RBMA Washington Insider - July 10, 2017

1. Issue Spotlight: Medical Malpractice Reform Legislation Passes the House

Ahead of their week-long 4th of July recess, the House of Representatives passed medical malpractice reform legislation (H.R. 1215) that would  cap noneconomic awards at $250,000 and limit contingency fees in lawsuits involving government subsidized care. That includes people on Medicare or Medicaid, people receiving subsidies for insurance in the individual market, government employees and veterans. The cap would be on “non-economic” damages – the awards given for disabilities or physical pain and suffering. The bill would not impose a cap on the award amount for direct monetary losses. The legislation applies to health care providers, including nursing homes, and makers of drugs and medical devices.

The Congressional Budget Office (CBO) estimates the bill would save more than $50 billion over a decade, about $44 billion of which would be attributed to decreases in federal spending (CBO also expects $6 billion in increased revenues). That estimate is based on expectations that spending on medical liability premiums would decrease substantially, as well as a slight decrease in the utilization of healthcare services.  Overall, CBO estimates that enacting the legislation would reduce national health spending by about 0.4 percent, with providers adjusting their behavior over about four years.

Importantly, passage in the House last month does not necessarily portend quick action in the Senate. The bill passed the House by a vote of 218 to 210 with 19 Republicans voting against it and no Democrats voting for it. To advance in the Senate, the bill would need the support of at least 8 Democrats — none have signaled their support so far. Democrats have argued the bill would hurt women, children and the poor. For example, House Democrats contend that contingency fees give the poor access to jury trials they otherwise could not obtain.  Others have said that noneconomic damages are more important to those, such as women and children, who are less likely to establish lost wages and other economic damages. As Republicans point to medical malpractice reform as a key plank in ‘Phase 3’ of their healthcare reform efforts, don’t expect Democrats to lend them support any time soon.

2. Last Week in Review

Washington was quiet last week as lawmakers celebrated July 4 in their home districts and President Trump travelled to Europe for the G-20 summit of the world’s leading economies. Both groups were met by some protests; lawmakers who held in-district events faced raucous crowds over the ongoing debate on the Republican effort to repeal and replace the Affordable Care Act (ACA), and the President (along with other world leaders) faced a hostile reception from protestors in Hamburg, Germany. The officials should thus be happy to return to Washington this week, where three weeks remain before the depart again for Congress’s traditional month-long August recess.   

3. McConnell Opens Door To Bipartisan Market Stabilization Effort; GOP Senate Support for McConnell Bill Waivers

Senate Majority Leader Mitch McConnell (R-KY) floated the option of a bipartisan fix for the individual insurance market at a Rotary Club lunch in his home state last Thursday, as passage of the Senate's Better Care Reconciliation Act looks increasingly uncertain. He stated that if his “side” was unable to agree on an adequate replacement, then some other sort of action would have to occur, adding that “no action is not an alternative.” Senate Minority Leader Charles Schumer (D-NY) touted McConnell's comments, saying the Kentucky Republican “opened the door to bipartisan solutions,” and that democrats are “eager to work with Republicans to stabilize the markets and improve the law.”

Last Wednesday, Sen. John Hoeven (R-ND) told a health care round table that he couldn't support the bill as written. His critique follows vocal defections by Republican moderate Sens. Dean Heller (NV), Susan Collins (ME), Rob Portman (OH), Shelley Moore Capito (WV) and Jerry Moran (KS) as well as conservative Republican Sens. Rand Paul (KY), Ron Johnson (WI), Mike Lee (UT) and Ted Cruz (TX) -- all of whom say they can't support the bill without major changes. Some GOP members, such as Senate Health, Education, Labor and Pensions Chairman Lamar Alexander have previously expressed support for passing legislation in the short term to help shore up the markets before a major overhaul of the 2010 health care law is advanced.

4. Cruz Health Care Proposal Causes Tension Among GOP Senators

One of the most prominent changes being considered as part of the Republicans’ last-ditch effort to pass a comprehensive healthcare reform bill is an amendment from conservative Sen. Ted Cruz (R-TX) that would provide a state waiver process to allow insurers to sell non-ACA compliant health plans as long as they also offer at least one qualified health plan (QHP) at the silver and gold coverage levels. The idea is being scored by the CBO and has received the endorsement of fellow conservative Sen. Mike Lee (R-UT) — who said that he won’t vote for a package that does not include the Cruz amendment — but it is unlikely to gain the approval of skeptical moderates such as Sens. Dean Heller (R-NV) and Susan Collins (R-ME) who fear that such an offering would cause further erosion of the ACA plans’ already-shaky risk pools. In short, the dynamic pitting conservatives against moderates that has dominated Senate negotiations since the upper chamber received the House’s American Health Care Act (AHCA) looks set to continue: Leader McConnell may be able to garner the votes necessary to get a bill back to the lower chamber, but the path to 50 votes remains very narrow.

5. House Republicans Move to Block ACA Insurance Mandate

An appropriations bill approved two weeks ago by the Subcommittee on Financial Services and General Government includes language that prohibits funding from being used by the IRS to "implement or enforce" the Affordable Care Act’s individual mandate. The current penalty for not having insurance is either a percentage of a household income above the IRS filing threshold or a flat dollar amount, whichever is greater. The plan is separate from Republican efforts to repeal the health care law, and appears more likely to be adopted because it would be written into the annual spending bill for the Treasury and the I.R.S. The restrictions would begin with the fiscal year, starting October 1st. The bill would also prohibit the I.R.S. from enforcing a requirement that employers and insurance companies inform the government of the name and social security number of anyone to whom they provide health insurance coverage.

Approximately 6.5 million taxpayers paid $3 billion for not having insurance in 2015, IRS Commissioner John Koskinen wrote in a letter to Congress earlier this year. The average payment was about $470. The Senate's healthcare plan would also repeal the individual mandate, as well as the Medicaid expansion and several ACA taxes implemented to help pay for the law. Repealing the mandate without replacing it with another mechanism aimed at encouraging healthy people to buy insurance would increase premiums, especially for older and sicker people, the Congressional Budget Office said in an analysis last month.

6. Feds Modify Security Advice After Cyberattack

A cyberattack based on “notPetya,” a variant of Petya ransomware, began hitting organizations around the world on June 27. Unlike Petya, which was first discovered in 2016, information systems infected with “notPetya” cannot be restored even after a ransom is paid—meaning, it was probably intended to inflict irreparable damage on its targets. Though the cyberattack was primarily targeted at Ukrainian interests, Nuance Communications and several other American companies conducting business in the Ukraine were impacted. On July 5, Nuance reported its health care business was affected most by the attack. It is regularly updating customers about the recovery effort on a website dedicated to its response.

The U.S. National Cybersecurity and Communications Integration Center (NCCIC) generally recommends against paying ransoms. In the aftermath of the “notPetya” outbreak, the U.S. Department of Health and Human Services (HHS) shared the following updated recommendations for health care organizations infected by ransomware:

  1. Please contact your FBI Field Office Cyber Task Force or U.S. Secret Service Electronic Crimes Task Force immediately to report a ransomware event and request assistance. These professionals work with state and local law enforcement and other federal and international partners to pursue cyber criminals globally and to assist victims of cyber-crime.
  2. Please report cyber incidents to the US-CERT and FBI’s Internet Crime Complaint Center.
  3. If your facility experiences a suspected cyberattack affecting medical devices, you may contact FDA’s 24/7 emergency line at 1-866-300-4374. Reports of impact on multiple devices should be aggregated on a system/facility level.
  4. For further analysis and healthcare-specific indicator sharing, please also share these indicators with HHS’ Healthcare Cybersecurity and Communications Integration Center (HCCIC).

The U.S. government is also linking interested parties to mitigation information and tools offered by the National Health Information Sharing and Analysis Center (NH-ISAC) to help vaccinate vulnerable computer systems against the specific “notPetya” malware threat.

7. The Week Ahead

The House and Senate return to Washington this week with health care still at the top of the agenda. However, it does not appear that the recess has made the a path to 50 votes any easier for Senate Majority Leader Mitch McConnell (R-KY), setting up a pivotal three weeks before the August recess for Senate Republicans to make a last-ditch effort to pass their version of legislation to repeal and replace the Affordable Care Act (ACA). Leader McConnell said in a local meeting in Kentucky last week that a failure to get to 50 votes will force Republicans to work across the aisle with Democrats on a more modest piece of legislation to simply shore up the ACA’s insurance markets, meaning that August appears to be a relatively firm deadline for Republicans to unite on a comprehensive package. A full breakdown on developments to the Senate’s plan is included in the roundup below.

Floor action this week will be highlighted by the House’s consideration of the $696.5 billion National Defense Authorization Act (NDAA) to provide for the Pentagon’s funding and policy in the upcoming fiscal year. The major annual bill (H.R. 2810) includes significant increases in defense spending for the fiscal 2018 year, with $21 billion in additional funds for Pentagon weapons programs and another $6 billion for the Navy to increase its shipbuilding. Most Democrats have objected to the spending figure — which significantly exceeds the budget cap set for defense — and difficult negotiations are likely ahead as lawmakers debate whether or not to ease the discretionary budget limitations that typically constrain defense spending.

The Senate’s floor action will consist of a series of presidential nominations, starting with a final up or down vote on the nomination of Neomi Rao to serve as “regulatory czar” at the Office of Information and Regulatory Affairs (OIRA). Other nominations to be considered next week include David Nye to be U.S. District Judge for the District of Idaho and Francis Hagerty to be Ambassador to Japan.

In health committee action, the House Energy and Commerce Health Subcommittee holds a hearing on Wednesday on off-label and pre-approval communication by drug and device manufacturers. Also Wednesday, the Senate Special Committee on Aging holds a hearing on ensuring nutrition for older adults. On Thursday, CQ Roll Call hosts a discussion on opioid abuse with Sen. Joe Manchin (D-WV), Rep. Tim Murphy (R-PA), Rep. Ann McLane Kuster (D-NH), and officials from the Veterans Administration and a handful of localities.

8. Upcoming Events

Mon. (7/10)

  • No events

Tue. (7/11)

  • 9:00am-12:45pm – Briefing: End-of-Life Care – The Health Affairs Blog hosts a briefing on advanced illness and end-of-life care. Details here.
  • 10:00am-11:30am – Report Release: Long-Term Care – The Bipartisan Policy Center’s Long-Term Care Financing Initiative releases a report, Financing Long-term Services and Supports: Seeking Bipartisan Solutions in Politically Challenging Times.” Remarks will be offered by Tom Daschle and William H. Frist, both former Senate Majority Leaders. Details here.
  • 12:30pm-5:00pm – FDA Meeting: Oncologic Drugs – The Food and Drug Administration (FDA) hosts a meeting of the Oncologic Drugs Advisory Committee to discuss a biologics license application from Wyeth Pharmaceuticals. Details here
  • 2:30pm – Hearing: Veteran Health Legislation – The Senate Committee on Veterans’ Affairs convenes a hearing on pending healthcare legislation. Details here.

Wed. (7/12)

  • 8:00am-5:00pm – FDA Meeting: Oncologic Drugs – The FDA hosts a meeting of the Oncologic Drugs Advisory Committee to discuss a biologics license application from Novartis Pharmaceuticals. Details here.
  • 9:30am – Hearing: Indian Health Service Budget – The Senate Appropriations Subcommittee on the Department of the Interior, Environment, and Related Agencies convenes a hearing to review the fiscal year (FY) 2018 budget request for the Indian Health Service. Details here.
  • 9:30am – Hearing: Nutrition and Aging – The Senate Special Committee on Aging convenes a hearing, “Nourishing our Golden Years: How Proper and Adequate Nutrition Promote Health Aging and Positive Outcomes. Details here.
  • 10:00am – Hearing: State Opioid Abuse Models – The House Energy and Commerce Oversight and Investigations Subcommittee holds a hearing, “Combating the Opioid Crisis: Battles in the States.” Details here.
  • 10:15am – Hearing: Off-Label Communication – The House Energy and Commerce Health Subcommittee convenes a hearing, “Examining Medical Product Manufacturer Communications.” Details here.
  • 1:00pm-3:00pm – NQF Meeting: Care Transitions – The National Quality Forum (NQF) convenes a meeting of the Transitions of Care Expert Panel. Details here.
  • 2:00pm-3:30pm – MLN Call: National Provider Identification – The Centers for Medicare and Medicaid Services’ Medicare Learning Network (MLN) hosts a call for providers on how to create, verify, or look up your National Provider Identifier (NPI) using the National Plan and Provider Enumeration System (NPPES). Details here.
  • 2:30pmMarkup: FY18 VA-MilCon Appropriations – The Senate Appropriations Subcommittee on Military Construction, Veterans Affairs, and Related Agencies convenes a subcommittee markup of its FY 2018 spending bill. Details here.
  • 3:00pm-4:00pm – CMS Webinar: Comparative Billing Report – The Centers for Medicare and Medicaid Services (CMS) hosts a webinar to discuss comparative billing report on anesthesia services for lower endoscopic procedures. Details here.

Thurs. (7/13)

  • 8:00am-5:00pm – FDA Meeting: Oncologic Drugs – The FDA hosts a meeting of the Oncologic Drugs Advisory Committee to discuss a biologics license application for a proposed biosimilar to Genentech/Roche’s AVASTIN (bevacizumab), submitted by Amgen Inc. Details here.
  • 8:30am-12:00pm – Briefing: Opioid Abuse – CQ Roll Call hosts an event, “Fighting the Opioid Crisis,” at the Newseum, at which officials from the VA and Members of Congress speak. Details here.
  • 10:00am – Hearing: Tax Reform – The House Committee on Ways & Means convenes a hearing on how tax reform will help America’s small businesses grow and create new jobs. Details here.
  • 10:00am-11:30am – BPC Panel: State Waiver Authority – The Bipartisan Policy Center hosts a group of state and federal policy experts to discuss existing waiver authorities under Sections 1115 and 1332, how the House and Senate healthcare bills might change that authority, and how the Trump Administration might implement them. Details here.
  • 10:30am – Markup: FY18 VA-MilCon Appropriations – The Senate Committee on Appropriations convenes a full committee markup of the FY 2018 Military Construction, Veterans Affairs Appropriations bill. Details here.
  • 2:00pm-3:00pm – CMS Open Door Forum– The Centers for Medicare and Medicaid Services (CMS) host an Open Door Forum to discuss rural health. Details here.

Fri. (7/14)

  • July 10-July 11 – FDA Workshop: Opioids – The Food and Drug Administration (FDA) hosts a workshop, “Data and Methods for Evaluating the Impact of Opioid Formulations with Properties Designed to Deter Abuse in the Post-market Setting: A Scientific Discussion of Present and Future Capabilities.” Details here.
  • July 10-Jun 11 – FDA Workshop: Bacteriophage Therapy – The Food and Drug Administration (FDA) holds a workshop to exchange information with the medical and scientific community about regulatory issues associated with bacteriophage therapy. Details here.
  • July 11-July 12 – NQF Webinar: Standards – The National Quality Forum (NQF) convenes the Consensus Standards Approval Committee (CSAC) for a webinar. Details here.
  • July 13-July 14 – CDC Meeting: Infection Control – The Centers for Disease Control holds a meeting of the Healthcare Infection Control Practices Advisory Committee. Details here.