold a briefing on “Preventing Opioid Use disorders: Community Based Approaches that Work.”

July 26: HHS and AHRQ Meeting on Research
8:30 a.m.; 5600 fishers Lane, Rockville, Md.
HHS and AHRQ will hold a meeting of the National Advisory Council for Healthcare Research and Quality to receive an update on AHRQ’s current research, programs, and initiatives, an update on AHRQ’s work in learning health care systems and AHRQ’s EvidenceNOW initiative, and on the use of AHRQ data and analytics to answer emerging policy questions.

July 31-August 1: HHS Meeting on Laboratory Test Codes
9:00 a.m.; 7500 Security Boulevard, Central Building, Baltimore, Md.
Health and Human Services Department (HHS); Centers for Medicare & Medicaid Services (CMS) will hold a meeting to discuss clinical diagnostic laboratory test codes for the clinical laboratory fee schedule for calendar year 2018

 

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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.


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For More Information

Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org