National Legislative Update for April 2018

April 30, 2018

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The Legislative Update is brought to us by Liz Powell, Esq., MPH, Founder of G2G. Liz is an attorney with 20 years government experience, including as Legislative Director on Capitol Hill. She leads a team of bipartisan professionals that has raised over $159M, run advocacy campaigns and shaped CMS reimbursement for clients.

Contributor-LPowell

OVERVIEW

With the Senate FY19 Appropriations submissions to committee deadlines hitting in recent weeks while the House FY19 Appropriations Committee hearings were starting at the same time, the process is off to a fast start. Committee Chairmen in both chambers are committed to moving bills to the floor for passage by the August recess. Also, the National Defense Authorization Act was marked up in committee at the subcommittee level this week and will move out of the full committee in May. G2G was on the Hill meeting with Members and staff on the Appropriations, Armed Services, House Energy & Commerce and Senate HELP Committees throughout the month to gain intel and push for requests and learned President Trump is proposing rescissions for the FY18 omnibus domestic spending. However, we were assured by a couple offices that NIH spending should not be on that list.

BUDGET AND APPROPRIATIONS

Hearings for FY19 appropriations continue and markups of legislation have already begun with draft bills made public for both the MILCON-VA and Legislative Branch bills this week. Of note, the Veterans piece includes a total of $194.5 billion in total funding for the VA, an increase of $9 billion above FY2018 levels, and a rejection of President Trump’s plan to privatize the VA. It provides $1.2 billion for the new VA electronic health record system to implement the contract creating an electronic record system for VA just like the one being developed for DOD and targets funding for key areas: $8.6 billion in mental health care services; $196 million in suicide prevention outreach activities; $589 million for TBI treatment; $7.4 billion in homeless veterans treatment, services, housing, and job training; and $387 million for opioid abuse prevention. Meanwhile, the Legislative Branch bill includes an increase in security spending with $456 million for the Capitol Police, which is an increase of $29.9 million over FY2018 and $642 million for the Architect’s Office, which is $31.5 million above FY2018. The accompanying reports for each bill where the language insertions are usually placed are not finalized and made public yet. Interestingly, the Senate appropriations hearing on the FY2019 HHS budget was postponed due to HHS Secretary Alex Azar contracting a hospital acquired infection (HAI), which is a priority for his department and which Congress and HHS together have worked to implement both carrots and sticks to significantly reduce.

HEALTH

Opioid Crisis

The Opioid Crisis Response Act of 2018 (S. 2680), made up of 40 proposals intended to fight the opioid crisis, was marked-up on April 24th. The bill is designed to target the opioid crisis from all angles, including legislation that will bring the FDA, NIH, CDC, the Health Resources and Service Administration, and the Substance Abuse and Mental Health Services Administration together. This legislation, led by the Senate Health, Education, Labor and Pensions (HELP) Committee over a series of seven hearings, has garnered bipartisan support. Meanwhile the House Energy & Commerce (E&C) Committee also marked up their version of an opioid response measure but with nearly 60 different bills and partisan rankling. Most of the bills take modest steps, such as creating pilot programs to expand drug addiction treatment services, establishing a loan repayment program for addiction treatment providers, and coordinating federal efforts to combat drug overdoses. The costly proposal would partially end a longtime restriction on federal Medicaid funds for inpatient drug treatment programs. Some of the bills would direct Medicare payment policies to encourage more doctors to write prescriptions and track their patients electronically with the goal of more easily finding those abusing medications. Some Democrats complained the process was rushed and lawmakers don’t understand the cost of many of the proposals for which no offsets were discussed.

The DEA, another key player in the fight to end the opioid crisis, will also face some key changes per Attorney General Jeff Sessions’ announcement of an upcoming proposal the administration is suggesting that would change the way the DEA sets opioid production limits. Sessions said, “If the DEA believes that a company’s opioids are being diverted for misuse, then they will reduce the amount of opioids that company can make.” The proposal would also allow the DEA to use data from other agencies, such as HHS, FDA, Medicare and Medicaid, CDC, and state public health departments to help inform such decisions.

Also, a group of 16 Democratic Senators, including Senator Sherrod Brown (D-OH), sent a letter to HHS Secretary Azar requesting that the price of naloxone be reduced in order to increase state health department accessibility to the life-saving drug.

Pill dumping is yet another issue within the opioid crisis that is being tackled in the House. The E&C Committee has held hearings and is now looking to opioid wholesalers to understand why millions of opioids are ending up in small towns across West Virginia, one of the hardest hit states by this epidemic. Members are calling upon some of the largest wholesalers, such as McKesson, Cardinal Health, and AmerisourceBergen to better understand how they can keep tabs on how pharmacies and doctors distribute their painkillers.

Rapid Response Fund

Ranking Member of the House Appropriations Labor, Health and Human Services Appropriations Subcommittee, Rep. Rosa DeLauro (D-CT) has proposed putting $5 billion into a public health emergency fund. This idea is based off of an emergency fund used by the Department of Defense for counterterrorism work and would act as a reserve fund for HHS to use to quickly deploy on diagnostics, vaccines, and personnel. During the 2016 Zika outbreak, partisan debate led to a 6-month lag in emergency funds being appropriated to addressing the outbreak. Chairman of the Committee, Rep. Tom Cole (R-OK) also agrees in the use of some sort of rapid response fund, and public health officials testifying before the committee all advocated for such a fund. Still, some lawmakers worry that the funds will not be used appropriately and insist there be a way to ensure the funds are only be used during declared public health emergencies to maintain strong accountability.

Medical Devices

The FDA recently released its medical device safety plan, which is a set of proposals intended to improve the federal government’s oversight of medical devices in an effort to encourage companies to move more quickly in response to reported problems with their products. These proposals range from more general plans, such as labeling changes or user training specifications, to requiring more training for surgeons who use high-risk devices. While some of these changes are under the jurisdiction of the FDA to implement as an agency, some may require authorization from Congress.

Drug Pricing

The White House Office of Management and Budget has begun its review of the HHS Strategy to Lower Drug Prices and Reduce Out-of-Pocket Costs, marking significant momentum in the drug pricing conversation that has been buzzing around the administration since the campaign. The notice comes from the HHS Office of the Secretary, not from CMS, and includes ideas to address rising drug costs. This comes weeks before the President has indicated will speak on his plans to address drug pricing. Some of the pricing policies that will be announced include changes to Medicare, Medicaid, the 340B drug pricing program that allows safety-net hospitals to get drug discounts, and the accelerated development of more affordable generic medications.

HHS Health Reform Chief

James Parker, former head of MDwise Inc, an Indiana Medicaid managed care organization, has been named by HHS Secretary Azar as the new head of health reform at HHS. Parker will serve as a senior adviser for health reform and director of the Office of Health Reform at HHS, where he will be tasked to lead the initiative to lower cost and increase availability of health insurance.

Health IT & MyHealtheData Initiative

At the annual Datapalooza conference, CMS Administrator Seems Verma and FDA Commissioner Scott Gottlieb made major announcements. CMS will make Medicare Advantage encounter data available with a preliminary version of 2015 Medicare Advantage encounter data and then a final version of the data by the end of the calendar year. The goal is to supplement what researchers already have about beneficiaries in the fee-for-service program, according to CMS. The proposed policies begin implementing core pieces of the government-wide MyHealthEData initiative through several steps to strengthen interoperability or the sharing of healthcare data between providers. Specifically, CMS is proposing to overhaul the Medicare and Medicaid Electronic Health Record Incentive Programs (also known as the “Meaningful Use” program) to: make the program more flexible and less burdensome, emphasize measures that require the exchange of health information between providers and patients, and incentivize providers to make it easier for patients to obtain their medical records electronically. To better reflect this new focus, CMS re-named the Meaningful Use program “Promoting Interoperability.” In addition, the proposed rule reiterates the requirement for providers to use the 2015 Edition of certified EHR technology in 2019 as part of demonstrating meaningful use to qualify for incentive payments and avoid reductions to Medicare payments. In addition, CMS is proposing other changes to reduce the number of hours providers spend on paperwork, which would result in the elimination of 25 total measures across the 5 programs with well over 2 million burden hours reduced for hospital providers impacted by the IPPS proposed rule, saving them $75 million.

In addition, FDA Commissioner Gottlieb announced new plans: (1) to update to the agency’s pre-certification model (in which pre-approved companies deemed to have effective development processes would get access to streamlined or waived pre-market reviews); (2) to allow the agency’s drug center to start considering how to regulate digital-drug combination products, a sticking point for many; and (3) to start figuring out how to incorporate digital submissions of data in clinical trials for drugs. The plan is to establish an efficient pathway for the review and approval of digital health tools. Cancer patients, for example, could monitor their side effects by using the cameras on their phones and facial recognition software to classify pain symptoms objectively and track cognitive performance, Gottlieb said. Gottlieb’s announcement builds on an existing agency framework for regulating mobile health technologies as they relate to medical devices, which exempts certain medical software from its device regulations and clarifies when a software upgrade warrants a new device application because it could impact the safety or efficacy of the product. Also, Gottlieb unveiled a new working model for its software pre-certification program, which allows companies to bypass the need for a premarket review for each iteration of a software product because they have already passed an initial quality assessment. Companies like Apple, Fitbit, Johnson & Johnson, and Roche are already participating in a pilot project. The FDA also released the last draft guidance under its digital health action plan, which addresses situations where some digital functions of a medical product are subject to FDA regulations, but others aren’t.

Autism

Today, the CDC revised the autism prevalence number significantly – stating about 1 in 59 children have autism spectrum disorder, an upward revision from a 2016 report that found 1 in 68 children have the condition. The CDC’s new report is based on a monitoring survey of 11 communities. “What this headline doesn’t tell you is that the CDC believes this is because more children of color are getting the autism diagnoses they deserve – which is good news,” author Steve Silberman tweeted. (Silberman wrote the award-winning NeuroTribes, an investigation into autism.)

DEFENSE

National Defense Authorization Act (NDAA)

The NDAA subcommittees marked up their drafts of their sections of the NDAA this week. The full committee is expected to review the bill on May 9. The Senate schedule is not yet public. So far, the House NDAA includes ways for the Department of Defense to work better with innovative small businesses, including simplified contracting and strengthening the SBIR program and improve the acquisition process. Also, the committee has indicated it would like a small business act specific to Defense to increase innovations brought to warfighters. Also, the subcommittees approved funding for research (RDTE) in the amounts of:  Army $10.159 billion, Navy $18.481 billion, Air Force $40.178 billion, and Defense-wide $22.016 billion. The Defense Health Program is provided $33.729 billion in funding, of which $32.145 billion is for Operation and Maintenance, $710.637 is for RDTE and $873.160 is for procurement. Some ideas being considered based on a report presented this week include:

  • Increasing the Defense SBIR allocation to 7 percent;
  • Increasing Defense Phase I awards to $500,000 and Phase II awards to $1.5 million;
  • Apply simplified acquisition procedures for SBIR;
  • Allow Defense to issue awards outside of SBA’s master release schedule;
  • Allow Defense Phase II awards without a Phase I prerequisite;
  • Allow first-time small businesses to receive more than two Phase II awards;
  • Facilitate SBIR and STTR technologies to enter Phase III and receive Rapid Innovation Fund (RIF) awards;
  • Increase the RIF to $750 million;
  • Eliminate the cap on RIF awards;
  • Establish a “Nontraditional Technology Partner Initiative” to pay “cash or noncash awards” to Defense civilians and personnel that develop new technology, contractors that identify partners, and consortia that assist partners in winning first-time defense contracts;
  • Create a “Defense Innovation Center Program” to establish open innovation centers that will connect innovative small businesses to Defense projects. These centers should have the ability to award grants and host challenges.

Defense R&D Priorities

Mike Griffin is the new Under Secretary of Defense for Research and Engineering and he spent the past week informing Congress that the U.S. must stop being so risk-adverse, embrace prototyping to accelerate innovation, and should prioritize hypersonic weapons capabilities. His top priority is transitioning hypersonic missiles and directed energy weapons from R&D to deployment. He testified alongside former Google CEO Eric Schmidt (who is Chair of the Defense Innovation Board and championed artificial intelligence in his testimony) at a House hearing on “Promoting DOD’s Culture of Innovation” and appeared as the only witness at a Senate hearing the next day on “Accelerating New Technologies to Meet Emerging Threats.” Both Griffin and Schmidt argued that DoD must overhaul its processes for acquiring new technologies to permit greater experimentation before setting capability requirements.

Technology

Despite government-wide trends of increasing cybersecurity efforts and the Pentagon’s recent acquisition of a commercial cloud system, the DoD will not be increasing their IT spending, according to the FY19 budget. Their FY19 IT and cybersecurity budget has allocated $45 billion for each fiscal year over the next 5 years, remaining relatively flat and opting not to ramp up its spending. The FY19 request is for $46.4 billion, with $36.4 billion for unclassified IT, $10 billion for classified, and $8.6 billion for cyberspace activities. By FY2023, total IT spending would fall to $44.2 billion, as DOD expects classified IT spending to increase to $10.2 billion, unclassified spending to drop to $34 billion, and cyberspace activity spending to hit $8.9 billion.

SCIENCE AND TECHNOLOGY

NASA Chief Confirmed

Former Representative Jim Bridenstine (R-OK) has been confirmed to head NASA through a narrow vote in the Senate. NASA chiefs have traditionally never been the topic of contentious debate during confirmation hearings, but Birdenstine’s more conservative views on climate change and his professional background as a politician led many Senators to question his ability to serve as the head of NASA. Beyond its famous space program, NASA also oversees satellite measurements directly related to tracking trends in climate change like clouds, ice sheets and carbon dioxide in the atmosphere. Bridenstine served as chairman of the House Science, Space and Technology environment subcommittee over the last two years, where, on multiple occasions, he asserted that climate change was not caused by human activity. He is also a former executive director of the Tulsa Air and Space Museum & Planetarium and was a Naval Aviator in both the active duty Navy and Naval Reserve, and most recently, transferred his Reserve commission to join the Oklahoma Air National Guard.

DARPA Space Challenge

DARPA is slated to host the DARPA Launch Challenge in late 2019. DARPA focuses on emerging disruptive technologies that make significant leaps in scientific discovery across many fields, from biology to cybersecurity to weapons systems to vehicles. DARPA announced recently that it will be awarding $10 million to the first team that can launch into space with “extremely short notice.” Once initiated, the competition will require teams to launch into low-Earth orbit on short notice then “successfully launch from a second site days later.”

NSF

NSF leaders presented their plan to invest $342.5 million of NSF’s funding toward “10 Big Ideas” in front of the House Science Committee, despite seeing no increase in funding in the President’s FY19 budget. Warning of the fear that China will surpass the U.S. as the world’s S&T leader, the NSF has set 10 research priorities that are examples of cross-disciplinary goals that would take some resources away from the agency’s core disciplinary research. The six research-focused Big Ideas would each receive $30 million through the research directorates, although the funding will be overseen by multi-directorate teams. Two of the six would also each receive an additional $30 million through new “convergence accelerators.” The four process-focused ideas would receive varying amounts: $60 million for Mid-scale Research Infrastructure; $20 million for INCLUDES, an initiative to broaden participation in STEM; $16 million for Growing Convergence Research, which would incubate future Big Ideas; and $6.5 million for the 2026 Fund, which would support ideas that “originate outside of any particular NSF directorate.” Head of NSF, Córdova noted during the hearing that NSF has to turn away $4 billion worth of highly rated proposals each year. Excluding stimulus funding provided by the 2009 American Recovery and Reinvestment Act, NSF’s budget has been largely flat in constant dollars over the past decade.

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