HIDA Health Reform Update

Distributors meet in Washington to discuss, influence healthcare policy

By Linda Rouse O’Neill, VP Govt Affairs HIDA

More than 60 leading healthcare distributor and manufacturer executives converged in Washington, D.C., this June to participate in strategic supply chain discussions and targeted advocacy efforts as part of HIDA’s Healthcare Distribution Summit. A HIDA Lobbying Fly-In preceded the event, where 40 supply chain leaders held 62 meetings on Capitol Hill.

The first annual Fly-In was very successful as attendees met with 22 members of Congress and held an additional 40 meetings with senior staff of members who sit on key committees which influence supply chain policy: the House Ways and Means, House Energy and Commerce, Senate Finance, and Senate HELP (Health, Education, Labor, and Pensions) committees.

HIDA members led discussions with members of Congress and their staff on several important industry issues including the implementation of federal prescription drug pedigree legislation, repealing the current 2.3 percent excise tax on medical devices, and the Centers for Medicare & Medicaid Services’ (CMS) competitive bidding program for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS).

Competitive bidding progress
In meetings on the House side of the Capitol, HIDA members encouraged legislators to sign a HIDA endorsed bipartisan letter led by Representatives Tom Price (R-GA), Tammy Duckworth (D-IL), Tom Reed (R-NY), and Bruce Braley (D-IA). The letter requests that the Office of Inspector General (OIG) conduct a comprehensive assessment of Medicare’s competitive bidding program.

The letter includes a list of items needing analysis, including how CMS develops the composite price, how the agency enforces supplier responsibilities, and the impact on beneficiary health. Of specific interest to HIDA’s member constituency, the letter includes language that directs the OIG to assess any changes in products and treatment patterns of enteral nutrition patients residing in skilled nursing facilities, nursing facilities, and intermediate care facilities.

HIDA Government Affairs also coordinated a virtual grassroots campaign in conjunction with the Fly-In. These efforts resulted in securing over 82 signatures to the letter as of press time.

The House letter builds on a significant win for distributors, which came in May, when HIDA’s grassroots efforts helped secure 39 Senate signatures on a letter to CMS urging a delay of further expansion of the competitive bidding program until the OIG finishes its current examination of the program’s second round. The bipartisan Senate letter sent a strong signal of support and interest on this complicated and controversial issue.

Specifically, the letter urges CMS to allow the OIG to complete its investigation on competitive bidding licensure problems and verification of Round Two single payment amounts and give Congress time to review the results before implementing the program nationwide in 2016.

Pedigree remains top priority
Traceability implementation was a key topic during the Fly-In, as HIDA members stressed the importance of considering medical-surgical distributor interests when implementing federal pedigree requirements. HIDA supported enactment of the Drug Supply Chain Security Act (Public Law 113-54), which was signed into law on Nov. 27, 2013. The Drug Supply Chain Security Act (DSCSA) creates a uniform pharmaceutical traceability solution for prescription drugs that will ensure provider and patient access to life-saving medicines while maintaining the safety and security of these drugs throughout the supply chain. Specific provisions in the final bill important to medical-surgical distributors include:

•  Key exemptions for products such as IV solutions, sterile water, and convenience kits;
• Strengthened federal pharmaceutical wholesaler licensure standards; and
• A uniform, national policy that immediately preempts the patchwork of state pedigree laws.

Industry trading partners are still awaiting the FDA’s final guidance on how the new transaction history, transaction information, and transaction statements requirements for the supply chain are to be passed by trading partners. HIDA has urged the FDA to:

• Recognize one standard is not feasible given the aggressive timeline and various capabilities that exist among trading partners, including healthcare providers;
• Provide the flexibility necessary to allow supply chain partners to continue use of current data transmission practices – both paper and electronic – for purposes of meeting the new TH/TI/TS requirements; and
• Recognize that paper packing slips, advanced shipment notices, and web portals/databases – with appropriate modifications – can meet the new TH/TI/TS requirements.

The Fly-In gave distributors an opportunity to follow up with offices that were instrumental in securing HIDA’s priorities in the final pedigree bill. Specifically, HIDA members met with committee staff for Senate HELP Committee Ranking Member Lamar Alexander (R-TN). HIDA’s pedigree guidance recommendations to the FDA were discussed in detail and provided an opportunity to continue discussing the impact on medical-surgical distributors.

Addressing the medical device tax
Another important discussion point during Hill meetings was the 2.3 percent excise tax on medical devices. HIDA supports its repeal, which continues to garner discussion on Capitol Hill and was a hot topic during the Policy Summit portion of the Healthcare Distribution Summit held the next day.

This year’s summit was HIDA’s first dedicated specifically to healthcare policy, and started with a rare bipartisan discussion featuring a joint presentation from Representative Ron Kind (D-WI) and Representative Charlie Dent (R-PA).

The most significant sticking point HIDA continues to hear regarding the medical device tax repeal is finding the necessary $20 billion in offsets to pay for its repeal. Even if a legitimate offset is found, there is considerable risk of it being redirected to other budget line items, making it that much more difficult to achieve a full repeal. Regardless, repeal remains a top priority among healthcare policymakers.

While there is significant work to be accomplished in Washington to help advance supply chain policy interests, distributors made important headway by taking some of their key priorities directly to legislators on Capitol Hill. Those who participated in the HIDA Fly-In agreed that the policymakers with whom they met were interested in and supportive of HIDA’s advocacy priorities, regardless of political affiliation. For more information on the Healthcare Distribution Summit or HIDA advocacy efforts, visit www.HIDA.org or contact HIDAGovAffairs@hida.org.