Life Science Compliance Update

September 29, 2017

Senate Passes CHRONIC Care Act


On September 26, the Senate passed the CHRONIC Care Act is also known as the “Creating High-Quality Results and Outcomes Necessary to Improve Chronic Care Act.” The law passed with bipartisan support. “This legislation will improve disease management, lower Medicare costs and streamline care coordination services — all without adding to the deficit,” Senate Finance Committee Chairman Orrin Hatch (R-Utah) said in a statement.

Bill Specifics

There are several highlights from the bill. First, it extends the Independence at Home Model of Care. Specifically, it would extend the demonstration’s expiration date by two years—until September 30, 2019, increase the cap on the total number of participating beneficiaries from 10,000 to 15,000, and give practices three years to receive a shared savings payment. Currently practices are to be terminated if they do not receive such an incentive payment in two consecutive years.

Furthermore, the bill will expand supplemental benefits to meet the needs of chronically ill Medicare Advantage (MA) enrollees. This would allow an MA plan to offer a wider array of supplemental benefits to chronically ill enrollees beginning in 2020. These supplemental benefits would be required to have a reasonable expectation of improving or maintaining the health or overall function of the chronically-ill enrollee and would not be limited to primarily health related services. The section would allow an MA plan the flexibility to provide targeted supplemental benefits to specific chronically ill enrollees.


Telehealth advocates are especially supportive of this bill. It has language that would allow an MA plan to offer additional, clinically appropriate, telehealth benefits in its annual bid amount beyond the services that currently receive payment under Part B beginning in 2020. The Secretary would be required to solicit comments on what types of telehealth services offered as supplemental benefits should be considered to be additional telehealth benefits. The use of these technologies would not be a substitute for meeting network adequacy requirements, and the beneficiary would have the ability to decide whether or not to receive the service via telehealth.

Additionally, in a win for stroke patients, the legislation expands the ability of patients presenting with stroke symptoms to receive a timely consultation to determine the best course of treatment through telehealth, beginning in 2019. Specifically, it would eliminate the geographic restriction as to permit payment to a physician furnishing the telehealth consultation service in all areas of the country. The hospital at which the patient is present and the telehealth consultation is initiated would not receive a separate, originating site payment.

Other areas

The bill directs the Government Accountability Office (GAO) to submit a report to Congress within eighteen months of the date of enactment to inform the development of a payment code describing the formulation of a comprehensive plan of longitudinal care for a Medicare beneficiary diagnosed with a serious or life- threatening illness. Specifically, GAO would identify the extent to which such a comprehensive longitudinal care planning service is provided to beneficiaries, whether there would be any duplication in payment for such service with billing codes for which Medicare current pays, and barriers to hospitals, skilled nursing facilities, hospice programs, home health agencies, and other providers working with a Medicare beneficiary to engage in the care planning process.

It would also identify any barriers to providers accessing the care plan and options for promoting adherence to it. In addition, GAO would also assess the need to develop quality metrics related to care planning, the characteristics of Medicare beneficiaries who would be most appropriate to receive a longitudinal planning services, and the providers best suited to furnish the service as a part of a multi-disciplinary team.

The GAO is additionally directed to submit a report to Congress providing information on the prevalence and effectiveness of Medicare and other payer medication synchronization programs. Specifically, GAO would identify common characteristics of programs and assess their impact on medication adherence, patient outcomes, and patient satisfaction. GAO would also assess the extent to which Medicare rules support medication synchronization and whether there are barriers to such programs in Medicare.

Finally, GAO is further asked to submit a report on the impact of the use of obesity drugs on patient health and spending. Specifically, GAO would look at obesity drug utilization in Medicare and other payer programs, identify physician prescribing attitudes, assess drug adherence, and maintain weight loss. GAO would also identify the impact of obesity drugs on patient health outcomes, on other services furnished, and health spending.

September 15, 2017

HELP Committee Holds Hearing on Individual Health Insurance Market


The Senate Health, Education, Labor and Pensions (HELP) Committee recently held the first hearing of several about ways to stabilize premiums and help individuals in the individual insurance market. The Committee heard from five different state insurance commissioners regarding their experiences with the individual insurance marketplaces under the Affordable Care Act (ACA). Most of the testimony focused on the need to fund cost-sharing reduction (CSR) payments, increase flexibility under the ACA’s section 1332 waiver program and establish a federal reinsurance program. There was bipartisan interest in stabilizing the individual market.

Chairman Lamar Alexander reported that there are eighteen million people with coverage through the individual market. He noted that thirty-one Senators not on the HELP Committee attended a morning coffee with today’s witnesses and applauded the wide interest in stabilizing the individual market. He said there has been a “partisan stalemate for seven years” and that action needs to be taken sooner rather than later, with final rate determinations due September 20th and Qualified Health Plan contracts for 2018 due September 27th. He also warned that insurer exits could occur prior to the contract finalization deadline and that half of counties nationwide have only one insurer participating on the Exchange.

Ranking Member Patty Murray was slightly more political, stating the Administration is “trying to create Trumpcare by sabotage,” cutting ACA outreach, and creating uncertainty about cost-sharing subsidies. She said it is important to reach a “multi-year solution” because plans develop rates over many months. She said, however, note that she believes that “agreement is possible,” while also noting the importance of preserving guardrails present in the ACA.

Julie Mix McPeak, the Commissioner of the Tennessee Department of Commerce and Insurance, noted that while the individual insurance market in Tennessee has not collapsed, the market should not be considered stable and that insurers have been “fleeing the market” because of uncertainty about rising costs. Most individuals in the state only have one plan to choose from, compared to last year, when at least two carriers offered policies in all counties. She stated that premiums have skyrocketed while choices have diminished and that the current situation is not sustainable.

McPeak stated that funding of CSRs is the single most critical issue and that such funding is not an insurer bailout, while also noting the importance of reinsurance and the cost of care, stating that there is no transparency in the pharmaceutical industry. She highlighted the fact that insurer rates are directly related to underlying health care costs.

Mike Kreidler, the Washington State Insurance Commissioner, stated that roughly 330,000 individuals purchase coverage through the individual state-based marketplace. He also noted that Washington embraced the ACA from the beginning and the uninsurance rate has dropped from fifteen percent to less than six percent. He stated that insurers in the state need certainty and that “progress forward is threatened by uncertainty around the fate of the ACA.” Mr. Kreidler asked Congress to address the market uncertainties by permanently funding CSR payments and enacting a federal reinsurance program for a minimum of three years. He also asked for federal investments in outreach and enrollment marketing to maximize the number of people enrolled in the market, especially the young and healthy, and to continue the “guardrails” in the section 1332 waiver process.

Lori Wing-Heier, Director of the Alaska Division of Insurance, testified to the health care challenges in Alaska, including its large size, rural population and insufficient provider competition. She stated that while the individual mandate reduced the number of uninsured residents in the state, it also had the unintended consequence of raising insurance premiums, resulting in a volatile market. She believes that congressional action is necessary in the individual market. Wing-Heier gave the example of the Section 1332 waiver that they did in Alaska and asked Congress to focus on stabilization of the health insurance markets. She asked for funding of CSR payments through at least 2019. Ste also stated that programs that allow states to address the unique needs of their residents are crucial to long-term stability of the health insurance markets.

Theresa Miller, the Insurance Commissioner of Pennsylvania, noted that while the ACA is not perfect, the narrative that it is failing and imploding is false. She stated that the ACA has worked well in Pennsylvania, where the uninsured rate has dropped to 6.4 percent. Commissioner Miller stated that for 2018, the insurers in the individual market filed for an average increase of 8.8 percent, assuming no changes come from the federal government. She noted that if CSR payments are not made, insurers estimate an average increase of 20.4 percent and if the individual mandate is not enforced, insurers would seek an estimated 23.3 percent increase. She stated that CSR uncertainty has a significant impact on rates and drives up costs for all consumers. Commissioner Miller asked Congress to allocate CSR funding through at least 2019.

John Doak, Commissioner of the Oklahoma Department of Insurance stated that small business owners and self-employed individuals are suffering with the insurance premium spikes. In addition, carriers are narrowing their networks. Doak stated that he is encouraged by the Trump Administration’s priorities for state flexibility and that Oklahoma has submitted a section 1332 waiver. He asserted his belief, however, that waivers are not the solution to the problems from the ACA and that powers must be returned back to states.

August 30, 2017

After a Quiet Summer, Congress Starts Probe into MS Drugs


Congress has recently taken a few months off from constantly barraging the pharmaceutical industry with daily probes and negative news. However, on Thursday, August 17, 2017, Representatives Elijah Cummings of Maryland and Peter Welch of Vermont announced a probe into multiple sclerosis (MS) drug costs, focusing on pricing from seven different pharmaceutical companies, starting with letters to those companies.

Cummings and Welch are asking Bayer, Biogen, Serono (Merck KGaA), Novartis, Sanofi, Teva, and Roche for details about their pricing, focusing on the reasons behind price increases over the past several years. Teva leads the pack with price increase – Copaxone 20mg increased over 1000% from 1996 through 2017. Compare that to Biogen’s Avonex (also approved in 1996), which increased by 691% during that same period.

The average annual cost of MS therapy rose to $78,000 in 2016 from $16,000 in 2004, according to the National Multiple Sclerosis Society.

A table created by FiercePharma shows the top fifteen MS drugs and their costs, along with the years the drugs were approved in and the percentage increase since the year of approval, can be seen below.


A joint press release issued by the representatives states,

We are launching an in-depth investigation to determine why drug companies are dramatically increasing their prices for drugs used to treat Multiple Sclerosis (MS), which is a disease of the central nervous system that often has devastating and disabling effects on patients. We believe no American should be forced to struggle to afford lifesaving medical treatments, especially when drug companies increase prices without warning, cause, or justification.

In the letters, Cummings and Welch cited an American Academy of Neurology Study that found some drug companies seem to be increasing their prices and setting new, higher prices in tandem with their competitors.

The letters requested information to evaluate the substantial price increases of MS drugs, including information about corporate profits and expenses and documents concerning pricing strategies, patient assistance programs, and drug distribution systems. They requested the information be provided by August 31, 2017.

Representatives for Biogen, Novartis, Merck KGaA and Teva said the companies are reviewing the letters. A Bayer spokesperson said the company plans to respond directly. A Roche spokesperson said the company "will work with the Congressmen to address their request and questions."

This is the latest investigation into high drug prices in Congress. Some investigations have led to legislation to clamp down on high drug prices. For instance, Congress recently passed legislation that lets the FDA boost competition for off-patent drugs that see high price hikes.

Please see the following links for the letters to Bayer, Biogen, Serono, Novartis, Sanofi, Teva, and Roche.


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