Over Before It Started: CMS Abandons New Payment Pilot

By Zack Buck

With little fanfare, last month, the Centers for Medicare and Medicaid Services (CMS) abandoned its proposal to begin a payment pilot in which Medicare Part B would change the way it pays for pharmaceutical drugs.  As I blogged about last March, under the proposed pilot, providers’ payments would be changed from the Average Sales Price (ASP) plus 6 percent of drugs’ costs (ASP+6), to ASP plus 2.5 percent of the drugs’ costs plus a flat fee per drug per day (of $16.80). This new proposed pilot would have been time-limited, and would have allowed officials to observe the effects of such a reimbursement change on prescribing patterns in an effort to cut Medicare’s substantial drug costs.

Following an outburst of negative reaction from Medicare’s providers, the pharmaceutical industry, and Congress (including the new nominee to be Secretary of Health and Human Services Tom Price), CMS announced in December that more than 1300 public comments were submitted in reaction to the proposal.  And following November’s election and the public comments shared with CMS, the agency announced that it had decided that “the complexity of the issues and the limited time available led to the decision not to finalize the rule at this time.”

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Final Common Rule Revisions Just Published

By Holly Fernandez Lynch

This morning, the Federal Register posted for public inspection the final rule revising the Federal Policy for the Protection of Human Subjects (AKA “The Common Rule”).  This has been a long, long road, beginning with an ANPRM in 2011 and a massive NPRM in 2015.  The agencies clearly wanted to slide this in before the administration change on Friday, but substantial uncertainty remains.

I’ve copied the preamble’s articulation of key changes – and key proposals that have been dropped – below the fold.  But I want to briefly address the “what now?” question.  The incoming Trump administration will have its hands full with ACA “repeal and something,” so it’s hard to imagine this regulatory change will be high on the priority list, especially with some of the most worrisome proposals having been nixed already.  But the Congressional Review Act provides Congress a streamlined process to eliminate new agency rules.  Under the Act, agencies must notify Congress of new regulations, triggering a 60 legislative day review period in which Congress can pass a resolution of disapproval for presidential signature (or veto).  So that’s a possibility here.

In addition, two bills have passed the House that could impact these regulations.  First, the Midnight Rules Relief Act would amend the Congressional Review Act to allow Congress to disapprove multiple rules at once.  In other words, Congress could pass a resolution of disapproval of ALL regulations that had been recently passed to get rid of them all in one fell swoop without individual consideration.  Second, the REINS (Regulations from the Executive in Need of Scrutiny) Act, if passed, would require that “major” rules get a joint resolution of Congressional approval within 70 session days to take effect – “major” is defined as having an annual impact of $100M or more, a major increase in costs, or significant adverse effects on innovation.

Point being, don’t get too comfortable with the new rule just yet.  Key changes – and things that are staying the same – are listed below (from the Fed. Reg. notice).  And I’ll be presenting on these matters at Petrie-Flom’s upcoming conference, Health Law Year in P/Review, on Monday 1/23/17.

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