September 7, 2018 House E&C Health Subcommittee hearing on opportunities to improve health care On September 5, the Energy and Commerce Subcommittee on Health held a hearing entitled "Opportunities to Improve Health Care," which featured stakeholder testimony on five bipartisan bills currently under consideration by the committee. The bills discussed include: H.R. 3325, the Advancing Care for Exceptional (ACE) Kids Act, to improve the delivery of care for children with complex medical conditions who receive care under Medicaid by providing enhanced federal matching for a limited period of time for care coordination services; H.R. 5306, the Ensuring Medicaid Provides Opportunities for Widespread Equity, Resources (EMPOWER) and Care Act, to extend the Money Follows the Person Demonstration (MFP) program in Medicaid for an additional five years and provide resources to state Medicaid programs to help transition individuals with chronic conditions and disabilities from institutions back into local communities; and, H.R. 3891, to amend title XIX of the Social Security Act to clarify the authority of State Medicaid fraud and abuse control units to investigate and prosecute cases of Medicaid patient abuse and neglect in any setting, and for other purposes, to clarify the authority of State Medicaid Fraud and Abuse Control Units (MFCUs) to investigate and prosecute abuse and neglect of Medicaid beneficiaries in non-institutional settings and broaden the permissible use of federal MFCU funds. Two discussion drafts were also discussed, one that would prohibit the use of so-called "gag clauses" in Medicare and private health insurance plans and another that would codify the Healthcare Fraud Prevention Partnership (HFPP) and expand the scope of allowable activities to address more in the spectrum of fraud and abuse in the health care system. Committee members and panelists expressed bipartisan support for the bills under consideration. The Subcommittee marked up the five pieces of legislation discussed on September 7, in additional to another discussion draft aimed at providing the Medicare Payment Advisory Commission with access to certain drug rebate information. For more information, visit the hearing and markup landing pages. Opening statements Subcommittee Chairman Michael Burgess (R-TX): "All of the bills and discussion drafts before us today aim to improve the access to and quality of health care for American patients and their families. First, I would like to commend Representative Buddy Carter of Georgia for his hard work on legislation to prohibit gag clauses in Medicare and private health insurance plans. Gag clauses prohibit pharmacists from informing patients that paying in cash will result in lower out-of-pocket costs than the insurer's cost-sharing arrangement, unless the patient directly asks. The draft bill being discussed today is essential in both lowering drug costs for individuals and in freeing pharmacists to do what many consider to be the right thing. It would ban employer and individual health insurance plans, in addition to Medicare Advantage and Medicare Part D Plans, from using gag clauses … H.R. 3891, introduced by Representatives Walberg and Welch will improve the authority of State Medicaid Fraud Control Units, which currently investigate provider fraud and patient abuse only in health care facilities and board and care facilities … Health Subcommittee Vice Chairman Guthrie and Representative Dingell have introduced the EMPOWER Care Act, which will extend the Money Follows the Person Demonstration for five additional years … The final Medicaid discussion draft, the ACE Kids Act, introduced by full committee Vice Chairman Barton and Representative Castor, has received substantial feedback from stakeholders and has been revised to reflect their input. The goal of this legislation is to improve comprehensive care for medically complex children through a state option to create a Medicaid health home specific to children." Full statement. Subcommittee Ranking Member Gene Green (D-TX): "The ACE Kids Act aims to improve the delivery of care for children with complex medical conditions served by Medicaid. It presents a great opportunity for us to implement better care delivery and payment models to support children and their families. The current discussion draft would establish a Medicaid health home state option specifically targeted for children with medically complex conditions and require the Department of Health and Human Services to issue guidance regarding best practices for using out-of-state providers for children with medically complex conditions … Under the current system, parents of kids with complex conditions struggle to coordinate the intricate, multi-state care of their children. We need this legislation to make this care more coordinated and seamless for families. This discussion draft is an important step forward … I support the other four bills and discussion drafts being considered today. Many of these bills, including H.R. 3891, which would expand the authority of state Medicaid Fraud Control Units to investigate and prosecute Medicaid fraud and abuse in non-institutional settings, and the discussion draft to codify the Health Fraud Prevention Partnership (HFPP), are commonsense changes to current law and should receive wide bipartisan support. I also support the discussion draft to prohibit the use of so-called "Gag Clauses" in Medicare and private health insurance plans that prohibit pharmacists from informing consumers that their prescription can be purchased for a lower price out-of-pocket. While I support the "gag clause" discussion draft, I hope that the committee while consider a deeper examination on the rising costs of prescription drugs and consider what Congress can do to help seniors struggling to afford their medication." Full statement. Witness testimony Mr. Hugh Chancy, Member, Board of Directors, National Community Pharmacist's Association: "The expression 'gag clauses' is a misnomer because what is most often being referred to are multiple contract provisions or requirements embedded in lengthy PBM provider manuals that include overly broad confidentiality requirements and non-disparagement clauses, as well as requirements that pharmacies charge insured patients what the PBM says at point of sale. Some PBMs have even included provisions that can be interpreted as prohibiting communication with news media, policy makers, and elected officials … .Ultimately, these provisions have the effect of chilling a range of pharmacist communications with patients for fear of retaliation by the PBM. For this reason, the gag clause issue goes well beyond drug pricing disclosures. Further, community pharmacies like mine have very little negotiating power to strip these provisions out of our contracts … As a solution to this problem, community pharmacies need a place to point to in the law that will allow for the free flow of information between them and their patients. NCPA strongly supports the Discussion Draft that is the focus of this hearing. The Draft is legislation to prohibit 'gag clauses' in Medicare and private insurance by banning health plans from restricting a pharmacy's ability to inform a customer about the lower cost, out-of-pocket price for their prescription." Full testimony. Mr. Curtis Cunningham, Vice President, National Association of States United for Aging and Disabilities: "The MFP program, as it is frequently called, was first created by the Deficit Reduction Act of 2005 as a way to provide states with increased resources and flexibilities that assist with the transition of individuals from institutional long-term care settings to home and community-based services. The creation of MFP gave states crucial tools to increase choices and options for individuals who receive long-term services and supports in accordance with the landmark Olmstead decision that mandates states to ensure that participants receive services in the most integrated setting based on their needs and preferences … According to the national MFP evaluation, average annual per person spending during the first year following transition declined by over $20,000 for older adults and people with disabilities, and by over $48,000 for individuals with intellectual/developmental disabilities … Our members across the country have seen great value from the program, and the interventions have become more effective as states have experimented with and learned from innovative ways to provide these supports. We encourage Congress to continue to work with NASUAD, our membership, and the broader aging and disability community to demonstrate the financial and human benefits of the program in order to secure an extension of the MFP program." Full testimony. Mr. Rick Merrill, President and CEO, Cook Children's Health Care System: "The ACE Kids Act is about fundamentally improving care for children with medical complexity in Medicaid, driving improvements in quality, and reducing program spending — all further strengthening the Medicaid program. The bill will do this by expanding access to patient-centered, pediatric-focused coordinated care models tailored to the unique needs of these children. To date, a number of children's hospitals, working with physicians and local communities, have supported pilot programs that coordinate care among and between the large numbers of providers necessary to care for a child with medical complexity. These programs have a track record of improving the quality of care for the children enrolled, increasing family satisfaction and reducing costs. However, the acceleration and spread of innovative care coordination cannot be achieved on a piecemeal basis. Creating the greatest benefit for the greatest number of children requires a national approach … The ACE Kids Act will fill this need by advancing elements of a national framework to drive the creation of systems of care coordination informed by shared data and quality standards. It will also provide state and local flexibility in tailoring care for this very complex population … The ACE Kids Act will enable the national improvement necessary to provide better care for children with medical complexity and reduce Medicaid spending. We ask lawmakers to prioritize kids' health by passing the ACE Kids Act this year." Full testimony. Mr. Matt Salo, Executive Director, National Association of Medicaid Directors: "As the Subcommittee considers statutory modifications to Medicaid, the core characteristics of flexibility for states to most appropriately administer their programs and federal investment in Medicaid's tools will ensure the program continues to provide high quality care to Medicaid beneficiaries and be a responsible steward of state and federal taxpayer dollars … It is important to note that when we speak about the medically complex child population, we are discussing a population that is not monolithic. Their needs are diverse, as any number of conditions can be categorized as medically complex. For this reason, states will continue to need flexibility from our federal partners to design and implement solutions that reflect the unique needs of the children covered in the state … A key objective of both states and CMS for the past several years has been to rebalance the provision of Medicaid LTSS from institutional settings towards the community … This work is challenging, resource-intensive, and requires sustained effort. Fortunately, states have received valuable support for their rebalancing efforts in the form of the Money Follows the Person (MFP) Demonstration grant program … Medicaid Directors strongly support a prompt reauthorization of MFP. This reauthorization should occur quickly enough to provide states with continuity for existing programs." Full testimony. The Honorable Derek Schmidt, Attorney General, State of Kansas: "H.R. 3891 would eliminate an outdated limitation in federal law, thereby expanding (at the option of individual states) the authority of Medicaid Fraud Control Units (MFCUs) to detect, investigate and prosecute Medicaid patient abuse in non-institutional settings. The National Association of Attorneys General, the nonpartisan association representing all 56 state, territory and District of Columbia attorneys general, supports H.R. 3891. I also support the legislation in my capacity as Attorney General for the State of Kansas … Today, unlike when the federal statute establishing MFCUs was enacted, far more care is delivered to patients, including Medicaid beneficiaries, through home and community-based services outside of health care facilities. And when we discover that a patient-beneficiary is being abused in that non-institutional setting, I can see no logical policy reason to be prohibited from using MFCU assets to appropriately pursue that abuse. H.R. 3891, if enacted, would take the blinders off the MFCUs and let them detect, investigate and prosecute Medicaid beneficiary-patient abuse where it may occur." Full testimony. Dr. David Yoder, Executive Director of Member Care and Benefits, Blue Cross Blue Shield Association's Federal Employee Plan: "Among various governmental efforts, the Federal government established the Healthcare Fraud Prevention Partnership (HFPP) to improve the detection and prevention of healthcare fraud. BCBSA and several of our member companies are active participants in the HFPP. We support the HFPP for bringing together a diverse population of fraud management, control, and enforcement parties to identify areas of potential risk posed by healthcare fraud and abuse. We support Congress' desire to establish explicit authority for HFPP and its activities, better equipping them to define the rules and responsibilities of its members and expand the scope of allowable activities to address more in the spectrum of fraud and abuse in our healthcare system … BCBSA supports legislation to ban gag clauses and any prohibitions on allowing pharmacists to make information about cost savings known to the beneficiary at the point-of-sale. To the extent that some in the industry include such clauses in their contract, consumers may be deprived of information that will help them make prudent decisions when paying for prescription drugs. With this is mind, we would also encourage pharmacists to advise patients on generic substitution and alternative medications so long as this is done in direct communication with the dispensing physician." Full testimony. Q&A H.R. 3325, the Advancing Care for Exceptional (ACE) Kids Act Many committee members voiced their support for the ACE Kids Act, including Rep. Joe Barton (R-TX), Rep. Gene Green (D-TX), Rep. Kathy Castor (D-FL), Rep. Leonard Lance (R-NJ), Rep. Jan Schakowsky (D-IL), Rep. Gus Bilikaris (R-FL), Rep. Markwayne Mullin (R-OK), and Rep. Michael Burgess (R-TX), who focused their questioning on Mr. Rick Merrill of Cook Children's Health Care System and Mr. Matt Salo, Executive Director of the National Association of Medicaid Directors. Both discussed the benefits of coordinated and tailored health care for children with complex medical needs, alleviating the burden on families and resulting in a better quality of life. When asked about the potential cost savings, Mr. Merrill said that while only 1-2% of Medicaid children would be eligible for the program, those children account for 40% of the costs. He noted a study that projects potential savings at $5-13 billion over 10 years and suggested the program would also result in improved clinical outcomes. Both Merrill and Salo also expressed the importance of program flexibility, which they say is contained in the current version of the bill, allowing states to design the program in a way that meets the delivery system in their state as well as the specific needs. They also discussed the importance of working across state lines in a way that limits long approval processes that can risk the health of these patients. Mr. Salo discussed the need to develop best practices and guidance to figure out how best to work across jurisdictions. H.R. 5306, the Ensuring Medicaid Provides Opportunities for Widespread Equity, Resources (EMPOWER) and Care Act Another bill with a lot of member support was the EMPOWER and Care Act, buoyed by Rep. Schakowsky and Rep. Burgess along with Rep. Robert Latta (D-OH), Rep. Doris Matsui (D-CA), Rep. Brett Guthrie (R-KY), Rep. Diana DeGette (D-CO), Rep. John Sarbanes (D-MD), and Rep. Debbie Dingell (D-MI). Questions were directed at Mr. Salo as well as Mr. Curtis Cunningham, Vice President of the National Association of State United for Aging and Disabilities. Both expressed their support for an extension of the MFP program and spoke to how the program can reduce costs and increase quality of life for seniors through support of innovative and robust home and community-based services that allow people to transition away from institutionalized care. They also stressed that funding certainty is necessary to ensure that innovative practices are put in place and adequately rolled-out and assessed. When asked by Rep. Guthrie if they would take a one-year extension, Mr. Salo said that it would be better than letting the program die, but it is not how state government works and would be extremely disruptive. Mr. Cunningham discussed how it allowed them to move people seeking to transition to home or community-based care off the waitlist and to create support services such as a list of resources for housing, which continues to be an issue for the population, along with resources such as community living specialists that help those wishing to relocate into the community about their options. He also discussed how it bridges the gap between services that may not be covered through Medicaid. When specifically asked about savings by Rep. DeGette, Mr. Cunningham said that they have savings of $2,000 per member per year. Mr. Salo also stressed to the committee that this country does not have a long-term care system and said that in order to receive the care, you have to go onto Medicaid and impoverish yourself, asking them if we should consider other ways of providing these services. He stressed that the program should be about empowering people to make meaningful life decisions for themselves. H.R. 3891, to amend title XIX of the Social Security Act to clarify the authority of State Medicaid fraud and abuse control units to investigate and prosecute cases of Medicaid patient abuse and neglect in any setting, and for other purposes Rep. Lance and Rep. Burgess, along with Rep. Tim Walberg (R-MI), Rep. Peter Welch (D-VT), and Rep. Morgan Griffith (R-VA), all voiced support for H.R. 3891, focusing their questioning on the Honorable Derek Schmidt, Attorney General of Kansas. They asked about the tools necessary to address and prevent fraud and abuse in Medicaid. Mr. Schmidt said there are special units focused on investigating these abuses, but they are currently stretched too thin and sometimes have to rely on general tools for criminal investigation. He added that in areas where they are unable to investigate, namely in non-institutional settings, they must rely on law enforcement agencies more broadly. When asked by Rep. Welch about Vermont's efforts to address Medicaid fraud, Mr. Schmidt said it is especially important in rural areas to deploy resources in areas that are lacking, as most are self-funded like in Kansas (from fraud recovery finances). Rep. Walberg noted that Medicaid fraud resulted in $1.8 billion in recovered funds and 2,500 convictions nationwide, suggesting that the number could be far greater if they expand capacity and authority. Rep. Burgess also asked about dangers in sober homes, and Mr. Schmidt said they are looking at potential diversion cases but the bigger concern is inability to prosecute in certain settings. H.R. __, a discussion draft to codify the Healthcare Fraud Prevention Partnership (HFPP) Rep. Greg Walden (R-OR) asked about the HFPP and if there are exiting limitations on information sharing. Dr. David Yoder, Executive Director of Member Care and Benefits at Blue Cross Blue Shield Association's Federal Employee Plan, noted that HIPAA requirements require the HFPP to go through a third party to de-identify the data when looking at instances of fraud, which he called "unhelpful." He suggested strengthening the committee charter to ensure information sharing is not a HIPAA violation. When asked about the prohibition from advising the federal government and potential partnership reports to Congress, Dr. Yoder said he didn't have an opinion. Rep. Walden stressed he thinks a report to Congress would be helpful and asked Dr. Yoder to reevaluate. H.R. __, a discussion draft to prohibit the use of so-called "gag clauses" in Medicare and private health insurance plans Reps. Matsui, DeGette, Schakowsky, Walden, Griffith, Welch, along with Rep. Buddy Carter (R-GA) expressed their support for the discussion draft to prohibit the use of "gag clauses," focusing questions on Mr. Hugh Chancy from the National Community Pharmacists' Association. Mr. Chancy discussed how gag clauses harm the patient-pharmacist relationship, which is based on trust, as they are unable to provide patients the information they need. He also explained, after prompted by Rep. Griffith, how it can disproportionately impact rural areas that are often beholden to one PBM for a large part of their business. Several members asked about potential issues paying for prescriptions with cash instead of through insurance, such as the impact on deductibles and information on drug interactions. Mr. Yoder explained these transactions do not count toward the deductible nor does it go through other mediation processes such as drug interactions, as it is not processed by insurance. Rep. Carter, however, dismissed that as being a big concern and Mr. Chancy said that they do look at potential interactions in the system. Rep. DeGette also expressed the need for the committee to look into the entire realm of drug pricing. ———————————————
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