This Week in Washington – May 22, 2015

Cures Bill Unanimously Passes Energy and Commerce Committee

On May 7, the House Energy and Commerce Committee passed the 21^st Century Cures bill by a unanimous vote of 51-0. The legislation is designed to streamline clinical research and make more flexible industry pathways to approve medical devices and drugs to speed up the discovery, development and delivery of new medical treatments. The bill also includes $550 million to create a Cures Innovation Fund for the FDA and $10 billion over five years for NIH medical research.

The committee accepted an amendment offered by Chairman Fred Upton (R-MI) that proposed about $13 billion in offsets to pay for the bill’s costs. Upton’s offsets included: $8 billion from selling several million barrels of oil each year for eight years from the Strategic Petroleum Reserve; $2.8 billion from lowering Medicaid payments to match the durable medical equipment reimbursement to Medicare rates; $1.8 billion from calculating the Federal Upper Limit reimbursement using generic drug prices; and $100 million from Part D provider and patient assignment.

Earlier in the week, the committee considered including major reforms to the 340B Drug Pricing Program. The sweeping changes would have narrowed the definition of patients for whom hospitals can receive discounted drugs and required hospitals to fund greater government oversight by paying a 0.1 percent user fee on each discounted drug. However, they were removed after hospitals lobbied heavily against the provisions.

While the measure is expected to pass the full House after the Memorial Day recess, its progress may slow considerably since the Senate Health Education Labor and Pensions Committee has indicated it does not plan to move a companion bill until 2016.

Medicare Recovery Audit Program Targeted for Reform After Spike in Observation Stays

During a hearing on May 6, the Senate Special Committee on Aging called on CMS to reform Medicare’s recovery audit contractor (“RAC”) program using recommendations supported by the Medicare Payment Advisory Commission (“MedPAC”). Committee members also encouraged CMS to make other changes to address the hospital observations stay issue.

According to CMS, beneficiaries admitted as inpatients under Medicare Part A generally pay a one-time deductible for all hospital services received during the first 60 days of their stay. Beneficiaries who are treated under an outpatient observation status, however, pay a 20 percent copay for physician services.

The Executive Director of the MedPAC, Mark Miller, testified that his organization backs the recommendations, including withdrawal of the two-midnight payment rule for inpatient stays, decreasing contingency fees contractors with high overturn rates and limiting the look-back review period for changing the RAC process. Sean Cavanaugh, CMS Deputy Administrator and Director, said the agency has already taken action to reform the RAC process.

Bills Introduced This Week

Rep. Michael Burgess (R-TX) introduced a bill (H.R. 2461) that would amend Title XVIII of the Social Security Act to improve access to, and utilization of, bone mass measurement benefits under Part B of the Medicare program by establishing a minimum payment amount under such part for bone mass measurement.

Rep. Joe Heck (R-NV) introduced a bill (H.R. 2476) that is intended to facilitate the transition to Medicare for individuals enrolled in group health plans. The bill would also establish a three-month open enrollment period under Medicare Advantage.

Rep. Marsha Blackburn (R-TN) introduced a bill (H.R.2437) to amend Part B of Title XVIII of the Social Security Act regarding high cost durable medical equipment. The legislation proposes updates to the Medicare program to provide more coverage for durable equipment.

Sen. Dick Durbin (D-IL) introduced a bill (S. 1374) that would amend the Higher Education Act of 1965 to establish fair and consistent eligibility requirements for graduate medical schools operating outside of the United States and Canada.