December 7, 2016

Congress Passes 21st Century Cures Act With Significant Support

Congressman Fred Upton (R-MI) has made The 21^st Century Cures Act a cornerstone of his chairmanship of the House Energy and Commerce Committee. The more than 1,000 page, bipartisan bill overwhelmingly passed both the House (392-26) and the Senate (94-5) and brings some major changes to the healthcare research landscape. The goal of the bill is to expedite the discovery, development, and delivery of new treatments and cures and maintain America’s global status as the leader in biomedical innovation. While a handful of senators such as Senator Elizabeth Warren (D-MA) opposed the bill, arguing that the legislation weakens FDA oversight and benefits the drug industry, it wasn’t enough to stop passage. Despite other concerns regarding provisions related to communication with payers and concerns about adequate FDA funding, the bill has received the support of the White House and is expected to be signed into law by President Obama.

The legislation also served as an end of the year policy omnibus bill with several other bipartisan healthcare initiatives added to it including the final version of the mental health legislation championed by Congressman Tim Murphy (R-PA) as well as provisions for the Biomedical Advanced Research and Development Authority (BARDA) outlined in a bill sponsored by Congresswomen Brooks (R-IN) and Eshoo (D-CA).The Cures bill calls for $4.77 billion in new funding for NIH over 10 years, including the Cancer Moonshot, Precision Medicine and BRAIN initiatives. It also would provide $1 billion over two years to combat the opioid epidemic. These funding authorizations must ultimately be granted through the appropriations process, however, the Continuing Resolution being considered in Congress fully funds the first year of Cures.

In addition to the research and development incentives for NIH and other agencies, there are several provisions important to the supply chain industry and our provider partners.

Durable Medical Equipment (DME) and Competitive Bidding:

• Retroactively rolls back pay cuts to rural suppliers that were implemented in July of 2016. These cuts are scheduled to go back into effect January 1, 2017. Some stakeholders have noted this could give the incoming administration an opportunity to make changes to DME pay. Congressman Tom Price (R-GA), the recent nominee to lead the Department of Health and Human Services, has been the lead on past legislation aiming to delay the second round of DME cuts to rural areas.
• Directs HHS to study the impact the competitive bidding program has on the number of suppliers and the availability of products.
• Requires HHS to reissue pay rules for DME in 2019 with adjustments to the non-bid fee schedule in some areas based on costs, volume of DME, and the number of suppliers.
• Limits federal Medicaid pay for DME to Medicare competitive bid rates starting in 2018. This policy was originally set to go into effect in 2019.

Medical Devices:

• Builds on FDA’s current programs to allow a quicker path for breakthrough medical technologies for patients with life-threatening or irreversibly debilitating diseases or conditions, and limited alternatives by streamlining regulations and providing clarity and consistency for innovators.

Hospitals

• Changes site-neutral policies for facilities under construction (defined as a provider that had a binding written agreement with an outside, unrelated, party for construction) and excludes prospective payment system-exempt cancer hospitals from the site-neutral payment policies.
• Extends the Rural Community Hospital Demonstration Program for five years, and keeps CMS from enforcing the “25% rule” for long-term care hospitals (LTCH) through October 1, 2017.
• Prevents enforcement of supervision requirements on critical access hospitals in 2016.
• Exempts physicians who work mostly at ambulatory surgical centers from meaningful use and Merit-Based Incentive Payment System penalties. The exclusion will end three years after HHS determines that electronic healthcare records are available for use in ambulatory surgical centers.
• Allows Long-term Care Hospitals that were in the middle of building when the current moratorium on LTCH expansion went into place to be exempt from the bed expansion moratorium. The exemption is paid for by a reduction to LTCH outlier payments.

Pandemic Preparedness

• Requires timely and accurate recommended utilization guidelines for qualified Medical Countermeasures (MCMs), including for products in the Strategic National Stockpile.
• Provides BARDA with targeted authority to enter into an agreement with a Medical Countermeasure Innovation Partner to foster and accelerate the development and innovation of MCMs, including promising technologies that also address unmet public health needs in addition to MCM needs, such as multiuse platform technologies.

Accountable Care Organizations (ACOs)

• Establishes additional requirements for assigning Medicare fee-for-service beneficiaries to ACOs under the Medicare shared savings program and requires the basis for assignment to reflect beneficiaries’ utilization of services furnished in federally qualified health centers or health clinics as well as primary care services.

Additional summaries and information on the Cures Act can be accessed at: https://energycommerce.house.gov/cures»