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March 21, 2017

In This Issue:

President Donald Trump's 2018 budget recommendation to Congress called for increasing some funding for the Centers for Medicare & Medicaid Services (CMS), raising Food and Drug Administration (FDA) medical product user fees to over $2 billion in 2018, from $1 billion in 2017, and cut funding to the National Institutes of Health (NIH) by $5.8 billion, or nearly 20%. The proposed budget also calls for reform of the Centers for Disease Control and Prevention (CDC). Overall, the president’s 2018 Budget requests $69.0 billion for the Department of Health and Human Services (HHS), a $15.1 billion or 17.9% decrease from the 2017 annualized continuing resolution level.

The Trump administration released the 2018 fiscal year budget plan on March 16. Even though the president proposes the budget for the federal government, Congress controls spending and must pass appropriations funding legislation.

For the CMS, the president proposes to, "strengthen the integrity and sustainability of Medicare and Medicaid by investing in activities to prevent fraud, waste, and abuse and promote high quality and efficient health care." Additionally, the president proposes discretionary funding for the CMS' Health Care Fraud and Abuse Control (HCFAC) to be increased to $751 million in 2018, which is $70 million higher than the 2017 annualized continuing resolution level. This will also increase the Social Security Administration program integrity funding by 26.8%, as it supports the Medicare program.

The budget recommendation for the FDA recalibrates and raises medical product user fees to over $2 billion in 2018, approximately $1 billion over the 2017 annualized level. The president's proposed budget states this increase in industry user fees, which had decreased from 2016 to 2017, and replaces the need for new budget authority to cover pre-market review costs. This increase in industry user fees would result in the FDA only focusing on pre-market activities and not new activities, such as laboratory-developed test (LDT) oversight.

The president's budget recommendation further states that, "to complement the increase in [FDA] medical product user fees, the budget includes a package of administrative actions designed to achieve regulatory efficiency and speed the development of safe and effective medical products."

In 2016, the NIH budget was roughly $32 billion and the agency is set to receive a $1 billion to $2 billion increase in the 2017 fiscal year from the 21st Century Cures law. The proposed $5.8 billion reduction for 2018 may have some impact on the 21st Century Cures law, since it includes a major reorganization of the NIH's Institutes and Centers. The CAP supported the increases to the NIH and various precision medicine initiatives.

With a reorganization of the 27 NIH institutes and centers, the White House would seek to focus resources on high priority research and training activities and would recommend that NIH absorb the Agency for Healthcare Research and Quality (AHRQ), a free-standing agency within the Department of Health and Human Services (HHS). The AHRQ is devoted to fostering research evidence to improve health care's quality, safety, and accessibility. The budget also reduces administrative costs and rebalances federal contributions to research funding.

Several organizations, such as the American Society for Clinical Oncology (ASCO) and American Cancer Society, strongly oppose the proposed cuts to the NIH.

For the CDC, the budget reforms key public health, emergency preparedness, and prevention programs. The proposed budget also calls to create a new Federal Emergency Response Fund tha would rapidly respond to public health outbreaks, such as Zika Virus. Also, the budget proposes to reform the CDC through a new $500 million block grant that would increase state flexibility and focus on the leading public health challenges specific to each state.

STATLINE will continue to report on the president's proposed budget and Congress's final appropriation legislation.

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The American Health Care Act (AHCA) to repeal and replace portions of the Affordable Care Act (ACA) passed the House Budget Committee to advance to the House floor for votes later this week.

On March 16, the House Budget Committee voted 19-17 to move the bill forward. Before the committee vote, the Congressional Budget Office (CBO) published a report showing the AHCA would reduce federal deficits by $337 billion over 10 years, estimating that the largest savings would come from reductions in Medicaid and from the elimination of the ACA's subsidies for non-group health insurance. The largest costs would come from repealing many of the alterations the ACA made to the Internal Revenue Code. These include an increase in the hospital insurance payroll tax rate for high-income taxpayers, annual fees imposed on health insurers, and from the establishment of a new tax credit for health insurance.

The bill is expected at the Rules Committee Wednesday, followed by the House floor vote on Thursday.

The CAP's positon is to not support the AHCA in its current form. The legislation does not address the majority of the CAP's overarching principles for health care reform. The bill also would leave intact ACA provisions that have been harmful to pathologists. The CAP's policy principle framework for changes to the ACA are:

  • Ensuring that individuals can access affordable insurance without interruption and take steps toward coverage for all Americans
  • Maintain key insurance reforms (eg, pre-existing conditions)
  • Protect prevention and screening services
  • Stabilize and strengthen the individual insurance market
  • Reduce regulatory burdens on physicians

More updates on this issue will be published in future editions STATLINE.

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On March 13, the Senate voted 55-43 to confirm Seema Verma as the next administrator for the Centers for Medicare & Medicaid (CMS). Eric Hargan was nominated by President Trump as the Deputy Secretary of the Department of Health and Human Services (HHS) on March 14.

Ms. Verma has extensive experience in Medicaid and was the architect of Indiana's Medicaid redesign program, the Healthy Indiana Plan and Healthy Indiana 2.0, where she worked closely with Vice President Mike Pence when he was the state's governor. In the Healthy Indiana Plan, the state expanded Medicaid eligibility, but required that beneficiaries pay premiums, contribute to health savings accounts, and receive incentives for healthy behavior.

Ms. Verma is the former president, CEO, and founder of SVC, Inc., a national health policy consulting company. Ms. Verma has worked extensively on a variety of policy and strategic projects involving Medicaid, insurance, and public health, working with state governors' offices, state Medicaid agencies, state health departments, state departments of insurance, as well as the federal government, private companies, and foundations.

Eric Hargan was nominated as HHS Deputy Secretary and will be subject to Senate confirmation. Previously Mr. Hargan served as Deputy General Counsel, as Principal Associate Deputy Secretary, and as Acting Deputy Secretary of HHS under President George W. Bush. Mr. Hargan is also a recipient of the HHS's Secretary's Award for Distinguished Service.

Currently, Mr. Hargan is a shareholder of Greenberg Traurig, LLP’s Health & FDA Business, based in Chicago. He earned a BA from Harvard University and a JD from Columbia University Law School.

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The Kentucky Legislature has passed a bill designed to keep autopsy photos private except in specific circumstances. Importantly, the measure includes amendments proposed by the CAP to allow the use of autopsy photos for legitimate teaching and training purpose.

The legislation has been considered sporadically in Kentucky since 2003 when the CAP first proposed amendments to the bill. However, until this year, the legislation failed to win enactment. Similar CAP model laws exist in California, Indiana, Michigan, North Carolina, North Dakota, South Carolina and Tennessee.

The measure, HB 67, places restrictions on who may have access to autopsy photos or other visual images or audio recording related to the autopsy. However, officials may make these images and recordings available to, in part, surviving family members, law enforcement agencies, beneficiaries of insurance policies and physicians or other medical professionals for the purposes of teaching or for publication in a scientific journal or textbook.

Passage of the bill was prompted by the case of a Kentucky boy who was killed in an accident and whose parents were unsuccessful in halting the release of his autopsy photos to media outlets. The new law, expected to be signed by Gov. Matt Blevin, will be designated as Jack's Law in honor of the child whose death inspired it.

The CAP's policy has long been that a medical examiner, coroner, or physician in lawful possession of an autopsy photography or other visual image, regardless of format, should be afforded lawful authority to use the images for medical or scientific teaching or training purposes or for publication in a scientific or medical journal or textbook as long as the following conditions are met: all identifying information is redacted and expunged, and facial identity is rendered as anonymous as possible.

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On March 1, Wyoming Governor Matthew Mead vetoed a genetic information privacy bill over concerns the bill could interfere with storage of genetic testing data.

The legislation (Senate File 31) would prohibit the collection, retention, and disclosure of genetic information without informed consent with some exceptions. The bill also authorizes an individual or the individual’s authorized representative to inspect, correct, and obtain genetic information and provides for the destruction of genetic information. The bill specifies criminal penalties for violations and provides for a civil right of action.

The CAP worked with state lawmakers on an amendment that would ensure clinical laboratory practices that entail genetic assessment of specimens would not be inadvertently impeded by legislation designed to protect the privacy of genetic information. The CAP argued that the bill should differentiate genetic testing for diagnosis and treatment from the predictive testing that is the subject of the bill's protection and control. Without the inclusion of the amendment, the bill would have the unintended consequence of impeding standards of care in cancer diagnosis and treatment and other types of now standard medical practice activities.

That amendment was adopted February 14 prior to passage of the bill by the House and Senate.

In vetoing the bill, Gov. Mead said that while he supports the goal of the measure to require a person or entity conducting genetic analysis to obtain informed consent, an amendment added late in the process could be interpreted to prohibit genetic testing facilities, research facilities, and universities from using a third party to store or back up their genetic testing data.

"Based on my discussions with legislators, this is an unintended result," wrote Mead in a letter to Eli Bebout, Senate president, adding that he hopes this could be easily corrected next year.

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On April 5, 2017, the CAP will present the Essential Tools for Pathologists Engaging in Grassroots Advocacy webinar that will provide a foundational training for members interested in becoming grassroots advocates. The 60-minute webinar will cover the basics of how Congress works, why grassroots matters and the tools and resources the CAP provides for members. We strongly encourage anyone attending the CAP Policy Meeting for the first time to participate, in order to gain a general understanding of grassroots advocacy before you arrive in Washington.

Whether you are DC bound or looking to get involved in your district, you'll want to hear from experienced advocates Joe Saad, MD, FCAP, Federal and State Affairs Committee Chair, Al Campbell, MD, FCAP, Grassroots Subcommittee Chair Federal and State Affairs Committee and moderator Michael Giuliani, CAP Advocacy Senior Director.

Register for the webinar.

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From April 24–26, CAP members can connect with government leaders and policy experts to discuss the impact of federal regulation on their pathology practices. By attending the 2017 Policy Meeting, CAP members will be eligible to receive 5.25 continuing medical education (CME) credits. The CAP is accredited by the Accreditation Council for Continuing Medical Education (ACCME) to provide CME for physicians.

New regulations are taking shape that will impact pathology reimbursements for years to come. Beginning in 2017, metrics outlined by a new reimbursement system for Medicare take effect. Attendees at the CAP Policy Meeting will receive the latest information and analysis on the implementation of new Medicare and laboratory regulations. The CAP is actively engaged in the legislative and regulatory arenas on the critical issues facing pathology and laboratory medicine, including physician payment reform, reducing regulatory burdens, and improving health care quality.

During one of the key sessions, Patrick Godbey, MD, FCAP, will provide an advocacy update on recent challenges and opportunities before the profession. Moreover, Emily Volk, MD, MBA, FCAP; Jonathan Myles, MD, FCAP; and Joe Saad, MD, FCAP, will provide updates on the work being done by key CAP councils and committees.

Throughout the 2017 Policy Meeting sessions, CAP members will have an opportunity to ask questions about today's rapidly changing health care landscape, including the CAP's position on aspects of the American Health Care Act.

The CAP Policy Meeting will also include meetings with members of Congress and their staff during the CAP's Annual Hill Day on April 26, which is the specialty's opportunity to focus on the federal issues most important to pathologists now and in the future.

The CAP Policy Meeting is a benefit of CAP Membership. There is no fee to register.

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