Health Care Watch: October 8, 2023
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from October 1 – October 8. 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 3, the House voted to remove Kevin McCarthy (R-CA) as Speaker, then recessed until October 11, when the House is slated to reconvene to elect a new speaker. Current plans are for the GOP to hold a candidate forum on October 11 and a vote by secret ballot on October 12. It would not be surprising if it takes a week or two for a candidate to receive the required number of votes to be elected Speaker.
Rep. Patrick McHenry (R-NC) was announced as Speaker pro tempore until a vote can be held. Rep. McCarthy stated that he will not seek the speakership again but does plan to run for re-election. Reps. Steve Scalise (R-LA) and Jim Jordan (R-OH) have formally entered the race to become speaker. Republican Study Committee Chair Kevin Hern (R-OK) decided not to entire the race at this time.
On October 4, a bipartisan group of lawmakers on the Ways & Means Committee sent a letter to Centers for Medicare & Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure and White House Office of Management and Budget (OMB) Director Shalanda Young regarding a CMS proposal aimed at identifying poorly performing hospice agencies. Reps. Beth Van Duyne (R-TX), Earl Blumenauer (D-OR), Brad Wenstrup (R-OH) and Jimmy Panetta (D-CA) stated in the letter that CMS’ proposal for identifying hospices that should be in the Hospice Special Focus Program would not adequately identify poor performing hospices because of incomplete survey data.
Senate
On October 1, California Governor Gavin Newson (D) announced that he will appoint EMILY’s List President Laphonza Butler to fill the seat of the late Senator Dianne Feinstein.
On October 3, 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) across the country as part of a new investigation seeking answers following reports of high rates of patient prior authorization denials. The probe comes after the Department of Health & Human Services (HHS) Office of Inspector General (OIG) released a report finding that numerous Medicaid MCOs had high rates of health services denials for patients.
REGULATORY UPDATE
On September 29, the Food & Drug Administration (FDA) released a proposed rule that would designate most laboratory-developed tests as medical devices subject to stricter review. FDA stated that it wants to phase in regulation of the lab tests during the next five years to ensure their safety and effectiveness. Comments on the rule are due by December 4, 2023.
On September 29, HHS, along with the Departments of Labor and the Treasury released a request for information (RFI) on coverage of over-the-counter (OTC) preventive services. The RFI solicits comment on coverage for OTC items recommended by experts for preventive care, including contraceptives, tobacco smoking cessation products, COVID-19 tests, folic acid during pregnancy and breastfeeding supplies. The RFI includes questions related to health equity, including whether certain populations face disproportionate challenges in accessing OTC preventive products. Comments are due by December 4.
On September 29, U.S. District Court for the District of Columbia ruled against a Trump-era rule that allowed exchange plans to refuse to count the full value of drug manufacturer co-pay coupons toward beneficiaries’ maximum out-of-pocket costs and has remanded the rule to the Department of Health and Human Services (HHS). Patient groups argued that the 2021 exchange policy that allowed “copay accumulators” violated the definition of cost-sharing under the Affordable Care Act and previous federal rules. Judge John Bates stated that the rule “must be set aside based on its contradictory reading of the same statutory and regulatory language and the fact that the agencies have yet to offer a definitive interpretation of this language that would support the rule.” As such, Judge Bates sent the rule back to HHS for further interpretation.
On October 2, CMS released corrections to several final rules, including:
Fiscal Year 2024 Inpatient Psychiatric Facilities Prospective Payment System, corrections;
Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Policy Changes and Fiscal Year 2024 Rates, corrections;
Inpatient Rehabilitation Facility Prospective Payment System for Federal Fiscal Year 2024 and Updates to the Inpatient Rehabilitation Facility Quality Reporting Program, corrections; and
Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities, corrections.
On October 2, FDA approved Biogen and Bio-Thera's Tofidence, the first biosimilar for the monoclonal antibody Actemra from Genentech. The antibody is used to treat moderate-to-severe rheumatoid arthritis in adults and certain types of juvenile arthritis in children 2 and older.
On October 3, FDA amended the emergency use authorization (EUA) of the Novavax COVID-19 vaccine. Individuals 12 years of age and older previously vaccinated with a COVID-19 vaccine – and who have not already been vaccinated with a recently updated mRNA COVID-19 vaccine –are eligible to receive one dose and unvaccinated individuals receive two doses.
On October 4, HHS, through the Substance Abuse and Mental Health Services Administration (SAMHSA), announced awards of nearly $35 million in grant funding this month to bring essential behavioral health services and HIV prevention and care to historically underserved populations. The awards include: $21.9 million for the Minority AIDS Initiative; $10.5 million for the Minority AIDS Initiative; and $1.9 million for the Minority HIV/AIDS Fund.
On October 4, FDA published new draft guidance to assist sponsors in developing treatments for stimulant use disorders. When finalized, the guidance will be the first to provide FDA’s current thinking on the overall development program and clinical trial design to develop drugs and biologics to support treatment of moderate to severe cocaine use disorder, methamphetamine use disorder and prescription stimulant use disorder.
On October 4, CMS announced that it will hold its semiannual National Stakeholder Call with the CMS Administrator on October 17, 2023, from 1:00 PM (ET) – 2:00 PM (ET). CMS Administrator Chiquita Brooks-LaSure and her leadership team will provide an update on CMS’ recent accomplishments and how they are advancing CMS' Strategic Plan. Registration can be found here.
On October 4, the Centers for Disease Control & Prevention (CDC) announced that it is no longer printing new COVID-19 vaccination cards.
On October 5, HHS’ Office of Research Integrity (ORI) issued a Notice of Proposed Rulemaking (NPRM) to update the 2005 Public Health Service (PHS) Policies on Research Misconduct. The current regulation establishes the requirements for addressing research misconduct in PHS-funded research. Proposed revisions to the policy build upon previous regulations and make improvements to meet the demands of dynamic changes in biomedical and behavioral research. Among other provisions, revisions include: clarifying and adding definitions of key terms to help institutions make research misconduct findings; clarifying responsibilities of HHS, ORI, and PHS-funded institutions and agencies in addressing research misconduct allegations, including assessment, reporting, inquiry, investigation, documentation, and record-keeping; and developing a streamlined appeals process for respondents who wish to dispute ORI’s findings and administrative actions.
On October 5, FDA’s Vaccines and Related Biological Products Advisory Committee voted unanimously to recommend excluding a lineage of influenza B strain from four-strain flu shots as soon as possible.
On October 6, the Drug Enforcement Administration (DEA) stated that it will extend eased pandemic rules for prescribing controlled substances via telemedicine through the end of 2024. DEA stated that for any practitioner-patient telemedicine relationships that have been or will be established on or before November 11, 2023, all telemedicine flexibilities regarding prescription of controlled medications as were in place during the COVID-19 PHE will continue to be permitted through November 11, 2024.
On October 6, HHS, along with the Departments of Labor and the Treasury issued an frequently asked question (FAQ) guidance document regarding implementation of the No Surprises Act qualifying payment amount (QPA) and independent dispute resolution (IDR) portal.
WHITE HOUSE
On October 3, the Biden Administration announced that all manufacturers of all 10 drugs selected for negotiation have signed agreements to participate in the Inflation Reduction Act’s Medicare Drug Price Negotiation Program. In total, the 10 drugs selected for negotiation accounted for $3.4 billion in out-of-pocket costs for an estimated 9 million Medicare enrollees in 2022. These drugs are used to treat heart failure, diabetes, arthritis, cancers, blood clots, and other conditions.
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
CY 2024 Hospital Outpatient PPS Policy Changes and Payment Rates and Ambulatory Surgical Center Payment System Policy Changes and Payment Rates (CMS-1786); Final Rule; 10/2/23
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
OCR
Safeguarding the Rights of Conscience as Protected by Federal Statutes; Final Rule; 9/15/23
REPORTS
Congressional Budget Office
On October 5, CBO issued a blog post calling for new research that shows anti-obesity medications (AOMs) will save money for the broader health care system. CBO notes that there are significant gaps in the literature as it relates to this type of research. CBO adds that although they have yet to formally score obesity-drug coverage legislation, they currently believes a Medicare coverage mandate would cost – not save – the federal government money. CBO notes that they would consider the potential offsetting budgetary savings associated with “improved health outcomes as well as the direct costs of the medications” if new research supports this conclusion.
Office of Inspector General (OIG)
On October 2, OIG released a report examining biosimilars effects on lowering costs for Medicare Part B enrollees. OIG found that biosimilar competition led to decreases in costs for both biosimilars and their reference products. However, OIG notes that many biosimilars remain more affordable than their reference products and could be more widely used. OIG estimates that Part B and enrollee spending could have been reduced in 2021 by $179 million, or 4%, if more affordable biosimilars had been used as frequently as the most-used biosimilars. OIG recommends that to reduce Part B and enrollee spending on biologics, CMS should pursue one or more payment changes that could further realize savings from biosimilars for Part B and enrollees, which could include seeking additional legislative authority, as well as testing alternative payment models under CMMI.
On October 3, OIG released a report examining New Jersey’s compliance with nursing home safety. OIG found that New Jersey could better ensure that nursing homes that participate in Medicare or Medicaid programs comply with Federal requirements for life safety, emergency preparedness, and infection control if additional resources were available. During onsite inspections, OIG identified deficiencies related to life safety, emergency preparedness, or infection control at all 20 nursing homes that were audited, totaling 363 deficiencies. Specifically, OIG found 148 deficiencies related to life safety, 152 deficiencies related to emergency preparedness, and 63 deficiencies related to infection control. As a result, the health and safety of residents, staff, and visitors at the 20 nursing homes are at an increased risk during a fire or other emergency, or in the event of an infectious disease outbreak. OIG recommends that New Jersey follow up with the 20 nursing homes reviewed as part of this audit to ensure that they have taken corrective actions regarding the deficiencies identified in this report and instruct all nursing homes to install carbon monoxide detectors in accordance with New Jersey requirements.
On October 5, OIG released a report examining a Medicare Advantage audit of specific diagnostic codes that Aetna submitted to CMS. OIG found that with respect to the seven high-risk groups covered by the audit, most of the selected diagnosis codes that Aetna submitted to CMS for use in CMS's risk adjustment program did not comply with Federal requirements. For 155 of the 210 sampled enrollee-years, the medical records that Aetna provided did not support the diagnosis codes and resulted in $632,070 in overpayments. On the basis of sample results, OIG estimated that Aetna received at least $25.5 million in overpayments for 2015 and 2016. OIG recommends that Aetna: 1) refund to the Federal Government the $632,070 of overpayments; 2) determine whether the medical records in each case support the diagnosis for the unrelated condition and refund any resulting overpayments to the Federal Government; 3) identify similar instances of noncompliance that occurred before or after the audit period and refund any resulting overpayments to the Federal Government; and 4) continue to examine and improve its compliance procedures.
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
Senate
Finance Committee
October 18; TBD
Hearing examining Medicare Advantage Marketing Practices
OTHER POLICY NEWS
On October 4, more than 75,000 Kaiser Permanente workers across six states and Washington, D.C. begin a three-day walkout that union officials say is the largest health care strike in U.S. history. The Coalition of Kaiser Permanente Unions, representing about 85,000 of the health system’s employees nationally, approved a strike for three days in California, Colorado, Oregon and Washington. The union coalition is demanding higher pay among other benefits, including a strategy to fix a chronic staff shortage that workers say has left them overworked and burnt out.
On October 5, the Reagan-Udall Foundation released a report, commissioned by FDA, detailing strategies for improving public understanding of FDA-regulated products. The report outlines opportunities for the Agency to improve public knowledge and understanding of the Agency and the products it regulates.
On October 5, the Medicare Payment Advisory Commission (MedPAC) held its monthly meetings. The commission discussed updates to Medicare’s payment rates for clinicians, staff ratios and turnover rates in nursing homes, alternative payment methods for inpatient rehabilitation facilities (IRFs), and prices of generic drugs under Part D.