Health Policy Report – April 2, 2024

Dr. Timothy Murphy of RMCC Publishes Letter to the Editor as Colorado House Passes Bill to Restrict White Bagging Mandates

On March 25, the Colorado House of Representatives passed HB 24-1010, which would prohibit white bagging mandates for patients with chronic, complex, rare, or life-threatening medical conditions.

“Health care decisions should be based on the health and safety of a patient, not dictated by profits for health care insurers,” said the bill’s sponsor, Representative Iman Jodeh, D-Aurora, in a statement. “Doctors are sometimes required to order medications for their patients through specific pharmacies, which leads to delays in care and additional costs for patients. We need to make sure Coloradans can access the medication they need, when they need it and this bill breaks down prescription drug access barriers while saving Coloradans money.” 

This action comes after Dr. Timothy Murphy, oncologist-hematologist at Rocky Mountain Cancer Centers (RMCC) penned a letter to the editor (LTE) in the Denver Post urging Colorado lawmakers to advance the bill. “Coloradans battling cancer should be focused on managing their health, not cutting through red tape. It’s critical that Colorado lawmakers advance this bill to put our patients’ safety over insurer profits,” Dr. Murphy wrote. 

The bill now advances to the Colorado Senate, where it will be considered by the Health and Human Services Committee. 

To read a press release from Colorado House Democrats, CLICK HERE. 

To read Dr. Murphy’s LTE in the Denver Post, CLICK HERE.

Federal Appeals Court Upholds Arkansas 340B Law

A federal appellate court recently upheld an Arkansas law that bars drugmakers from restricting how 340B hospitals utilize contract pharmacies. The case marks the latest development in the heavily litigated 340B Drug Pricing Program, which offers drug discounts for providers that care for large numbers of low-income patients.

Arkansas’ law, enacted in 2021, prohibits drugmakers from denying contract pharmacies access to 340B drugs to dispense or from denying 340B discounted pricing to covered entities using contract pharmacies for dispensing purposes. The law was brought to court by the Pharmaceutical Research and Manufacturers of America (PhRMA), who alleged the law was preempted by 340B statute and the Food, Drug, and Cosmetic Act (FDCA).

The appeals court ruling sets a precedent for other states considering similar laws to protect contract pharmacies’ involvement in the program. However, the decision may face further legal challenges from drug manufacturers if other states implement similar laws.  

To read more, CLICK HERE.

House Energy and Commerce Health Subcommittee Holds Hearing on Diagnostic Testing

On March 21, the House Energy & Commerce Health Subcommittee held a hearing to discuss the Food and Drug Administration’s (FDA) proposed rule to regulate lab developed tests (LDTs) and alternative approaches to diagnostic regulation. Specifically, the proposed rule would require medical facilities that use LDTs to get the tests approved by the FDA.

In its comments to the rule last fall, The Network outlined concerns that, as currently drafted, the rule would reduce patient access to critical diagnostic testing and lead to consolidation of physician-owned labs.

During the hearing, Committee Chair Cathy McMorris Rodgers (R-WA) echoed a similar sentiment, calling for the FDA to rescind the rule. “Under the proposed rule, laboratories will incur significant costs to come into compliance,” she stated. “New administrative and clerical burdens along with oppressive submission fees will be a substantial drain on our labs’ limited resources.” 

Representative Frank Pallone (D-NJ), the full committee’s ranking member, favored the rule. “Physicians have years of training and the best interests of their patients in mind,” he said. “By not providing oversight of LDTs, we’re failing them by not ensuring they can trust the tools that they have to guide their patient counseling and develop effective interventions.

Other committee members, however, called for an entirely different solution – passage of the Verifying Accurate Leading-edge IVCT Development (VALID) Act, which would put stricter approval requirements on higher-risk tests. This would grandfather in all existing LDTs for approval and categorize new tests as low, medium, or high risk. All low-risk tests would not require FDA pre-market approval. 

Industry experts anticipate that the FDA’s proposed rule will likely be finalized in April. Clarifying the FDA’s authority over LDTs has been a friction point for years, so it remains to be seen whether a final rule will spur legislative action. 

To watch the hearing, CLICK HERE. 

To read The Network’s comments, CLICK HERE.

To read the VALID Act, CLICK HERE.

To read more, CLICK HERE. 

Members of Congress Send Letters to HHS, Urge Action to Address Change Healthcare Cyberattack 

Following the recent Change Healthcare cyberattack and resulting disruptions for providers and patients, 94 members of Congress recently sent a letter to Xavier Becerra, Secretary of the Department of Health & Human Services (HHS). The letter, led by Representatives Mariannette Miller-Meeks (R-IA) and Robin Kelly (D-IL), urged HHS to ensure timely payment assistance, particularly for small physician practices.

“Smaller physician practices already operate under slim financial margins, especially with the recent cuts in Medicare reimbursement. These challenges are also more acutely felt by practices in rural and underserved areas. While smaller practices potentially face possible closure, larger practices still face an inability to meet payroll,” the lawmakers wrote.

The letter goes on to note that patients are being forced to pay out of pocket for prescriptions due to disruptions in verifying patients’ identities and eligibility for coverage due to the cyberattack. Further, lawmakers expressed concern that patients’ private healthcare information has been compromised due to the cyberattack.

Lawmakers concluded by asking HHS to provide further information on flexible repayment terms for Part B physicians and other providers that receive Advance Payments, concerns regarding patients being forced to pay out of pocket, and how to safeguard patients’ healthcare information.

In a separate letter to HHS, 20 lawmakers, led by Representative Vern Buchanan (R-FL), expressed frustration with the agency’s investigation into the cyberattack. “While we appreciate that the Department of Health and Human Services (HHS) Office for Civil Rights (OCR) recently opened an investigation into the cyberattack on Change Healthcare (and its parent company, UnitedHealth Group (UHG)), we remain concerned that patients are not the primary focus of this investigation,” lawmakers wrote.

As the fallout from the cyberattack continues, lawmakers’ interest in this issue is likely to persist and result in congressional hearings in the coming weeks.

To read the letter led by Representatives Miller-Meeks and Kelly, CLICK HERE.

To read the letter led by Representative Buchanan, CLICK HERE.

MedPAC Releases March Report to Congress

The Medicare Payment Advisory Commission (MedPAC), the agency that advises Congress on Medicare, has issued its March 2024 report evaluating payment adequacy and issuing payment recommendations across seven fee-for-service payment systems, including hospital and physician payments.

Notably, the report recommends that Congress implement an inflation-based physician payment update. However, MedPAC’s recommendation calls for updating the base payment rate by the amount specified in current law plus 50% of the projected increase in the Medicare Economic Index (MEI), a measure of inflation.

While provider groups praised the decision to tie physician payment to inflation, they noted that a 50% inflationary update is inadequate. “MedPAC’s decision recognizes that physician pay is lagging far behind the cost of practicing medicine,” AMA President Jesse Ehrenfeld, M.D., said in a statement. “Yet, an update tied to 50% of MEI—as MedPAC recommended—will cause physician payment to fall even further behind increases in the cost of providing care.”

The commission also urged Congress to enact its 2023 recommendation to establish safety-net add-on payments under the physician fee schedule for services delivered to low-income Medicare beneficiaries. 

To read the MedPAC report, CLICK HERE.

To read more, CLICK HERE.

To read the AMA’s statement, CLICK HERE.

During Congressional Hearings, HHS Secretary Becerra Outlines Health Policy Priorities

Xavier Becerra, Secretary of the Department of Health and Human Services (HHS), recently testified in support of President Biden’s $130.7 billion discretionary spending request for HHS. During his testimony to the House Ways & Means Committee and Appropriations Labor-HHS subcommittee, Secretary Becerra laid out the fiscal 2025 budget proposal for HHS, which includes provisions to address healthcare disparities, advance public health initiatives and bolster healthcare infrastructure.   

The budget includes six key proposals to reduce prescription drug costs, including preventing surprise medical bills, reducing facility fees, capping out-of-pocket costs, and expanding Medicare’s drug price negotiation program to negotiate drug prices. Following Secretary Becerra’s testimony, the White House released a fact sheet confirming that the Biden administration is seeking to expand the number of drugs that Medicare can negotiate from 20 to at least 50.

Additionally, during the House Ways & Means committee hearing, Secretary Becerra provided an update on the timing of new guidance from HHS on surprise medical bills, noting that the department is currently auditing how payment amounts determined by insurance companies were calculated and applied.

While the budget requests these proposals, it is still up to Congress to implement these requests and will need to go through the legislative budgeting process.

To read more, CLICK HERE.

To read the White House’s fact sheet, CLICK HERE.