Following through on Republican campaign promises, two key Congressional committees released legislation yesterday that further the process of repealing and replacing the Affordable Care Act (ACA). After more than 60 attempts to repeal the ACA since 2010, GOP members of the House Energy and Commerce and Ways and Means Committees released details of the “American Health Care Act” (AHCA). Reaction to the AHCA has been swift and sharp portending a long road from producing legislation that can reach the President’s desk. Continue reading
Category Archives: Medicaid
Around 2 a.m., the Senate voted along party lines to confirm Representative Tom Price to become Secretary of the Department of Health and Human Services. The vote was 52-47 with no Democrats voting in favor. With repeated attacks on his policy record and questions about stock purchases, Price’s nomination was among the most controversial of President Trump’s cabinet selections. With Price in place, now comes the work to fill out other key roles at HHS and develop the administrative process repeal and replace of Obamacare. Continue reading
Today, the President sent Congress the $4 trillion Fiscal Year 2017 Budget Proposal – his last while in office. While the Budget on the whole is dead on arrival in the Republican-controlled Congress, there are provisions worth noting because of their current newsworthiness and possible reemergence in future policy debates. Moreover, proposals directed at addressing the problems associated with opioid abuse could attract bipartisan cooperation this year. Continue reading
We reported yesterday that the Centers for Medicare & Medicaid Services (CMS) Final Average Manufacturer Price (AMP) Rule (the “Final Rule”) was released and will be published in the Federal Register on February 1. If you are still reading, despite the fact that we included “Technical Highlights” in today’s title, we will assume a certain level of familiarity with the Medicaid Drug Rebate Program in our discussion below. However, although the issues addressed in the Final Rule are technical, the business implications are very real, and the Final Rule is significant to all manufacturers with marketed drug products participating in the Medicaid Drug Rebate Program (or who hope to participate someday).
Those of you who have been anxiously awaiting a final AMP rule for years now will be pleased to learn that some long-standing questions raised by CMS’s controversial 2012 proposed AMP rule have been answered (and, of course, some new questions have been raised). Some highlights of the Final Rule, in no particular order:
If you were looking for something fun to read while snow shuts down our nation’s capital tomorrow, the Centers for Medicare & Medicaid Services (CMS) just released the long-awaited Final Medicaid Drug Rebate Program Rule on Average Manufacture Price (AMP) (et al.)! The publication of this Final AMP Rule follows the 2012 publication of CMS’s highly controversial proposed policies implementing various changes to the Medicaid Drug Rebate Program enacted under the Affordable Care Act. This rule has significant potential to impact drug manufacturers’ calculations and policies regarding the Medicaid Drug Rebate Program and pricing more generally, and should be carefully reviewed by all interested parties. It is being issued as a final rule with comment period.
We are currently reviewing the 657 pages of material, and plan to provide more substantive commentary in a subsequent post. For those of you playing along at home, the rule is expected to appear in the February 1, 2016, Federal Register, and comments are expected to be due by 5:00 PM Eastern April 1, 2016 (which is also the effective date of the rule). Separately, State Medicaid Agencies must comply with certain rule requirements by submitting a State Plan Amendment (SPA) by June 30, 2017 to be effective no later than April 1, 2017.
Last week, Congress passed and the President signed into law the Consolidated Appropriations Act of 2016 (“the Omnibus”). This legislation contains both $1.1 trillion in government spending for FY16 as well as $650 billion in tax breaks. The Omnibus includes several health care related provisions, both on the funding and tax sides. This post highlights some of the more significant items.
Key Appropriations Provisions
Title II, Division H, contains the funding and other provisions for the Department of Health and Human Services (HHS). Some of the key provisions are summarized below. The explanatory text for this title of the Omnibus has a description of the numerous HHS funding line items, along with directives and some specifics for each agency within the Department.
340B Drug Program: HRSA is requested to provide a briefing to update the Committees on Appropriations of the House of Representatives and the Senate on the status of 340B guidance, the secure website, and covered entities in the 340B drug program.
National Institutes of Health (NIH): The Omnibus provides a $2 billion increase in funding from fiscal year 2015. The total spending level for FY16 for NIH is $32 billion. Some of the initiatives receiving increased and/or new funding include:
- $936 million for Alzheimer’s research (an increase of $350 million)
- $200 million for Precision Medicine
Centers for Disease Control (CDC): Overall, CDC receives a $300 million increase in funding for a total of $7.2 billion for FY16, as follows:
- $1.2 billion for Chronic Disease Prevention and Health Promotion
- $70 million for the prevention of prescription drug abuse
- $579 million for Emerging and Zoonotic Infectious Diseases
Centers for Medicare & Medicaid Services (CMS): CMS receives $3.6 billion, the same amount appropriated in FY2015.
Prescription Drug Report –Of particular note is that the Omnibus directs the Secretary of HHS, in consultation with the Secretary of the Department of Veterans Affairs, to submit a report to the Committee on Appropriations of the House of Representatives and the Senate, using non-proprietary data, which is only available under current law. The report must be delivered in a time period not later than 180 days after the date of enactment of the Omnibus — December 18, 2015. This report must discuss the following topics: (1) price changes of prescription drugs (net of rebates) since 2003; (2) access to prescription drugs by patients in the four programs listed below; (3) health outcomes and patient satisfaction with care that addresses the four programs listed below; and (4) an analysis of the current cost and length of time necessary to bring new drugs to market. The report “should” include prescription drug prices (net of rebates) paid by Federal programs for the 10 most frequently prescribed drugs and the 10 highest cost drugs under Medicare Part B, Medicare Part D, Medicaid and the Department of Veterans Affairs.
Key Tax Provisions
Two Year Moratorium on the Medical Device Tax: Section 174 of the tax proposals creates a two year moratorium of the 2.3 percent excise tax on the sale of medical devices that took effect in 2013. The tax will not apply in 2016 or 2017.
Delay of the Tax on High Cost Health Plans a/k/a/ the Cadillac Tax: Title 1 of Division P contains a provision that delays the Cadillac Tax for two years (2018 and 2019). This makes the tax on high cost, health insurance plans effective in 2020.
One-Year Moratorium on the Health Insurance Tax (HIT). Title 1 of Division P also includes language setting a one-year moratorium on the annual HIT (2016), making the tax effective in 2017. The annual HIT is, in essence, a sales tax on health insurance premiums.
Contact the Cooley Health Care & Life Sciences Regulatory Practice if you have questions on these or other provisions of the Omnibus.
OIG Report Encourages States to Explore Alternate Methods for Calculating Medicaid Supplemental Rebates
On December 12, 2014, the U.S. Department of Health & Human Services Office of Inspector General (OIG) published a report titled: “States’ Collection of Offset and Supplemental Medicaid Rebates” (OEI-03-12-00520). This report was based on the findings of a 2013 OIG survey of all fifty states and the District of Columbia relating to their collection and reporting of the federal ”offset rebates”. Very basically, the offset rebates are the amounts attributed to the Medicaid drug rebate increase required by the Affordable Care Act (ACA) that must be remitted by the states to the Centers for Medicare & Medicaid Services (CMS). While the report is relatively technical with respect to the state offset rebates (which the OIG finds were accurate), it also includes some interesting background data and recommendations regarding states’ supplemental rebate agreements (SRA) with pharmaceutical manufacturers.