This Week in Washington - May 25, 2012

Senate Passes FDA Reauthorization Bill

In a rare display of bipartisanship, the Senate passed the Food and Drug Administration Safety and Innovation Act (S.3187) Thursday night by a vote of 96-1. The legislation, sponsored by Sens. Mike Enzi (R-WY) and Tom Harkin (D-IA), creates a user-fee program for biosimilar and generic drugs. It also includes the following drug shortage provisions:

Drug manufacturers would be required to notify HHS six months in advance of a discontinuance or “meaningful interruption” of a drug that is life-supporting, life-sustaining or intended to prevent a debilitating disease, is a sterile injectable product or is a drug used in emergency medical care or surgery (e.g., anesthetics).
Requires the Secretary to issue guidance regarding hospital pharmacies repackaging and safely transferring repackaged drugs among hospitals within a common health system during a shortage.
Requires the Secretary to establish a process whereby hospitals, physicians and other entities may report evidence of a drug shortage.
Establishes a Task Force to develop and implement a strategic plan for preventing or mitigating drug shortages.
Requires a GAO study on market factors contributing to drug shortages and stockpiling.

The Senate bill could either be voted on by the full House or reconciled with a House version of the FDA legislation that has not yet passed. Read more here.

Physician/Congressmen Crafting SGR Replacement

Reports indicate Reps. Tom Price (R-GA) and Charles Boustany (R-LA), physicians who serve on the House Ways and Means Committee, are working on the framework of a new Medicare physician payment model to replace the current Sustainable Growth Rate (“SGR”). Although neither Congressman’s office would comment publically on the specific details of the model, industry lobbyists believe it includes statutory payment updates that are automatically cut after five years, along with balance billing, medical malpractice reforms and gain-sharing. Gain-sharing allows providers to work together in groups to manage care and share savings in the form of bonuses. It is relatively non-controversial. However, support for balance billing, which allows doctors to charge more than the Medicare payment rates, is split along party lines. Republicans believe it would keep more doctors in the Medicare program and allow beneficiaries to pay what they want if they can afford it. Democrats believe it would limit access and unfairly treat those beneficiaries who are hospitalized or are in emergency situations and do not have the ability to search for physicians who do not balance bill. The medical malpractice reform provision offers liability protections to providers who comply with best practices. It also provides grants to states for administrative health care tribunals.Meanwhile, the SGR replacement bill introduced by Rep. Allyson Schwartz (D-PA) and Rep. Joe Heck (R-NV) was applauded by most health care provider groups this week. However, the response from the American Medical Association (“AMA”) was timid. The AMA is not publically supporting the bill at this time because it potentially limits options for those physicians who are unable to participate in new delivery models.

MedPAC Appointments Announced

The Comptroller General of the United States announced the appointment of five new members and the reappointment of one existing member to the Medicare Payment Advisory Commission (“MedPAC”) this week. The new appointees are Alice Coombs, MD, Critical Care Specialist and Anesthesiologist, South Shore Hospital, Weymouth, MA; Jack Hoadley, Ph.D., Research Professor, Health Policy Institute, Georgetown University, Washington, D.C.; David Nerenz, Ph.D., Director of the Center for Health Policy and Health Services Research, Henry Ford Health System, Detroit, MI; Rita Redberg, MD, Professor, Clinical Medicine, University of California at San Francisco Medical Center, San Francisco, CA; and Craig Samitt, MD, President and Chief Executive Officer, Dean Health System, Inc., Madison, WI. Their terms will expire in April 2015. The reappointed member, whose term will also expire in April 2015, is Glenn M. Hackbarth, Esq. Read more about the appointments here.

PCORI Releases Funding Announcement

The Patient Centered Outcomes Research Institute (“PCORI”) released a funding announcement calling for research applications in four of five areas outlined in its national research agenda. By the end of the year, PCORI plans to award $96 million in grants for research in assessment of prevention, diagnosis and treatment options, improving health care systems, communication and dissemination and addressing disparities. The quasi-governmental body will announce an additional $24 million in funding for accelerating patient-centered and methodological research later this summer. Any private sector research organization, including non-profit and for-profit hospitals, laboratories and health care systems, may apply for funding. To submit an application for a PCORI research project, applicants must first register using PCORI’s online system, which will be open beginning June 1, 2012. A link to the online system will be available on the PCORI Funding Announcements web page, which can be found here, and application materials can be downloaded from the Funding Opportunities section of PCORI’s website.This week’s funding announcement corresponds with the first four areas of focus in PCORI’s National Priorities for Research and Research Agenda. Those areas are:

Assessment of Prevention, Diagnosis and Treatment Options – for projects that address critical decisions that patients, their caregivers and clinicians face with too little information;
Improving Health Care Systems – for projects that address critical decisions that face health care systems, the patients and caregivers who rely on them and the clinicians who work within them;
Communication and Dissemination – for projects that address critical elements in the communication and dissemination process among patients, their caregivers and clinicians; and
Addressing Disparities – for projects that will inform the choice of strategies to eliminate disparities.

A fifth PCORI Funding Announcement on Accelerating Patient-Centered and Methodological Research, involving up to $24 million in funding, will be issued this summer.

AHA and AMA Split over ICD-10 Compliance Date

The American Hospital Association (“AHA”) and the AMA publically split this week over the one-year delay to the ICD-10 compliance date proposed by CMS. While AHA supports a one-year delay, the AMA is pushing CMS to delay the compliance deadline by at least two years to October 2015. In fact, comments the AMA submitted to CMS make clear that it prefers postponing the transition to ICD-10 indefinitely because the agency has yet to complete a full cost-benefit analysis of the ICD-10 codes, which the AMA believes will take at least two years. AHA and the Federation of American Hospitals (“FAH”) believe a multi-year delay would have adverse financial consequences for organizations that began preparing for the original 2013 compliance date. The FAH believes a one-year delay would allow hospitals to “maintain the drum-beat and keep up momentum.” The American College of Cardiology and the American Academy of Family Physicians also split with the AMA on this issue and support a one-year delay to 2014.

Legislation

The following health care related bills were introduced in the United States Senate this week:

A bill to “amend the Internal Revenue Code of 1986 to provide an income tax credit for eldercare expenses.”
A bill to “develop a model disclosure form to assist consumers in purchasing long-term care insurance.”
A bill to “amend the Internal Revenue Code of 1986 and the Patient Protection and Affordable Care Act to extend, expand, and improve the qualifying therapeutic discovery project program.”

Next Week

The Senate is out for a previously scheduled district work period. The House returns for a brief period of regular legislative business and will hold the following health care related hearing: