Health Care Watch: October 1, 2023
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from September 24 – October 1. Where available, hyperlinks are included to the relevant documents. Please let us know if you have any questions or would like additional information on the items below.
LEGISLATIVE UPDATE
House
On September 28, the Ways & Means Committee held a markup of H.R. 5688, the Bipartisan HSA Improvement Act of 2023 and H.R. 5687, the HSA Modernization Act of 2023.
H.R. 5688 would: allow health savings accounts (HSAs) distributions to pay for Direct Primary Care arrangements, allow employees who access workplace health center care to use HSAs, permit individuals to maintain an HSA even if the individual’s spouse is enrolled in a flexible spending arrangement (FSA), and allow employees to convert their FSA and health reimbursement arrangement (HRA) balances (up to the annual FSA contribution limit) into an HSA contribution upon enrolling in a high-deductible plan with an HSA HDP.
H.R. 5687 would make a number of changes including increasing the annual HSA contribution limits and allow spouses to make catch-up contributions to the same HAS.
Both bills were favorably reported – H.R. 5688 with a bipartisan vote of 28-14 and H.R. 5687 by a party-line vote.
On September 28, Energy & Commerce Committee Chair Cathy McMorris Rodgers (R-WA), Environment, Manufacturing, and Critical Materials Subcommittee Chairman Bill Johnson (R-OH), and Health Subcommittee Chairman Brett Guthrie (R-KY) sent a letter to the White House on the potential consequences of the Environmental Protection Agency’s (EPA) proposed regulations on the availability of ethylene oxide (EtO), which is needed for medical supply sterilization. The letter urges caution and thoughtfulness in EPA’s approach to avoid disrupting health care delivery through the unintentional fracturing of the fragile medical device supply chain.
On September 29, Majority Leader Steve Scalise (R-LA) announced that the House would remain in session for the first two weeks in October, rather than to take its planned recess. The chamber will consider a number of individual FY24 appropriations bills.
On September 30, in a surprise move and after failing to pass more conservative funding legislation, the House passed a continuing resolution (CR) to fund the government at FY23 levels for 45-days – thru November 17 – by a vote of 335-91. The legislation includes $16 billion in disaster relief funding. The Senate overwhelmingly passed the bill later in the day by a vote of 88-9. President Biden signed the bill into law just before midnight to avert a government shutdown. By putting an essentially “clean” CR on the floor, Speaker Kevin McCarthy (R-CA) risks triggering a Motion to Vacate the Chair vote – a challenge to his Speakership from the so-called Freedom Caucus. Some Freedom Caucus members have suggested Majority Whip Tom Emmer (R-MN) or Rules Committee Chairman Tom Cole (R-OK) as a replacement. Thus far, Whip Emmer has said he has “no interest” in the post.
Senate
On September 27, Finance Committee Chairman Ron Wyden (D-OR) and House Energy & Commerce Committee Ranking Member Frank Pallone, Jr. (D-NJ) sent a series of letters to the largest Medicaid Managed Care Organizations (MCOs) as part of a new investigation seeking answers following reports of high rates of prior authorization denials for patients.
On September 28, Finance Committee Chairman Wyden (D-OR) and Ranking Member Mike Crapo (R-ID) introduced the Modernizing and Ensuring PBM Accountability (MEPA) Act. The legislation aims to bring more transparency, accountability and competition to pharmacy benefit manager (PBM) practices in the pharmaceutical supply chain. The legislative text reflects the Chairman’s Mark that was reported out of the Finance Committee in July. Among other steps, the MEPA Act prohibits PBM compensation in Medicare from being tied to the sticker price of a drug, increases transparency by creating independent audit and enforcement measures, and provides relief to independent community pharmacies that are often on the receiving end of PBM business practices that are harmful to their business.
On September 28, Health, Education, Labor & Pensions (HELP) Ranking Member Bill Cassidy (R-LA) announced that he is seeking information as part of an investigation as to how certain hospital systems may spend revenue generated from the 340B Drug Pricing Program. Ranking Member Cassidy sent letters to Bon Secours Mercy Health and the Cleveland Clinic following multiple reports of certain 340B recipients announcing record-setting profits with no transparency on if and how much of that profit benefits patients.
REGULATORY UPDATE
On September 22, Department of Health & Human Services (HHS) Secretary Xavier Becerra sent a letter to health care payers warning pharmacies, providers, and insurers to guarantee plan enrollees receive updated COVID-19 vaccines for free. The letter states that some consumers are experiencing insurance coverage denials when seeking the updated COVID-19 vaccines and reminds payers of their legal obligations for coverage of the vaccines.
On September 25, HHS, through the Substance Abuse and Mental Health Services Administration (SAMHSA), the Health Resources and Services Administration (HRSA), and the Administration for Children and Families (ACF), announced $206 million in grant awards towards youth mental health. The awards aim to help expand access to mental health services for students in schools, bolster the behavioral health workforce, and improve access to mental health prevention and treatment for children and youth in communities across the country. Investments include: 1) SAMHSA awards of $131.7 million in grant programs that connect youth and families to behavioral health services; 2) HRSA awards of $55 million to expand access to mental health care for young people, including access to mental health care in schools and; 3) ACF awards of $20 million to improve the quality of mental health services provided to children involved in the child welfare system.
On September 25, the Centers for Medicare & Medicaid Services (CMS) released a statement on the current status of blood tests for organ transplant rejection. CMS stated that neither CMS nor the Medicare Administrative Contractors (MACs) have made changes that affect patients’ ability to have blood tests used to monitor for organ transplantation rejection covered when ordered by their physicians in medically appropriate circumstances. Patients with transplanted hearts, lungs, or kidneys who meet the coverage criteria for these tests, as laid out in the Local Coverage Determination (LCD), can continue to access these tests in place of a more invasive biopsy.
On September 26, CMS announced that average premiums, benefits, and plan choices for Medicare Advantage (MA) and the Medicare Part D prescription drug program will remain stable in 2024. The average monthly plan premium for all MA plans, which includes Medicare Advantage-Prescription Drug plans, is projected to change from $17.86 in 2023 to $18.50 in 2024 (an increase of $0.64). If enrollees choose to stay in their plan, most will experience little or no premium increase for next year, with nearly 73% of beneficiaries not seeing any premium increase at all. Additionally, enrollment in MA is projected to increase from 31.6 million in 2023 to 33.8 million in 2024.
On September 26, CMS announced the Calendar Year (CY) 2024 participants in the MA Value-Based Insurance Design (VBID) Model. The estimated number of MA enrollees covered by the 69 MA organizations (MAOs) participating in the VBID Model in 2024 will increase by 47% in 2024 compared to 2023. These enrollees will potentially benefit from the additional supplemental benefits, reduced cost sharing, or enhanced rewards and incentives offered through the Model. Through the VBID Model, CMS is testing a broad array of MA health plan innovations designed to enhance the quality of care for MA enrollees – notably those with low incomes, such as dually eligible enrollees in Medicare and Medicaid and those qualifying for the Low-Income Subsidy (LIS) Program – as well as to reduce costs for enrollees and the overall Medicare program.
On September 27, HHS, through SAMHSA awarded $232.2 million in grants for suicide prevention and behavioral health care for at-risk communities, including more than $200 million in new funding for states, territories, and Tribal nations and organizations to build local capacity for the 988 Suicide & Crisis Lifeline and related crisis services.
On September 27, HHS Secretary Becerra announced several new actions to address the maternal health crisis. Secretary Becerra hosted a roundtable with the HRSA Administrator Carole Johnson as well as providers, advocacy organizations, and state and local leaders. Secretary Becerra announced that HHS is awarding more than $103 million to support and expand access to maternal health, forming a new task force to address maternal mental health conditions and co-occurring substance use disorders, and launching a national public education campaign, Talking Postpartum Depression, to provide information about and combat stigmatization associated with this significant public health issue.
On September 27, HHS’ Office of Minority Health (OMH) announced that it awarded more than $13 million in grants to 11 organizations for its Healthy Families Community-Based Perinatal Health Initiative (COPHI) to develop innovative models for integrating community-based maternal support services into perinatal systems of care.
On September 27, the Food & Drug Administration’s (FDA’s) Cellular, Tissue, and Gene Therapies Advisory Committee voted 17-1 against an experimental treatment for ALS, concluding that the drug’s data and clinical results were unreliable.
On September 27, HHS Secretary Becerra met with health insurance company leaders and national stakeholders to discuss how HHS will continue to partner with the private sector to ensure individuals have access to updated COVID-19 vaccinations. The meeting is the latest in an ongoing series of conversations between HHS and representatives from across the health care sector for over a year in preparation for vaccine commercialization.
On September 27, the Biden Administration announced that it is extending the comment period for its mental health parity proposal and technical release. The deadline has been extended by 15 days to October 17, 2023.
On September 28, HHS’ Administration for Children and Families (ACF) announced $24.5 million in new awards to 34 tribes and tribal organizations to implement culturally grounded, evidence-based home visiting programs throughout the nation. These grants are part of the Tribal Maternal, Infant, and Early Childhood Home Visiting (MIECHV) program, which supports and promotes the health and well-being of American Indian and Alaska Native expectant families and families with young children.
On September 28, HHS, through SAMHSA awarded $42.6 million in Strategic Prevention Framework - Partnerships for Success (SPF-PFS) grants to 17 states and 60 communities. The grants focus on preventing substance use initiation and reducing the progression of substance use and related problems by supporting the development and delivery of state and community substance use prevention and mental health promotion strategies.
On September 29, Judge Michael Newman of the Southern District of Ohio ruled against the U.S. Chamber of Commerce’s request for a preliminary injunction that sought to halt the Inflation Reduction Act (IRA) drug price negotiation program before October 1, when the manufacturers of the initial 10 drugs selected for price negotiations must decide whether to participate in the program or potentially face penalties. Judge Newman said he will give the Chamber another opportunity to establish standing, but also indicated he will also entertain a future motion from the government to dismiss the case entirely. HHS Secretary Xavier Becerra praised the decision, saying, “Today’s ruling allows Medicare to move forward with implementing this program, and serves to confirm that nothing in the Constitution prevents Medicare from negotiating for lower drug prices.”
WHITE HOUSE
On September 26, the Biden Administration announced that the Advanced Research Projects Agency for Health (ARPA-H) will have regional hubs in three major metro areas: The Washington, DC region, Cambridge, MA; and Dallas.
On September 26, the Biden Administration announced the launch of three major projects funded under agreements with ARPA-H for new ways to detect and treat cancer. Two of the awards will work toward the development of new ways to treat cancer with up to $45 million to support the research. The team will seek to develop the Targeted Hybrid Oncotherapeutic Regulation (THOR) platform, a groundbreaking method to help boost cancer therapy response rates in peritoneal and solid tumors. An additional project, with up to $50 million in potential funding inclusive of options, seeks to map cancer cell biomarkers to drastically improve multi-cancer early detection (MCED) and streamline clinical intervention when tumors are still small.
RULES AT THE WHITE HOUSE OFFICE OF MANAGEMENT & BUDGET (OMB)
Pending Review
CMS
Clinical Laboratory Improvement Amendments of 1988 (CLIA) Fees; Histocompatibility, Personnel, and Alternative Sanctions for Certificate of Waiver Laboratories (CMS-3326); Final Rule; 7/31/23
CMS Enforcement of State Compliance with Reporting and Federal Medicaid Renewal Requirements Under Section 1902(tt) of the Social Security Act (CMS-2447); Interim Final Rule; 8/16/23
Strengthening Oversight of Accrediting Organizations (AO) and Preventing AO Conflict of Interest, and Related Provisions (CMS-3367); Proposed Rule; 12/27/22
Independent Dispute Resolution Operations (CMS-9897); Proposed Rule; 8/29/23
Appeal Rights for Certain Changes in Patient Status (CMS-4204); Proposed Rule; 9/18/23
Disclosures of Ownership and Additional Disclosable Parties Information for Skilled Nursing Facilities and Nursing Facilities (CMS-6084); Final Rule; 9/19/23
CY 2024 Home Health Prospective Payment System Rate Update and Home Infusion Therapy Services Payment Update (CMS-1780); Final Rule; 9/27/23
FDA
Direct-to-Consumer Prescription Drug Advertisements: Presentation of the Major Statement in a Clear, Conspicuous, Neutral Manner in Advertisements in Television and Radio Format; Final Rule; 5/19/23
Communications from Firms to Health Care Providers Regarding Scientific Information on Unapproved Uses of Certain Legally Marketed Medical Products: Questions and Answers (CDER, 2023-155); Notice; 7/13/23
Drug Products or Categories of Drug Products That Present Demonstrable Difficulties for Compounding Under Sections 503A or 503B of the Federal Food, Drug, and Cosmetic Act; Proposed Rule; 8/29/23
Institutional Review Board Waiver or Alteration of Informed Consent for Minimal Risk Clinical Investigations; Final Rule; 9/7/23
Stimulant Use Disorders: Developing Drugs for Treatment; Draft Guidance for Industry; Availability; Notice; 9/15/23
OCR
Safeguarding the Rights of Conscience as Protected by Federal Statutes; Final Rule; 9/15/23
REPORTS
Office of Inspector General (OIG)
On September 25, OIG released a report examining HRSA’s effective process to identify and monitor high-risk health centers that received COVID-19 grant funds. OIG found that HRSA had effective processes to identify and monitor the health centers that received COVID-19 grant funds. Specifically, OIG found that for the 37 health centers HRSA identified as high risk, HRSA appropriately performed financial assessments, assigned the correct risk level based independent assessment, and added quarterly expenditure report requirements to the applicable grant awards in accordance with its processes. Additionally, OIG found that for the sample of 33 moderate or minimal risk health centers that were reviewed, HRSA appropriately assessed the risk level as less than high risk based on the financial information it reviewed. HRSA elected not to provide formal comments; however, it provided technical comments, which OIG addressed as appropriate.
On September 25, OIG released a report on home health agencies (HHAs) telehealth services during the COVID-19 pandemic. OIG found that HHAs rarely furnished services via telehealth early in the COVID-19 PHE; however, for the few claims in the sample with services furnished via telehealth, HHAs did not fully comply with Medicare requirements for providing them. Of the 200 sampled claims, four claims had home health services furnished via telehealth, thus OIG estimates that there are 127,999 claims in the sampling frame with such services. None of the four claims fully complied with Medicare requirements for home health services furnished via telehealth. The errors occurred because the HHAs were unfamiliar with the Medicare requirements for such services, which were new early in the COVID-19 PHE. Of the remaining 196 sampled claims, 194 claims did not have home health services furnished via telehealth. OIG recommends that CMS monitor HHA reporting of the new G-codes to determine whether further updates to regulations or guidance are necessary.
On September 26, OIG released a report examining Centers for Disease Control & Prevention (CDC) oversight and assistance in implementing COVID-19 screening testing programs. OIG found that CDC provided oversight and assistance to the CDC’s Epidemiology and Laboratory Capacity for Prevention and Control of Emerging Infectious Diseases (ELC) program recipients in implementing the COVID-19 screening testing programs, by utilizing recipient data and conducting periodic outreach through webinars and technical assistance calls, among other things. However, based on the ELC recipients' responses to the OIG survey, OIG identified challenges the ELC recipients encountered in implementing the ELC screening testing programs within their jurisdictions. Some of the ELC recipients encountered challenges expending the ELC Reopening Schools funding, such as barriers from schools in implementing the screening testing programs in their districts, while others used alternative sources of government funding in the implementation of the screening testing programs. OIG made no recommendations but expects that CDC will use the suggestions and feedback from the ELC recipients' responses to the OIG survey to improve development of ELC programs that are in response to future public health emergencies.
On September 26, OIG released a report examining treatment of Medicaid enrollees with opioid use disorder (OUD). OIG found that one-third of the 1.5 million Medicaid enrollees with OUD did not receive medication for OUD (MOUD) in 2021. OIG reported that certain demographic groups—including Black or African American enrollees; enrollees 18 years of age and younger; and enrollees with a disability and/or blindness—were less likely to receive MOUD. In 10 States, less than half of enrollees with opioid use disorder received MOUD. OIG recommends that CMS: 1) encourage and support States' efforts to reduce barriers to MOUD, especially among groups who may be underserved; and 2) encourage States and work with Federal partners to educate Medicaid and CHIP enrollees about access to MOUD.
Congressional Budget (CBO)
On September 28, CBO released an updated estimate finding that CMS’ Center for Medicare & Medicaid Innovation will increase federal spending by $1.3 billion from 2021 to 2030. The estimates, based on reviews of 49 payment models CMMI has launched since its creation in 2010, are below initial projections. CBO currently estimates that CMMI’s activities increased direct spending by $5.4 billion, or 0.1% of net spending on Medicare, between 2011 and 2020. In 2010, CBO projected CMMI would reduce spending by $2.8 billion over 10 years.
On September 28, CBO released a report examining federal subsidies for health insurance from 2023 to 2033. CBO found that in 2023, federal subsidies for health insurance are estimated to be $1.8 trillion, or 7.0% of gross domestic product (GDP). In CBO and the Joint Committee on Taxation’s (JCT’s) projections, those net subsidies reach $3.3 trillion, or 8.3% of GDP, in 2033.
UPCOMING HEARINGS
House
Ways & Means Committee
October; TBD
Markup of drug and device legislation and hearing on the status of CMS’ Center for Medicare & Medicaid Innovation