Health Policy Report – December 12, 2023

The US Oncology Network PAC Hosts New York Oncology Hematology for a Breakfast with Rep. Paul Tonko in Albany

On Friday, December 8, The US Oncology Network PAC hosted New York Oncology Hematology (NYOH) for a one-hour breakfast fundraiser supporting local representative Congressman Paul Tonko (NY-20) in Albany, New York.

During the one-hour event, NYOH was able to thank Rep. Tonko for his prior support of radiation oncology and discuss current legislative issues important to the practice and The Network. Topics focused on the Medicare physician fee schedule cuts, the Radiation Oncology Case Rate Program (ROCR), site neutral payment reform, and the inability of medically integrated dispensing (MID) home delivery of prescriptions to patients.

Congressman Tonko is a senior member on the House Committee on Energy & Commerce serving his eighth term and serves as the Ranking Member of the Subcommittee on Environment, Manufacturing, & Critical Materials.  The Network and NYOH look forward to continue working with Congressman Tonko as we look to address several of our legislative priorities.

To urge your Member of Congress to sign a letter urging Congressional action to mitigate the cuts to the Physician Fee Schedule, CLICK HERE.

House Passes the Lower Costs, More Transparency Act Following Alliance Letter on Site Neutral Payment

On Monday, December 11, the House of Representatives passed H.R. 5378, the Lower Costs, More Transparency Act, a comprehensive health care package requiring hospitals and pharmacy benefit managers (PBMs) to meet transparency standards.

The vote follows a recent letter sent by the Alliance for Site Neutral Payment Reform to House Speaker Mike Johnson (R-LA), Minority Leader Hakeem Jeffries (D-NY), Majority Leader Steve Scalise (R-LA), and Minority Whip Katherine Clark (D-MA) expressing strong support for Section 203 of the legislation, which requires site neutral payments for drug administration in off-campus hospital outpatient departments (HOPDs).

The Congressional Budget Office (CBO) has estimated that this provision will save $3.8 billion over 10 years and has projected Hospital Outpatient Prospective Payment System (OPPS) payments would grow by over 100% over the next decade. Whereby comparison, physician payments are expected to grow by only 20%.

The Alliance also noted its strong support for eliminating the grandfathering provisions under the Bipartisan Budget Act of 2015 and extending site neutral payments for all clinically appropriate services at off-campus HOPDs.

“We strongly encourage you and your colleagues in Congress to embrace commonsense changes to our healthcare delivery system that will directly lower out-of-pocket costs for patients, provide savings and stability for the Medicare program and promote transparency in the healthcare marketplace,” the Alliance concluded.

Meanwhile, the American Hospital Association and American Society of Health-System Pharmacists have pressed Congress to exclude site-neutral pay reforms from a year-end package. “We urge you to oppose any policies that fail to take into account the costs of safely providing medication administration services to the complex patients hospitals serve,” in a letter to House and Senate leadership.

However, the House passed the Lower Costs, More Transparency Act in a bipartisan vote of 320-71. The final bill contained minor tweaks to PBM measures, but the site neutral provisions in Section 203 remained unchanged. The bill also includes price transparency provisions, requires providers and PBMs to publicly list prices, bans spread pricing in Medicaid managed plans, and calls for the elimination of $16 billion in disproportionate share hospital (DSH) hospital payments through 2025.

In a statement, the Alliance for Site Neutral Payment Reform applauded the action and urged the Senate to take up this policy. Though this strong bipartisan vote puts the House in a better position to negotiate with the Senate on a health package in January, it remains unclear whether the Senate will further consider this legislation.  

To read the Alliance’s letter to House lawmakers, CLICK HERE.

To read AHA and AHSP’s letter to Congress, CLICK HERE.

To read more about the House vote, CLICK HERE.

To read the Alliance’s statement on the passage of the Lower Costs, More Transparency Act, CLICK HERE.

The Network Submits Comments on the FDA’s Proposed Rule on Laboratory Developed Tests (LDTs)

The Network recently submitted comments on the Food and Drug Administration’s (FDA) proposed rule that would make laboratory developed tests (LDTs) subject to regulation. In its letter, The Network outlined its concerns that, as currently drafted, the rule would reduce patient access to critical diagnostic testing and lead to consolidation of physician-owned labs.

“The Network is concerned that this proposed rule would effectively require all laboratories to redevelop and revalidate many existing tests and then resubmit them for FDA review. This would require significant time and resources with the potential for severe consequences,” the letter read.

The Network explained that this administrative burden could result in innovative products being delayed or pulled off the market, increased costs to patients and the health care system, and weakened financial viability for physician-owned labs, leading to consolidation. The Network expressed its support for the grandfathering of existing tests, should the rule be finalized, but called on the FDA to maintain the current regulatory structure.

In a statement, House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA) echoed this sentiment, urging the FDA to rescind the rule to avoid stifling innovation.

To read the proposed rule, CLICK HERE.

To read The Network’s comments, CLICK HERE.

To read a statement from Chairwoman McMorris Rodgers, CLICK HERE.

House Lawmakers Introduce New Bill to Cancel 2024 Physician Payment Cut

A group of bipartisan lawmakers, led by Rep. Greg Murphy, MD (R-NC), recently introduced H.R. 6683, the Preserving Seniors’ Access to Physicians Act of 2023, which would mitigate the 3.37% physician payment cut finalized by the Biden administration last month. The bill has been referred to the House Committee on Energy & Commerce, as well as the House Committee on Ways & Means.

This is the fourth consecutive year physicians are facing a cut to reimbursement amid growing medical inflation, staff shortages, and other practice pressures. “This bill takes action on a critical issue others refuse to do – pays physicians, who serve Medicare patients out of the goodness of their hearts, because Medicare payments simply don’t pay for the cost of care,” said Rep. Murphy.

In a statement, Jesse Ehrenfeld, MD, President of the American Medical Association, welcomed the bill’s introduction. “As of today, patients and physicians have a clear-eyed view on how to protect Medicare from injurious cuts,” Ehrenfeld said. “These cuts threaten health care access for seniors as well as the viability of physician practices, including many in rural and underserved areas. Canceling the cut is a good New Year’s resolution.”

To read the bill, CLICK HERE.

To read more, CLICK HERE.

Biden Administration Issues Proposal on March-In Rights

On Thursday, December 7, the Biden administration announced a roadmap that will allow the government to use march-in authorities on drugs developed with taxpayer dollars.

March-in rights were established under a 1980 law, the Bayh-Dole Act, which allows the government to retain ownership of patented products developed with public funds. If a company does not make its patent available to the public on reasonable terms, the government can grant additional licenses to third parties.

While the administration does not plan to endorse widespread use of march-in rights, the Commerce Department plans to issue a framework identifying factors that federal agencies should weigh in determining whether to take march-in action against expensive drugs or other products that were created with federal assistance.

The Commerce Department will seek public feedback on the framework in a 60-day comment period, which is set to face sharp opposition from pharmaceutical companies.

In the past, the government has refused to use march-in rights, including in March, when the administration rejected petitions to use march-in authorities to seize the patent for Xtandi, a prostate cancer drug.

To read more, CLICK HERE.

To read a fact sheet from the Biden administration, CLICK HERE.

Biden Administration Seeks to Uphold Trump-Era Copay Accumulator Rule

On Tuesday, November 28, the Department of Health and Human Services (HHS) and Centers for Medicare & Medicaid Services (CMS) appealed a recent ruling by the United States Court of Appeals for the D.C. Circuit, which struck down a Trump-era regulation permitting health insurers to not count pharmaceutical companies’ copay assistance towards a patient’s deductible or out-of-pocket maximum.

Such assistance can lower out-of-pocket costs for patients, but some stakeholders are concerned that so-called copay accumulators provide an incentive for drugmakers to keep their list prices high. The Trump-era rule, which is now being backed by the Biden administration, would have allowed health insurance companies to continue the copay accumulator practice. In their appeal, HHS and CMS contended that it would not enforce the court’s ruling until after it develops a new regulation on this policy.

To read the court’s September ruling, CLICK HERE.

To read the Notice of Appeal, CLICK HERE.

As Biden Administration Seeks to Boost Domestic Drug Production, Senate Finance Holds Hearing on Prescription Drug Shortages

With the number of drugs in shortage at its highest point in over a decade, the Biden administration has announced a new plan to boost the production of essential pharmaceuticals. On Monday, November 27, President Biden announced that he’ll utilize the Defense Production Act, among other measures, to create more essential medicines at home and protect against future drug shortages. The Biden administration also appointed a new Supply Chain Resilience and Shortage Coordinator to address medical and food supply shortages.

Meanwhile, in a Senate Finance Committee hearing held on Tuesday, December 5, lawmakers took the first steps toward using Medicare payment policy to address the issue of drug shortages. Though the committee didn’t coalesce around a solution, several lawmakers from both parties mentioned a Medicare policy that would incentivize hospitals to buy from suppliers that focus on the strength and dependability of their supply chains.

“If we start rewarding reliability, manufacturers can maintain actually a higher price point because it’s rewarded, that reliability. Then there’s going to be an incentive that will follow,” said Dr. Marta E. Wosińska, an economist and senior fellow at the Brookings Institution.

To read a fact sheet from the Biden administration on domestic drug production, CLICK HERE.

To watch the Senate Finance Committee hearing, CLICK HERE.

To read more about the Senate Finance Committee hearing, CLICK HERE.

Energy and Commerce Holds Full Committee Markup on PBM, Home Infusion, PFS Legislation

On Tuesday, December 5, the House Energy and Commerce Committee held a full committee markup to consider 44 pieces of legislation, including pharmacy benefit manager (PBM) reform, home infusion access, and Physician Fee Schedule (PFS) updates.

The E&C Committee passed multiple pieces of PBM-related legislation, including H.R. 2880, The Protecting Patients Against PBM Abuses Act, which would limit PBM income, and H.R. 5385, The Medicare PBM Accountability Act, which would impose reporting requirements for PBMs.

The committee also advanced H.R. 6546, The Physician Fee Schedule Update and Improvements Act, which calls for an increase in Medicare reimbursement rates for physicians. However, the amended version of the bill that passed through the committee includes a 2.5% cut to the 2024 Medicare conversion factor – the same level that was passed by the Senate Finance Committee – rather than the 3% cut that was originally proposed. Rep. Mariannette Miller-Meeks (R-IA), the bill’s lead sponsor, noted her dismay with the change but that it “conforms with the Senate and I’m pragmatic and wanting to make sure this gets done.”

However, the path forward for these bills is unclear. Since they are similar to reforms passed by Senate Finance, they may be part of a broader bicameral health care deal.

For a list of full legislation discussed at the markup, CLICK HERE.

To ask your Member of Congress to prevent PFS cuts, CLICK HERE.

Nonprofit Hospitals Face Continued Scrutiny over Charity Care

On Monday, November 27, Modern Healthcare published a new report revealing that as nonprofit hospitals’ expenses rose during the COVID-19 pandemic, they provided proportionately less free or discounted care. According to the report, operating expenses for hospitals rose 20% whilst charity care decreased by 0.22%.

“Hospitals had to squeeze their charity care spending to maintain financial viability,” Ge Bai, an accounting and health policy professor at Johns Hopkins University, said of the report. Modern Healthcare also noted that expanded Medicaid coverage and the corresponding lack of need for discounted or free care could have been another contributing factor to the decline.

This report is the latest in several analyses that have shown that charity care spending relative to nonprofit health systems’ overall expenses has remained stagnant or dropped over the past decade. This trend has prompted scrutiny about whether these health systems are earning their tax-exempt status, resulting in calls from policymakers for standardized community benefit reporting, including charity care spending.

To read the Modern Healthcare report, CLICK HERE.