December 02, 2016

House Passes Revamped 21st Century Cures Act

On a vote of 392-26, the House of Representatives overwhelmingly approved an amended version of H.R. 34, the 21st Century Cures Act, on Nov. 30 providing a signature legislative achievement to outgoing Energy and Commerce Committee Chairman Fred Upton (R-MI). The Senate is widely expected to pass this sweeping bipartisan biomedical reform bill with minimal opposition in the coming days.

A revamped version of the 21st Century Cures Act was released over the Thanksgiving holiday weekend by Rep. Upton and Sen. Lamar Alexander (R-TN), chair of the Senate Health, Education, Labor, and Pensions Committee.

Initially crafted primarily to accelerate the federal government’s approval process for pharmaceuticals and medical devices, H.R. 6, a previous version of the 21st Century Cures Act, overwhelmingly passed the House in July 2015 but languished in the Senate. Following the election of President-Elect Donald Trump and Republicans retaining control of the House and Senate, H.R. 34 morphed into a massive bill, which provides approximately $6.3 billion in funding over 10 years to implement a wide variety of bipartisan health care initiatives.

The legislation allocates approximately $4.8 billion in additional funding over 10 years to the National Institutes of Health (NIH), including $1.4 billion for President Obama’s Precision Medicine policy, $1.8 billion for Vice President Biden’s “Cancer Moonshot” and $1.6 billion for the Brain Research Through Advancing Innovative Neurotechnologies (BRAIN) Initiative to understand and effectively treat Alzheimer’s disease.

In addition, H.R. 34 allocates $1 billion for state grants to fight opioid addiction and $500 million to help the Food and Drug Administration (FDA) administer new policies mandated in the legislation. Lawmakers also attached a previously separate, comprehensive mental health reform legislation to the bill.

Funding for these initiatives comes primarily from the repeal of the Patient Protection and Affordable Care Act’s Prevention and Public Health Fund and oil sales from the federal Strategic Petroleum Reserve.

Unlike the previous version of the 21st Century Cures Act, the $4.8 billion will not be classified as mandatory funding and, as a result, the funding is subject to the annual appropriations process. Congress is using various novel bill-drafting techniques to ensure these resources are ultimately reserved for intended purposes outlined in the legislation.
Health Information Technology (IT) Policy

Health Information Technology (IT) Policy

H.R. 34 contains the most extensive update of federal health IT policy since the American Recovery and Reinvestment Act (ARRA)/Health Information Technology for Economic and Clinical Health (HITECH) Act in 2009. Section 4004 mandates an ACR-supported expansion of the authority for the Department of Health and Human Services (HHS) Office of Inspector General (OIG) to investigate and penalize anticompetitive “information blocking” by developers, hospitals and others.

Section 3060 provides reasonable limitations over FDA’s authority to regulate certain types of health IT/clinical decision support functionality by codifying elements of an ACR-supported FDA/Office of the National Coordinator for HIT (ONC)/Federal Communications Commission report on health IT safety.

Section 3002 eliminates the ONC’s controversial Health IT Policy and Health IT Standards committees in favor of a new, potentially more representative “HIT Advisory Committee.”

Other health IT-related sections of the bill require additional efforts to address interoperability, including requiring vendor attestations of interoperability as a prerequisite for ONC certification; mandating two Government Accountability Office (GAO) studies of patient matching and patient access barriers; and directing HHS to encourage more partnerships between HIE networks, providers, patients and others.

FDA and Research Reforms

Section 1002 provides $500 million to the FDA over 10 years to hasten drug and medical device approvals while maintaining FDA’s current safety and effectiveness standards. Section 2012 enables the FDA secretary to issue certificates of confidentiality to researchers to protect identifiable data gathered during research unless specified conditions are met. It grants legal immunity to all identifiable, sensitive information gathered during research unless the research subject consents to its disclosure. Section 2014 permits the NIH director to require grant recipients to share data from their NIH-funded research in a manner that is consistent with applicable laws and regulations.


Section 4013 requires the Centers for Medicare and Medicaid Services (CMS) and the Medicare Payment Advisory Commission (MEDPAC) to produce two separate reports to Congress outlining recommendations on various ways to facilitate the broader application of telehealth services within Medicare.

The bill includes a non-binding “Sense of Congress” applauding the concept of telehealth in general. More specifically, it stipulates that any expansion of telehealth should provide reimbursement parity with in-person services, and it stresses the importance of removing existing telehealth geographic and originating site restrictions. ACR is pleased H.R. 34 does not include any changes to the current system of state licensure and board certification.

Site Neutrality

The 21st Century Cures Act includes two sections related to site-neutral payments, or the concept of equalizing reimbursement for services regardless of the setting where the patient receives health care. Most notably, Section 16001 provides limited relief for select “provider-based” hospital outpatient departments (HOPDS) that were under construction prior to the implementation of the prospective site neutral policy enacted through the Bipartisan Budget Act (BBA) of 2015.

Under current law, “off-campus” provider-based HOPDs open prior to Nov. 2, 2015 can continue to be reimbursed under the Hospital Outpatient Prospective Payment System (HOPPS). All future provider-based HOPDs are now forced to bill for outpatient services under the lower Medicare Physician Fee Schedule.

CMS released final regulations implementing this “grandfather clause” for existing HOPDs in mid-November 2016. H.R. 34, however, includes ACR-supported provisions to extend the BBA’s grandfather clause and to grant “mid-build” off-campus provider-based HOPDs an additional 60 days to certify in writing that they are operational and, therefore, permitted to bill for services under the HOPPS effective Jan. 1, 2018.

Section 4012 requires CMS to provide Medicare beneficiaries with better access to electronic data pertaining to differences in the cost of providing services in ambulatory surgical centers (ASC) compared to HOPDs. Beginning in 2018, CMS will be required to annually post online information summarizing Medicare payments to HOPDs and ASCs, as well as corresponding beneficiary co-payments in these two settings. Lawmakers believe greater price transparency will encourage patients to receive care in the most efficient setting.

ACR members are encouraged to monitor the Advocacy in Action e-News for the latest developments pertaining to the 21st Century Cures Act in the Senate.