Stark and AKS Rules Cross the Finish Line of HHS Regulatory Sprint

With a bold finish, the Department of Health and Human Services (HHS) crossed the finish line of its race to modernize and clarify the regulations interpreting the federal physician self-referral law (Stark) and anti-kickback statute (AKS) through final rules released Nov. 20, 2020. With one exception, the Stark and AKS rules, based on October 2019 proposals, are effective on Jan. 19, 2021 – the day before the presidential inauguration. A separate AKS rule released the same day revises the discount safe harbor and creates new safe harbors focused on pharmaceutical distribution models. This rule follows a February 9, 2019 proposed rule and a July 24, 2020 Executive Order directing that HHS complete the rulemaking.

Through its Regulatory Sprint to Coordinated Care, HHS has acted to support innovative arrangements to improve quality outcomes, produce health system efficiencies, lower costs and promote care coordination, with an overarching goal of transforming the healthcare system into one that better pays for value. The Centers for Medicare & Medicaid Services (CMS) and the Office of the Inspector General (OIG) coordinated closely on the rules, which finalize proposed protections for value-based arrangements, with some modifications, and also clarify and revise existing Stark and AKS requirements that are viewed as barriers to coordinated and value-based care or that simply cause undue confusion and burden. The OIG additionally acknowledged that these “[f]lexibilities to engage in new business, care delivery and digital health technology arrangements with lowered compliance risk may assist industry stakeholders in their response to and recovery from the current public health emergency resulting from the [COVID-19] pandemic.” Continue Reading

Capitol Hill Healthcare Update

CORONAVIRUS WORRIES CONTINUE AFTER EMERGENCY FUNDING BILL

Congressional approval last week of emergency spending to address the coronavirus hasn’t allayed Capitol Hill’s concerns about preparedness and response as the impact of the virus in the United States rapidly escalates.

Two lawmakers – Sen. Ted Cruz, R-Texas, and Rep. Paul Gosar, R-Ariz. – announced this weekend that after interacting with an individual last week who later tested positive for COVID-19, they were taking precautionary measures and would not be in Washington this week. The No. 3 elected House Republican, Rep. Liz Cheney, R-Wyo., was absent from a GOP retreat in Maryland this weekend because she wanted to limit participation in nonessential gatherings.

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Capitol Hill Healthcare Update

AZAR TO TESTIFY THIS WEEK BEFORE HOUSE, SENATE COMMITTEES

Health and Human Services Secretary Alex Azar faces a marathon week of testimony, appearing before four congressional committees to discuss his department’s fiscal 2021 budget.

In addition to funding issues, Azar is likely to face questions on the federal government’s response to the coronavirus outbreak. Last week 25 Senate Democrats wrote to Azar, pressing the administration to request emergency funding.

Lawmakers are likely to grill Azar on prescription drug pricing and the administration’s approach to addressing costs. Democrats also are expected to criticize the administration’s actions regarding Affordable Care Act implementation.

Azar will testify Tuesday before the Senate Appropriations Subcommittee that funds HHS, then Wednesday in the House Appropriations Subcommittee. The secretary will go before the House Commerce Health Subcommittee on Wednesday, where he will discuss the budget and HHS’s response to the coronavirus.

Finally, Azar will testify Thursday at the House Ways and Means Committee.

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Capitol Hill Healthcare Update

SURPRISE BILLING PROGRESS DRIVES THE WEEK

Legislation to address surprise medical bills is moving forward this week, as two House committees mark up their own plans to protect patients.

After progress stalled at the end of last year, the House Ways and Means Committee jump-started it by announcing it would move forward with its proposal. The committee plans to take up the bipartisan bill Wednesday.

Tuesday, the Education and Labor Committee will enter the fray with its own bill. Chairman Bobby Scott, D-Va., and Ranking Member Virginia Foxx, R-N.C., released the proposal last week.

The key point of contention among the different plans is the mechanism used to resolve billing disputes. The Ways and Means approach relies on independent arbitration when insurers and providers cannot negotiate a solution on their own. A bipartisan agreement by the House Energy and Commerce and Senate Health, Education, Labor and Pensions committees uses a benchmark payment rate. The new Education and Labor proposal appears to hew more closely to the Energy and Commerce approach.

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Capitol Hill Healthcare Update

SURPRISE BILLING FIX REGAINING TRACTION?

Legislation to address unexpected bills for out-of-network medical care appears to be making a comeback, after a committee turf battle stalled its progress at the end of last year.

House leaders want to pass a bill by May, when they intentionally created a deadline for several popular health programs that will need congressional reauthorization. Leaders hope to drive action on surprise billing and prescription drug costs in May.

House Ways and Means Chairman Richie Neal, D-Mass., plans this week to release his committee’s bipartisan legislation. Neal says the committee will vote on its bill Feb. 12. The plan relies on outside mediation to settle billing disputes; a competing plan from the House Energy and Commerce Committee uses a benchmark payment rate.

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Capitol Hill Healthcare Update

CONCERNS ABOUT CORONAVIRUS GROW ON CAPITOL HILL

As coronavirus cases continue to emerge in the United States and worldwide, lawmakers are seeking briefings from federal health officials about the outbreak that originated in China and what steps U.S. health agencies are taking to protect Americans.

Five cases were confirmed in the United States, but there have been nearly 3,000 people infected and 81 related deaths in China. The virus is from the same family of viruses that caused previous outbreaks of severe acute respiratory syndrome, or SARS.

Senators on Friday received a briefing from the Centers for Disease Control and Prevention (CDC). Officials told senators that the risk to the American public is low, and that the agency has the resources it needs to address the spread of the disease.

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Capitol Hill Healthcare Update

NEW SENATOR JOINS HEALTH COMMITTEE

Newly sworn-in Sen. Kelly Loeffler, R-Ga., is the newest member of the Senate Health, Education, Labor and Pensions Committee. Loeffler took the oath of office last week, replacing retired Sen. Johnny Isakson, R-Ga.

Committee Chairman Lamar Alexander, R-Tenn., praised Loeffler as having the background and skills to “immediately become an effective member of the committee.”

The committee’s jurisdiction includes public health, biomedical research and development including authorization and oversight of the Food and Drug Administration, aging, and individuals with disabilities.

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Capitol Hill Healthcare Update

SPRING DEADLINE DRIVES 2020 HEALTH POLICY AGENDA

Few policy issues consumed more political oxygen on Capitol Hill last year than prescription drug prices and surprise medical bills – but without significant legislative achievement on either.

But Congress is going to try again, setting up a spring deadline to force action on key healthcare provisions. Despite the new inflection point, lawmakers remain far apart on drug prices, though they are much closer to agreeing on legislation that would end surprise medical bills.

The budget legislation that Congress approved last month created a May 22 deadline when several popular health programs will expire. Congressional leaders intentionally set this date in the hopes that it would drive action on drug prices and surprise billing, and that legislation to extend the expiring programs will act as a vehicle for major health policy.

Yet despite lawmakers’ professed hopes to ultimately solve both issues this year, there is no evident path to do so amid sharp divisions on policy details.

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Capitol Hill Healthcare Update

ACA TAXES ON CHOPPING BLOCK IN YEAR-END BUDGET DEAL

Congressional leaders are poised to announce an agreement today that would permanently repeal the Affordable Care Act (ACA) taxes on medical device manufacturers, insurers and high-cost health plans as part of a spending package that would avoid a government shutdown later this week.

If the tax provisions are repealed, it would represent an enormous victory for the healthcare industry, which has been lobbying against the taxes since the ACA was enacted nearly a decade ago.

Congressional budget forecasters estimate the medical device tax would generate more than $20 billion over 10 years, while the so-called Cadillac tax on pricey health plans was expected to generate $200 billion. The tax on insurers was similarly projected to raise tens of billions of dollars annually.

Congress was not expected to offset the loss of revenue from those taxes.

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Capitol Hill Healthcare Update

YEAR-END LEGISLATIVE OVERDRIVE

This week is crunch time on a host of legislative priorities, and various health-related provisions hang in the balance.

Lawmakers and staff worked all weekend negotiating on legislation to fund the government beyond next Friday’s deadline, when current funding expires. As the only true must-pass legislative vehicle before the end of the year, it’s the last best hope for the policy priorities of many stakeholders, including the medical device industry, which is seeking relief from the Affordable Care Act device tax before it comes back into effect Jan. 1.

With spending negotiations now at the leadership level, Speaker Nancy Pelosi is the primary obstacle for device manufacturers. Device tax repeal or suspension enjoys broad bipartisan support, including from Senate Democratic Leader Chuck Schumer, D-N.Y. Many House Democrats in competitive districts represent significant clusters of industry employees, and those members are continuing to weigh in with Pelosi in opposition to the tax.

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