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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.

President Ends Cost-Sharing Reduction Payments, Signs Executive Order on ACA

October 13, 2017—President Trump Oct. 12 announced his administration would stop paying cost-sharing reduction (CSR) payments effectively immediately. Under the Affordable Care Act (ACA), the CSR payments help lower-income individuals purchase and maintain health insurance in the individual insurance market. The announcement was made in conjunction with the President signing an executive order intended to make it easier for individuals and small businesses to collectively buy health insurance through association health plans. These plans are not subject to all of the protections included in the ACA.

The President’s decision to stop paying CSRs, worth an estimated $7 billion this year, is likely to have a detrimental impact on the health insurance marketplaces. However, several health plans have planned ahead for the CSRs to be pulled. California, as an example, added a 12.5% surcharge on its silver plans in preparation for the CSRs to cease.

The CSRs have been the subject of an ongoing lawsuit concerning whether the payments must be explicitly appropriated by the House of Representatives [see Washington Highlights, August 4]. In a statement, House Speaker Paul Ryan (R-Wis.) said, “Today’s decision by the Trump administration to end the appeal of that ruling preserves a monumental affirmation of Congress’s authority and the separation of powers. Obamacare has proven itself to be a fatally flawed law, and the House will continue to work with [the] Trump administration to provide the American people a better system.” The impact of the President’s decision on the current lawsuit is unclear; however, New York Attorney General Eric Schneiderman has announced a group of Democratic attorneys general will likely sue to stop the President from acting.

The President’s announcement concerning the CSRs was met with condemnation from insurers. In a joint statement, America’s Health Insurance Plans (AHIP) and Blue Cross Blue Shield Association (BCBSA) stated, “Millions of hard-working Americans with modest incomes depend on CSR benefits to get medical care. These benefits help real people every day, and if they are ended, there will be real consequences.”


Catie Spivey, JD
Sr. Legislative Analyst, Gov't Relations
Telephone: 202-862-6042


Energy and Commerce Subcommittee Holds Hearing on 340B Program

October 13, 2017—The House Energy and Commerce Oversight and Investigations Subcommittee held an Oct. 11 hearing on the 340B Drug Pricing Program. Prior to the hearing, the AAMC submitted a letter subcommittee Chair Tim Murphy (R-Pa.) and Ranking Member Diana DeGette (D-Colo.) supporting to the 340B program, as well as an Oct. 5 joint letter with the American Hospital Association.

Energy and Commerce Ranking Member Frank Pallone (D-N.J.) praised the 340B program in his opening statement, “It is beyond question that the resources provided through the 340B program directly augment patient care throughout the country. We have consistently heard this message from all types and sizes of 340B providers, from small AIDS clinics to large urban hospitals. The 340B program plays an integral role in supporting the mission of safety net providers serving low-income, uninsured, and underinsured patients.”

In response to calls for increased transparency, Rep. Pallone added, “Good program integrity strengthens our programs not only for today but for the future. I want to be clear, however, that while I am always happy to have a conversation about strengthening the 340B program, it is plain from the responses we have received that 340B-covered entities are using their savings to serve the community, and Congress should commend and support these efforts.”

Full Committee Chair Greg Walden (R-Ore.) also expressed support for the program, stating, “The 340B program enables covered entities to do some real good in our communities: to extend care to underserved populations, to create programs that serve specific community needs, and to provide life-saving drugs at discounted prices to the populations that need them the most. For some entities, this program is the difference in keeping their doors open or closing shop, which could result in a loss of care to vulnerable population.”

However, he voiced some concern about the oversight of the program. He added, “Our goal today is to develop a better understanding of how much money different entities save through participation in the 340B program, how covered entities track their savings, and how those savings are used to improve patient care in various way.”

The panel was comprised of leaders from five institutions that participate in the 340B program, including Johns Hopkins Hospital Executive Vice President and Chief Operating Officer Charles Reuland, M.H.S., Sc.D. In his testimony, Mr. Reuland highlighted how his medical center is using the savings from the 340B program to support low-income patients in Baltimore. He stated, “At no cost to taxpayers, except for modest appropriations to administer the program, the 340B program has been a success for our community, allowing [Johns Hopkins] to operate a variety of programs and provide services for vulnerable patients that improve their health and well-being that otherwise would not be possible. Importantly, the savings afforded by the 340B drug discount program allow covered entities to focus on preventive medicine, population health and care throughout the lifespan. These efforts help avoid other, more expensive medical interventions, the cost of which would be borne in large part by federal and state government funds if it were not for the 340B program.”

The AAMC’s letter to the subcommittee highlights that the 340B program is critical to major teaching hospitals and the communities they serve. The letter notes, “The AAMC strongly supports the 340B Program, which allows safety-net hospitals and other eligible providers to leverage discounts from pharmaceutical companies to provide critical, life-saving services to vulnerable patients at no cost to taxpayers.”

This hearing was a follow-up to a July 18 hearing that featured witnesses from the Health Resources and Services Administration, Government Accountability Office, and Office of Inspector General [see Washington Highlights, July 21].


Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806


Senate Committee Explores Federal Agencies’ Response to the Opioid Crisis

October 13, 2017—The Senate Health, Education, Labor, and Pensions (HELP) Committee Oct. 5 held a full committee hearing on “The Federal Response to the Opioid Crisis” to examine how agencies are addressing the epidemic. Witnesses included Elinore McCance-Katz, MD, PhD, the assistant secretary for mental health and substance use at the Substance Abuse and Mental Health Services Administration (SAMHSA); Deborah Houry, MD, MPH, director of the National Center for Injury Prevention and Control at the Centers for Disease Control and Prevention (CDC); Francis Collins, MD, PhD, director of the National Institutes of Health (NIH); and Scott Gottlieb, MD, commissioner of the Food and Drug Administration (FDA).

In his opening statement, HELP Committee Chair Lamar Alexander (R-Tenn.) highlighted that “[l]ast year was the highest rate of drug overdose deaths in recorded history in Tennessee—and nearly 3 out of 4 of the drug overdoses in our state are related to opioids.” He also stated, “This is a crisis not just in Tennessee, but across the country, with 91 Americans dying every day from an opioid overdose.”

Ranking Member Patty Murray (D-Wash.) discussed the impact of the opioid epidemic in her home state by detailing a recent visit to a hospital in Longview, Wash. where she was told that “nearly 50 percent of all babies being born there have mothers who struggle with substance use,” calling it “stunning” and “heartbreaking.”

Both leaders reminded witnesses of the 21st Century Cures Act [See Washington Highlights, Dec. 9, 2016] and the Comprehensive Addiction and Recovery Act [See Washington Highlights, July 8, 2016], which include related initiatives to help address prevention, clinical care, and treatment. Chairman Alexander emphasized, “The most ambitious goal of the 21st Century Cures Act was to drive research discoveries predicted over the next decade by National Institutes of Health (NIH) Director Dr. Francis Collins, including the development of non-addictive painkillers.”

During testimony, each witness detailed the various federal measures underway to combat the opioid crisis. In his testimony, Dr. Collins discussed ways that the NIH is supporting innovative research to better understand what makes an individual vulnerable to opioid misuse. Dr. McCance-Katz outlined the five point strategy of the Department of Health and Human Services (HHS), while Dr. Houry laid out the CDC’s Overdose Prevention in States (OPIS) program, which provides resources and scientific support to 45 states and Washington, DC. Dr. Gottlieb said that FDA is concentrating its efforts in three broad areas: lowering overall exposure to opioids and decreasing the number of new cases of addiction; increasing access to medication-assisted treatment; and helping expedite the development of progressively more-effective abuse deterrent formulations of opioid drugs.

Meanwhile, the House of Representatives Committee on Energy and Commerce Oct. 11 held a “Member Day” hearing on the opioid epidemic. More than 50 members of Congress testified about how the opioid epidemic is affecting their communities and propose solutions to fix the issue.


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

Joseph Bañez
Legislative Analyst
Telephone: 202-739-2995


NIGMS Announces New Institutional Research Training Grant

October 13, 2017—The National Institute of General Medical Sciences (NIGMS) Oct. 6 announced its new Ruth L. Kirschstein National Research Service Award (NRSA) Predoctoral Institutional Research Training Grant (T32). Applications open April 25, 2018. The goal of the NIGMS-specific T32 is to place more emphasis on trainee development. Last August, AAMC submitted comments to NIGMS in response to a request for information on how to catalyze the modernization of biomedical graduation. The new T32 reflects many of the AAMC’s recommendations.

While the new grant application continues to emphasize a strong research training program that will produce rigorous scientists, the application now contains new requirements to ensure that trainees are prepared to enter a broader range of careers in the biomedical workforce, not only the research track, once training is complete. To accomplish this, applications must contain a Program Plan that focuses on key areas, including those described below.

Career development: The Program Plan must address the career development of trainees, outlining a plan to provide trainees with information on a variety of careers and career outcomes of their program. It also requires the program to provide trainees with opportunities to learn career skills, such as leadership, communication, and teamwork, as well as experiential learning opportunities to gain skills and networks to transition into careers. Additionally, each program faculty member must describe how they will encourage the career development of their trainees.

Rigor and reproducibility: Training scientists to conduct rigorous and reproducible research must be emphasized by the program, including how it will synergize this topic with its “responsible conduct of research” training and develop a “Plan for Instruction in Methods for Enhancing Reproducibility.”

Diversity and Inclusion: The program needs to include plans to increase diversity and inclusion by actively recruiting underrepresented groups, forming a candidate review process that considers all types of qualifications that can result from different backgrounds, fostering inclusive research environments, and ensuring diverse program faculty.

Evaluation: While continuing previous requirements for evaluation of the quality and effectiveness of scientific training, the NIGMS T32 evaluation adds a focus on career outcomes and mentor training. The program needs to provide a plan to track career outcomes and disseminate information about them to both trainees and the public. It must also provide a plan for all mentors to be trained in mentorship, in addition to a plan for mentors to be evaluated and held accountable to the program standard.


Jodi B. (Lubetsky) Yellin, PhD
Director, Science Policy
Telephone: 202-828-0485

Amanda Field, PhD
Specialist, Science Policy
Telephone: 202-828-0542

AAMC Submits Comment Letter on Proposed Cancellation of Episode Payment Models and Changes to the Comprehensive Care for Joint Replacement Model

October 13, 2017—The AAMC Oct. 12 submitted a comment letter to the Centers of Medicare and Medicaid Services (CMS) regarding the cancellation of Episode Payment Models (EPMs) under the proposed rule entitled, “Medicare Program; Cancellation of Advancing Care Coordination through Episode Payment and Cardiac Rehabilitation Incentive Payment Models; Changes to Comprehensive Care for Joint Replacement Payment Model (CJR)”. The rule proposes to: 1) eliminate the Episode Payment Models (EPMs) and Cardiac Rehabilitation (CR) incentive payment model, and 2) reduce the number of metropolitan statistical areas (MSAs) required to participate in CJR.

Episode Payment Models (EPMs)

The EPMs were designed to incentivize providers to deliver higher quality cardiac and orthopedic care at a lower cost. The EPMs were designed around three clinical conditions:

  • Acute Myocardial Infarction (AMI) Model,
  • Coronary Artery Bypass Graft (CABG) Model,
  • Surgical Hip and Femur Fracture Treatment (SHFFT) Model.

Prior to the release of CMS’ proposed rule to cancel EPMs, EPMs were scheduled to launch on January 1, 2018, and end December 31, 2021. Participation in EPMs was mandatory for hospitals located in select Metropolitan Statistical Areas (MSAs). The AMI and CABG Models were originally mandated in 98 MSAs comprising approximately 1,120 hospitals. The SHFFT model would be implemented in the 67 CJR MSAs, including approximately 860 hospitals.

Comprehensive Care for Joint Replacement Payment Model(CJR)

CMS proposes to reduce the number of metropolitan statistical areas, or MSAs, required to participate in CJR from 67 to 34, and to permit hospitals in the remaining 33 voluntary MSAs to choose whether to continue to participate in the model. Additionally, CMS would exempt rural hospitals and low-volume hospitals from mandatory participation.

To allow hospitals eligible for voluntary participation to continue in the model, CMS proposes a one-time voluntary participation election period, beginning January 1, 2018, and ending January 31, 2018. During this time, hospitals which elect to continue in the CJR model can submit a participation election letter to CMS. A hospital’s decision is effective February 1, 2018.

In order to: 1) allow hospitals greater flexibility in alternative payment models, and 2) encourage hospitals to participate in CJR voluntarily, AAMC recommended that CMS:

  • Create an additional opt-in period for CJR in January 2019;
  • Reduce the regional component of the CJR target price in Performance Years 3-5;
  • Reexamine diagnoses and procedures which could qualify for exclusion from CJR; and
  • Release programmatic details regarding the next iteration of BPCI by November 1, 2017.

Additionally, AAMC urged CMS to establish more certainty for the provider community regarding the future path to value-based care. AAMC remains committed to supporting the implementation efforts of AMCs that continue to participate in CJR as well as those of providers that pursue other alternative payment models.


Lauren Kuenstner
Healthcare Payment Reform Specialist
Telephone: 202-741-5516


On the Hill

October 13, 2017—One week after the Senate Oct. 4 confirmed Eric D. Hargan to serve as deputy secretary of the U.S. Department of Health and Human Services, the White House announced that Mr. Hargan will serve as Acting Secretary of Health and Human Services.

On Oct. 11, the White House announced its intent to nominate Kirstjen Nielsen as Secretary of Homeland Security. The press statement released by the White House states that Ms. Neilson is the first nominee for this position to have previously worked within the Department of Homeland Security, having served there in two administrations, first as senior legislative policy director for Transportation and Security Administration under President George W. Bush and then as Department of Homeland Security Chief of Staff under President Trump.

On the Agenda

Oct. 17: Senate HELP Committee Hearing on Drug Delivery Systems
10:00a.m.; 430 Dirksen Senate Office Building
The Senate Health, Education, Labor & Pensions Committee will hold a hearing on “The Cost of Prescription Drugs: How the Drug Delivery System Affects What Patients Pay.”

Oct. 17: AAMC Capitol Hill Briefing on the Opioid Epidemic
12p.m.; Capitol Visitor Center, HVC-201
The Association of American Medical Colleges will hold a briefing on “How Medical Schools and Teaching Hospitals Are Reaching Underserved Communities in the Opioid Epidemic.”

Oct. 20: President's Commission on Combating Drug Addiction and the Opioid Crisis
Livestream at
The President's Commission on Combating Drug Addiction and the Opioid Crisis will hold its fourth commission meeting to discuss insurance issues related to the opioid epidemic.

*The House of Representatives is on a district work period from Oct. 16-20.


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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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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806