Human Resources
The Washington Report - 2/06/2019

The Washington Report

February 6, 2019


President Trump Delivers SOTU

On February 5, 2019, President Trump delivered his second State of the Union (SOTU) address.

The full text of H.J. Res. 28 (116) is available here.


HHS Releases Proposed Regulations on Removal of Safe Harbor Protection for Rebates Involving Prescription Pharmaceuticals and Creation of New Safe Harbor Protection for Certain Point-of-Sale Reductions in Price on Prescription Pharmaceuticals and Certain PBM Service Fees

On January 31, 2019, the Department of Health and Human Services (HHS) released proposed regulations to lower prescription drug prices and out-of-pocket costs by “encouraging manufacturers to pass discounts directly on to patients and bringing new transparency to prescription drug markets.” The regulations propose to amend the safe harbor regulation concerning discounts, which are defined as certain conduct that is protected from liability under the federal anti-kickback statute, Section 1128B(b) of the Social Security Act. The amendment would revise the discount safe harbor to explicitly exclude from the definition of a discount eligible for safe harbor protection certain reductions in price or other enumeration from a manufacturer of prescription pharmaceutical products to plan sponsors under Medicare Part D, Medicaid managed care organizations as defined under Section 1903(m) of the Act, or pharmacy benefit managers (PBMs) under contract with them. Additionally, HHS is proposing two new safe harbors. The first would protect certain point-of-sale reductions in price on prescription pharmaceutical products and the second would protect certain PBM service fees.

Comments on the proposed regulations are due no later than April 8, 2019.

For additional information about the proposed regulations, please see the Aon bulletin HHS Proposes Banning Rx Rebates Paid in Medicare and Other Government Programs in the Publications section.

The new release is available here.

A fact sheet is available here.

The proposed regulations are available here.

CMS Proposes Medicare Advantage and Part D Payment and Policy Updates

On January 30, 2019, the Centers for Medicare and Medicaid Services (CMS) released Part II of the 2020 Advance Notice of Methodological Changes for Medicare Advantage Capitation Rates and Part D Payment Policies (the Advance Notice), and Draft Call Letter. (CMS released Part I of the Advance Notice on December 20, 2018.) According to the new release, the proposed changes “will expand opportunities for seniors to choose Medicare Advantage plans that for the first time are providing new supplemental benefits in 2019. Beginning with the 2019 plan year, Medicare Advantage plans can provide certain enrollees with access to different benefits and services. For the 2020 plan year and beyond, under statutory changes and the proposed guidance on which we are soliciting comment in today’s release, Medicare Advantage plans will have greater flexibility to offer chronically ill patients a broader range of supplemental benefits that are tailored to their specific needs, such as providing home-delivered meals or transportation for non-medical needs.” Additionally, the proposals include actions to address the opioid crisis. CMS will accept comments on all proposals in Part I and Part II through Friday, March 1, 2019, before publishing the final Rate Announcement and Call Letter by April 1, 2019.

The CMS news release is available here.

A fact sheet on the 2020 Advance Notices (Part I and Part II) and the Draft Call Letter is available here.

The 2020 Advance Notices (Part I and Part II) and Draft Call Letter are available here.

Aon Publications

HHS Proposes Banning Rx Rebates Paid in Medicare and Other Government Programs

On January 31, 2019, the U.S. Department of Health and Human Services (HHS) released proposed regulations that would prohibit pharmaceutical companies from paying rebates to pharmacy benefit managers in government health care programs such as Medicare. If finalized in their current form, the proposed regulations would take effect on January 1, 2020.

The Aon bulletin is available here.

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