Health Care Watch: October 7, 2024
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from September 29 – October 6. 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 October 2, the Congressional Budget Office (CBO) responded to a request from GOP Committee leaders asking CBO to compare the Centers for Medicare & Medicaid Services’ (CMS’) 2025 Part D average bid amounts for prescription drug plans with CBO’s projections. The letter also asked CBO to examine how CMS’ temporary subsidies to Part D plans, used to mitigate expected premium increases as a result of benefit changes made in theInflation Reduction Act (IRA), would affect both federal spending and net spending for interest on the federal debt. CBO stated that after accounting for information about 2025 Part D bids, CBO expects that the additional plan costs reflected in those bids will result in an increase in federal spending of $10 billion to $20 billion in calendar year 2025, compared with earlier projections. CBO also estimates that the temporary subsidies will increase federal spending in calendar year 2025 by an additional $5 billion and that, over the next decade, this will lead to an increase of $2 billion in net spending for interest, relative to prior projections.
On October 2, a group of Energy & Commerce Committee Republicans, led by Committee Chair Cathy McMorris Rodgers (R-WA), sent a letter to Advanced Research Projects Agency for Health (ARPA-H) Director Renee Wegrzyn requesting information on how ARPA-H is ensuring that institutions and individuals involved in the research projects it funds comply with Title VI to ensure a harassment and discrimination-free environment.
Senate
On September 30, Health, Education, Labor & Pensions (HELP) Committee Ranking Member Bill Cassidy (R-LA) sent a letter to Food & Drug Administration (FDA) Commissioner Robert Califf urging FDA to provide more guidance on listing patents for drug-and-device combination products in the Orange Book. The letter discusses actions taken by the Federal Trade Commission (FTC) and accuses FDA of failing to take responsibility for enforcement of the Food, Drug, and Cosmetic Act (FDCA).
On September 30, a group of 16 Senate Democrats, led by Finance Committee Chairman Ron Wyden (D-OR) and Sen. Maggie Hassan (D-NH), introduced legislation to address a rising trend of rural hospitals and hospitals in underserved areas closing their labor and delivery units. The Keeping Obstetrics Local (KOLA) Act, would increase Medicaid payment rates for labor and delivery services for eligible rural and high-need urban hospitals, provide “standby” payments to cover the costs of staffing and maintaining an obstetrics unit at low-volume hospitals, create low-volume payment adjustments for labor and delivery services at hospitals with low birth volumes, and require all states to provide postpartum coverage for women in Medicaid for 12 months.
On October 1, Finance Committee Chairman Wyden and Sen. Sherrod Brown (D-OH) sent a letter to Federal Trade Commission (FTC) Chair Lina Khan urging the commission to expand its work into examining additional anti-competitive practices taken by pharmacy benefit managers (PBMs). The letter states that PBMs may be using these anti-competitive behaviors to increase barriers to competition and take in larger revenues.
REGULATORY UPDATE
On September 30, CMS announced that some Medicare enrollees will pay less for 54 drugs available through Medicare Part B as a result of the IRA’s drug inflation policy. The drugs will have a lowered Part B coinsurance rate from October 1, 2024 – December 31, 2024, since drug companies raised prices for each of these 54 drugs faster than the rate of inflation. According to CMS, over 822,000 people with Medicare use these drugs annually to treat conditions such as cancer, osteoporosis, and pneumonia.
On September 30, HHS’ Assistant Secretary for Technology Policy/Office of the National Coordinator for Health Information Technology (ASTP), released the final 2024-2030 Federal Health IT Strategic Plan in accordance with the Health Information Technology for Economic and Clinical Health (HITECH) Act. The Strategic Plan presents federal health information technology (health IT) goals and objectives including to: promote health and wellness; enhance the delivery and experience of care; accelerate research and innovation; and connect the health system with health data.
On September 30, the Substance Abuse and Mental Health Services Administration (SAMHSA) awarded $68.5 million in grants that support behavioral health education, training and community programs to help address mental health and substance use conditions.
On September 30, FDA published the over-the-counter (OTC) monograph annual forecast of planned monograph activities that FDA intends to initiate over the next 3 years. All FDA-initiated proposed orders on the monograph annual forecast can be found here.
On September 30, CMS posted a final National Coverage Determination (NCD) for Pre-exposure Prophylaxis (PrEP) Using Antiretroviral Drugs to Prevent Human Immunodeficiency Virus (HIV) Infection. Under the NCD, Medicare will cover oral and injectable forms of PrEP and other related services to prevent HIV without cost-sharing under Part B.
On October 1, the Consumer Financial Protection Bureau (CFPB) released an advisory opinion regarding several illegal practices used by collectors to recover outstanding medical debt, including double billing, misrepresenting consumers’ rights to dispute bills, and pursuing debts that are insufficiently documented or exceed legal price limits. The opinion reminds debt collectors that federal law bars them from collecting on inaccurate, unsubstantiated or legally invalid medical bills. CFPB also published a consumer advisory outlining steps for individuals who have received collection notices for medical bills.
On October 1, FDA announced seven new clinical trial grants awarded in fiscal year (FY) 2024 under the Orphan Products Grants Program. In total, clinical researchers will receive approximately $17.2 million over the next four years. Newly funded projects include: a treatment for Cushing’s syndrome; two treatments for blood disorders; two cancer treatments; a treatment for lymphatic malformations; and a gene therapy for an inherited eye disease that causes blindness. FDA also awarded three new natural history study grants under the Orphan Products Grants Program, providing approximately $4.7 million over four years to advance the understanding of how specific rare diseases progress over time.
On October 1, FDA announced over $5.4 million in funding to support clinical research under the Rare Neurodegenerative Disease (RNDD) Grants Program in FY 2024. FDA received 15 applications and was able to fund one new grant for $1.3 million annually over four years to support development of retinal imaging biomarkers for individuals affected with cerebral autosomal dominant arteriopathy with subcortical infarcts and leukoencephalopathy (CADASIL). FDA also provided an additional $4.1 million in FY 2024 to nine ongoing studies to support ALS and other rare neurodegenerative diseases including.
On October 1, FDA’s Center for Devices and Radiological Health (CDRH) announced that breakthrough designated devices reviewed in the Office of Radiological Health and the Division of Ophthalmic Devices are eligible to enroll in the Total Product Life Cycle (TPLC) Advisory Program (TAP) Pilot. Additionally, CDRH provided a resource for innovators and collaborators: TAP Pilot Engagement Tips that is intended to provide considerations that may help foster productive engagement between medical device sponsors and non-FDA parties including patients, payers, and health care providers during the medical device design and development process.
On October 1, Johnson & Johnson sent a letter to Health Resources and Services Administration (HRSA) Administrator Carole Johnson withdrawing its plan to require 340B hospitals to apply for rebates for two drugs instead of giving an upfront discount. A Johnson & Johnson spokesperson said in a statement that it would pull back on the model “to ensure [HRSA’s] unprecedented position would not restrict patients’ access to J&J’s lifesaving and life-changing medicines.”
On October 2, CMS released final guidance for the second cycle of negotiations for the Medicare Drug Price Negotiation Program, along with additional information on CMS support for manufacturer effectuation of negotiated prices in 2026 and 2027. The guidance indicates that CMS will engage with a Medicare Transaction Facilitator (MTF) that will serve as the infrastructure in the exchange of data and the optional facilitation of payments to ensure that eligible individuals with Medicare and associated pharmacies have access to the negotiated prices. Manufacturer utilization of the MTF for payment facilitation is voluntary. Additionally, the guidance includes improvements to the design of last year’s patient-focused engagement events to better understand patient experiences with the selected drugs and their therapeutic alternatives. CMS will announce the selection of up to 15 additional Part D drugs for the second cycle of negotiations by February 1, 2025.
On October 2, FDA announced that the shortage of tirzepatide injection, a glucagon-like peptide 1 (GLP-1) medication, has been resolved. Tirzepatide injection has been in shortage since 2022 due to increased demand.
On October 2, CMS’ Center for Clinical Standards and Quality announced an information session entitled From Research to Reality: Translating Reliability and Validity Findings into Actionable Insights. The session will take place on October 23, 2024, at 2:00 PM ET and will cover the core concepts of reliability and validity. Registration can be found here.
On October 3, FDA’s Office of Women’s Health (OWH) released its updated Women’s Health Research Roadmap. The Roadmap, provides a science-based framework to address women’s health research questions, build women’s health science into FDA’s research activities, outline priority areas in which new or further research is needed, and serve as a catalyst for research collaborations both internal and external to the FDA.
On October 3, FDA approved Opdivo (nivolumab) with platinum-doublet chemotherapy as neoadjuvant treatment, followed by single-agent nivolumab after surgery as adjuvant treatment, for adults with resectable (tumors ≥ 4 cm and/or node positive) non-small cell lung cancer (NSCLC) and no known epidermal growth factor receptor (EGFR) mutations or anaplastic lymphoma kinase (ALK) rearrangements.
On October 4, CMS released the proposed Notice of Benefit and Payment Parameters for the 2026 plan year. The draft payment notice proposes several changes that aim to ease enrollment and keep the market stable, including those that aim to protect consumers from fraudulent marketplace activities, establish a minimum premium threshold for triggering the “grace period” for non-payment of premiums, update risk adjustment policy, set user fees along with other policies. A fact sheet can be found here. Comments on the proposal are due by November 12.
WHITE HOUSE
On October 1, Governor Tim Walz (D-MN) and Senator J.D. Vance (R-OH) participated in a vice-presidential debate. During the debate, the vice-presidential candidates discussed various health care topics including health care affordability, chronic illness, abortion, and the Affordable Care Act.
On October 1, President Biden signed into law S. 133, the NAPA Reauthorization Act which extends and amends the National Alzheimer’s Project and the Advisory Council on Alzheimer’s Research, Care, and Services, and S. 134, the Alzheimer’s Accountability and Investment Act, which requires direct transmittal of the annual National Institutes of Health budget estimate for the National Alzheimer’s Project.
On October 1, Vice President Harris announced a series of actions by CFPB, the Department of Defense (DoD), and HHS to increase pathways for medical debt relief, to address illegal actions by third-party debt collectors, and to improve understanding of the impacts of medical debt. Actions include: holding third-party debt collectors accountable to confirm debts are accurate, before engaging in collection actions.; increasing pathways to reduce medical bills; providing transparency on tax-exempt hospital debt collection practices; and collecting data to better understand the impact of medical debt on seniors.
RULES AT THE WHITE HOUSE OFFICE OF MANAGEMENT & BUDGET (OMB)
Pending Review
CMS
Healthcare System Resiliency and Modernization (CMS-3426); Proposed Rule; 10/12/23
Administrative Simplification: Modifications to NCPDP Retail Pharmacy Standards (CMS-0056); Final Rule; 6/27/24
Amendments to Rules Governing Organ Procurement Organizations (CMS-3409); Proposed Rule; 8/8/24
Contract Year 2026 Policy and Technical Changes to the Medicare Advantage, Medicare Prescription Drug Benefit, and Medicare Cost Plan Programs, and PACE (CMS-4208); Proposed Rule; 9/20/24
Alternative Payment Model Updates; Increasing Organ Transplant Access (IOTA) Model (CMS-5535); Finale Rule; 9/20/24
CY 2025 Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Medicare Part B (CMS-1807); Final Rule; 9/25/24
CY 2025 Hospital Outpatient PPS Policy Changes and Payment Rates and Ambulatory Surgical Center Payment System Policy Changes and Payment Rates (CMS-1809); Final Rule; 9/25/24
CY 2025 Home Health Prospective Payment System Rate Update and Home Infusion Therapy and Home IVIG Services Payment Update (CMS-1803); Final Rule; 10/1/24
CY 2025 Changes to the End-Stage Renal Disease (ESRD) Prospective Payment System and Quality Incentive Program (CMS-1805); Final Rule; 10/3/24
FDA
Expedited Program for Serious Conditions--Accelerated Approval of Drugs and Biologics; Draft Guidance for Industry; Availability; Notice; 7/9/24
Marketing Submission Recommendations for a Predetermined Change Control Plan for Artificial Intelligence-Enabled Device Software Functions; Guidance for Industry and Food and Drug Administration Staff; Notice; 8/26/24
Nonprescription Drug Product With an Additional Condition for Nonprescription Use; Final Rule; 9/24/24
Notifying the Food and Drug Administration of a Permanent Discontinuance in the Manufacture or an Interruption of the Manufacture of an Infant Formula; Draft Guidance for Industry; Notice; 9/26/24
Considerations for Including Biopsies in Clinical Trials; Draft Guidance for Industry, Investigators, Institutions, and Institutional Review Boards; Notice; 9/27/24
Transitional Enforcement Policy for Ethylene Oxide Sterilization Facility Changes for Class III Devices; Guidance for Industry and Food and Drug Administration Staff; Availability; Notice; 10/2/24
REPORTS
Centers for Medicare & Medicaid Services (CMS)
On September 30, CMS released a report examining the agency’s study of the Acute Hospital Care at Home (AHCAH) initiative. The report found that AHCAH-approved hospitals used a variety of sources and methods to establish patient selection criteria to determine which individuals would qualify for AHCAH services. Additionally, with respect to Medicare beneficiary demographic characteristics, AHCAH patients were found to be meaningfully different from inpatients receiving services furnished by the same hospital facility. In general, AHCAH patients were more likely to be white and live in an urban location and less likely to receive Medicaid or low-income subsidies. The report also found that patients in AHCAH were primarily treated for a relatively small set of conditions and the most common Medicare Severity Diagnostic Related Groups (MS-DRGs) and Major Diagnostic Categories (MDCs) treated through the AHCAH initiative included respiratory conditions, circulatory conditions, renal conditions, and infectious diseases. A summary of all findings can be found here.
Office of Inspector General (OIG)
On October 2, OIG released a report examining maternal health care access in Medicaid managed care. OIG found that states are not leveraging managed care provider coverage requirements and network adequacy standards to promote access to maternal health care. Additionally, OIG found that some States are not using network adequacy standards to address important dimensions of maternal health care access. For example, some States measure access to specific provider types such as OB/GYNs, but many States do not. OIG recommends that CMS: 1) take steps to confirm that all States cover required services from maternal health care providers for managed care enrollees; 2) clarify the requirement that States have a provider-specific OB/GYN network adequacy standard; and 3) support States in tailoring their network adequacy standards to better address maternal health care needs.
Government Accountability Office (GAO)
On October 2, GAO released a report examining hospital pricing data completeness and accuracy. GAO found that various challenges have limited the usability of hospital pricing data, according to 16 selected stakeholders representing users of the data such as health plans and researchers. Describing experiences prior to CMS' 2024 updates to the requirements, stakeholders told GAO that inconsistent file formats, complex pricing, and perceived incomplete and inaccurate data have impeded price comparisons across hospitals and prevented large-scale, systematic data use. GAO stated that CMS does not have assurance that pricing data hospitals report are sufficiently complete and accurate, and CMS has not assessed such risks to determine if additional enforcement actions are needed. Additionally, without an assessment, CMS does not know whether the data are usable to help increase competition. GAO recommends that CMS assess whether hospital pricing data are sufficiently complete and accurate to be usable, and to implement any additional enforcement activities as needed.
ADDITIONAL POLICY NEWS
On September 30, Steward Health Care CEO Ralph de la Torre announced that he will step down from his position just days after the Senate voted to hold him in contempt of Congress for failing to comply with a congressional subpoena. The following day, de la Torre filed a lawsuit against the HELP Committee, stating that the committee violated his constitutional rights.
On October 2, Humana disclosed that 25% of its Medicare Advantage members are enrolled in plans that have at least a four-star rating for 2025, down from about 94% this year.
On October 2, the Federation of American Hospitals (FAH) announced that it has elected Marc Miller, president and CEO of Universal Health Services, as chair of its board of directors for 2025. FAH also announced that its longtime executive vice president of policy, Steve Speil, will retire on January 1, 2025.
On October 3, Texas Attorney General Ken Paxton filed a lawsuit against major insulin manufacturers and PBMS—including Lilly, Express Scripts, CVS Pharmacy, and others—alleging a conspiracy to increase prices of insulin. The lawsuit states that insulin manufacturers artificially raised the prices of their drugs while paying PBMs a significant, undisclosed portion in return for preferred placement in PBM offerings. The PBMs allegedly rewarded the manufacturers with the highest list prices by giving their products preferred status while excluding more affordable alternatives.
On October 10 and 11, the Medicare Payment Advisory Commission (MedPAC) will hold its October public meetings. Topics of discussion include Medicare benefits in nursing homes, findings from MedPAC’s annual beneficiary and provider focus groups, supplemental benefits in Medicare Advantage (MA), work plans for a mandated final report on the impact of recent changes to the home health prospective payment system, and initial estimates of home health care use among MA enrollees.