Health Care Watch: November 4, 2024
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from October 27 – November 3. 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
The House returns from recess on November 12.
Senate
On October 29, Finance Committee Chairman Ron Wyden (D-OR), House Energy & Commerce Ranking Member Frank Pallone (D-NJ), and Ways & Means Committee Ranking Member Richard Neal (D-MA) sent a letter to Centers for Medicare & Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure expressing concerns with ongoing problems in the Medicare Advantage (MA) program. The letter raises concerns about the growing use of prior authorization to deny or delay care and the use of algorithms and artificial intelligence (AI) tools to make coverage determinations. The letter also highlights shortfalls among MA plans regarding core Medicare medical benefits and access to providers.
On October 29, the Judiciary Committee held a field hearing in Chicago, IL, entitled Reducing Prescription Drug Prices: How Competition Can Make Medications Affordable for Patients. The hearing included two witness panels with Members of Congress from Illinois and advocates for prescription drug pricing reform. The hearing examined recent legislative successes to address anti-competitive tactics that make medications unaffordable for patients.
On November 1, Health, Education, Labor & Pensions (HELP) Committee Ranking Member Bill Cassidy (R-LA) and Sen. Maggie Hassan (D-NH) released a bipartisan framework on site neutral payments. The framework includes provisions that would install one rate for common services provided outside of a hospital as well as remove a grandfathering provision for a separate site-neutral pay cut installed in the Bipartisan Budget Act of 2015. The framework states that savings generated through site neutral payments could be used to help rural safety-net hospitals.
The Senate returns from recess on November 12.
REGULATORY UPDATE
On October 28, CMS announced the third and final cohort of states to participate in the states Advancing All-Payer Health Equity Approaches and Development (AHEAD) Model. State participants for all three cohorts are: Cohort 1 (Maryland and Vermont); Cohort 2 (Connecticut and Hawaii); and Cohort 3 (sub-state region of New York and Rhode Island). Under the AHEAD Model, CMS and participating states will work collaboratively to curb health care cost growth, improve population health through investments in primary care, and advance health equity by addressing disparities in health outcomes.
On October 28, FDA announced a hybrid meeting entitled In Vitro Diagnostics (IVD) Roundtable. The meeting will be held on November 12, 2024, at 10:00 AM ET and will provide a forum to facilitate communication between FDA and the IVD industry. Registration can be found here.
On October 29, the Food & Drug Administration (FDA) approved ROXYBOND™ (oxycodone hydrochloride) immediate-release (IR) CII 10 mg tablet for the management of pain severe enough to require an opioid analgesic and for which alternative treatments are inadequate. ROXYBOND is the first and only FDA-approved abuse-deterrent IR 10 mg oxycodone formulation that is expected to reduce abuse by intranasal and intravenous routes.
On October 29, FDA's Pharmacy Compounding Advisory Committee recommended that FDA forbid Makena, a preterm birth drug pulled from the market last year, from being compounded. The recommendation follows FDA’s Office of New Drugs’ finding that all hydroxyprogesterone caproate products intended for reducing preterm birth risks in people carrying one fetus should be on the agency’s “Withdrawn or Removed” list.
On October 29, CMS announced that the Medicare Shared Savings Program yielded more than $2.1 billion in net savings in 2023 — the largest savings in the Shared Savings Program’s history. Additionally, CMS stated that Shared Savings Program Accountable Care Organizations (ACOs) are providing higher-quality care and supporting policies CMS has adopted to enhance primary care, expand access to accountable care to underserved communities, and prioritize quality care for common chronic conditions. In 2023, ACOs in the Shared Savings Program earned shared savings payments totaling $3.1 billion, the highest since the program’s inception.
On October 30, FDA updated its drug shortage website to state that Novo Nordisk’s diabetes drug Ozempic and obesity treatment Wegovy are now available in all doses. However, while all doses of the treatment are available, the active ingredient in both medications, semaglutide, is still considered to be in shortage according to FDA.
On October 30, CMS released a National Coverage Analysis (NCA) of implanted pulmonary artery pressure sensor for heart failure management. The posted proposed decision memo can be found here.
On October 31, the Consumer Financial Protection Bureau (CFPB) and CMS released a joint statement regarding actions being taken to stop illegal billing of lowest-income Medicare recipients, known as Qualified Medicare Beneficiaries (QMBs). The joint statement describes guidance from CMS and explains how the laws that the CFPB administers and enforces apply to improper debt collection of QMBs. Specifically, the statement explains that: 1) debt collectors may not collect on improper and inaccurate bills targeting Medicare beneficiaries; and 2) debt collectors may not tarnish credit reports with improper and inaccurate bills.
On October 31, the Department of Health & Human Services’ (HHS’) Agency for Healthcare Research and Quality (AHRQ) announced a meeting to discuss implementation of the Executive Order to establish the AI in Healthcare Safety Program. The meeting will take place virtually on November 15, 2024, from 12:30 to 4:00 PM ET. More information regarding the meeting can be found here.
On October 31, FDA announced that it will hold a public meeting to discuss the reauthorization of the Over-the-Counter Monograph Drug User Fee Program. The meeting will take place on November 20, 2024, from 9:00 AM to 12:30 PM ET. Registration can be found here.
On November 1, the first day of open enrollment began for health insurance in the Affordable Care Act Marketplace.
On November 1, CMS released the Calendar Year (CY) 2025 Medicare Physician Fee Schedule (PFS) Final Rule. The final rule reduces average payment rates by 2.93% in CY 2025. The change to the PFS conversion factor incorporates the 0% overall update, the expiration of the temporary 2.93% increase in payment for CY 2024, and a relatively small estimated 0.02% adjustment necessary to account for changes in work relative value units (RVUs) for some services. This amounts to an estimated CY 2025 PFS conversion factor of $32.35, a decrease of $0.94 (or 2.83%) from the current CY 2024 conversion factor of $33.29. The rule also finalizes proposals to: 1) establish new coding and payment for caregiver training for direct care services and supports; 2) allow payment of the O/O E/M visit complexity add-on code; 3) add several services to the Medicare Telehealth Services List, including caregiver training services on a provisional basis and PrEP counseling and safety planning interventions on a permanent basis; and 4) establish coding and payment under the PFS for a new set of Advanced Primary Care Management Services (APCM) services. Additionally, the rule finalizes policies to establish a new “prepaid shared savings” option to encourage investments by eligible ACOs. A fact sheet detailing the final rule can be found here. A fact sheet detailing the Medicare Shared Savings Program provisions in the final rule can be found here. Congress may seek attempt to mitigate the conversion factor reduction during the lame duck.
On November 1, CMS released the CY 2025 End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) Final Rule. For CY 2025, CMS is increasing the ESRD PPS base rate to $273.82, which CMS expects will increase total payments to all ESRD facilities by approximately 2.7%. The CY 2025 ESRD PPS final rule also includes changes to the methodology for calculating the ESRD facility wage index, changes to the Low-Volume Payment Adjustment (LVPA) methodology, and several changes to the ESRD outlier policy. The rule also finalizes an update to the acute kidney injury (AKI) dialysis payment rate for renal dialysis services furnished by ESRD facilities for CY 2025 and extends Medicare payment to dialysis in the home setting for beneficiaries with AKI. Additionally, the final rule modifies how CMS will calculate the Transitional Drug Add-on Payment Adjustment (TDAPA) for oral-only phosphate binders beginning January 1, 2025. Finally, the rule updates requirements for the ESRD Quality Incentive Program (QIP), ESRD Facility Conditions for Coverage, and ESRD Treatment Choices Model. A fact sheet detailing the final rule can be found here.
On November 1, CMS released the CY 2025 Home Health PPS Final Rule. The CY 2025 updated rates include the final CY 2025 home health payment update of 2.7% ($445 million increase), which is offset by an estimated 1.8% decrease that reflects the permanent behavior adjustment ($295 million decrease) and an estimated 0.4% decrease that reflects the updated FDL ($65 million decrease). CMS estimates that Medicare payments to home health agencies (HHAs) in CY 2025 would increase in the aggregate by 0.5%, or $85 million, compared to CY 2024, based on the finalized policies. The rule finalizes a permanent prospective adjustment of -1.975% to the CY 2025 home health payment rate to account for the impact of implementing the Patient-Driven Groupings Model (PDGM). The rule also finalizes: 1) a crosswalk for mapping responses on the current Outcome and Assessment Information Set-E (OASIS-E); 2) the most recent Office of Management and Budget (OMB) Core-Based Statistical Area (CBSA) delineations for the home health wage index; and 3) the rate update for the CY 2025 intravenous immune globulin (IVIG) items and services’ payment under the IVIG benefit. Finally, the rule finalizing updates to the HHA Conditions of Participation (CoPs) to reduce avoidable care delays by helping ensure that referring entities and prospective patients can select the most appropriate HHA based on their care needs. A fact sheet detailing the final rule can be found here.
On November 1, CMS released the CY 2025 Medicare Hospital Outpatient PPS and Ambulatory Surgical Center Payment System Final Rule. CMS finalized an update to OPPS payment rates of 2.9% for hospitals that meet applicable quality reporting requirements. This update is based on the projected hospital market basket percentage increase of 3.4% reduced by a 0.5 percentage point productivity adjustment. For CY 2025, CMS is maintaining the calculation of both hospital outpatient department and Community Mental Health Centers Intensive Outpatient Program (CMHC IOP) payment rates for three services per day and four or more services per day based on cost per day using OPPS data that includes Partial Hospitalization Program (PHP) and non-PHP days. The rule also finalizes the implementation of Section 4135 of the Consolidated Appropriations Act (CAA), 2023, which provides temporary additional payments for certain non-opioid treatments for pain relief in the hospital outpatient department (HOPD). Finally, the rule includes provisions that respond to the maternal health crisis, address health disparities, expand access to behavioral health care, improve transparency in the health system, and promote safe, effective, and patient-centered care. A fact sheet detailing the final rule can be found here.
WHITE HOUSE
On October 28, President Biden announced that the Cancer Moonshot initiative will launch a pilot program to maintain uninterrupted access to seven pre-selected critical pediatric cancer medications. Pilot participants will develop stewardship standards focused on identifying shortage risks, promoting transparent inventory awareness, and fostering an effective approach to prevent patient care disruptions and maintain consistent drug distribution to children and families facing cancer. The pilot will launch before the end of the year and run into 2025.
On October 30, the Biden Administration released a fact sheet detailing key AI accomplishments in the year since President Biden issued an Executive Order on AI management, innovation, and risk. Health care related accomplishments included HHS’s establishment of an AI Safety Program to track harmful incidents involving AI’s use in healthcare settings and to evaluate mitigations for those harms.
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); Final Rule; 9/20/24
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
Communications From Firms to Health Care Providers Regarding Scientific Information on Unapproved Uses of Approved/Cleared Medical Products: Questions and Answers; Guidance for Industry (2023-663); Notice; 10/23/24
Validation of Certain In Vitro Diagnostic Devices for Emerging Pathogens During a Section 564 Declared Emergency; Draft Guidance for Industry and Food and Drug Administration Staff; Availability; Notice; 10/29/24
REPORTS
Office of Inspector General (OIG)
On October 29, OIG released a report examining the Administration for Strategic Preparedness and Response’s (ASPRs) controls for maintaining physical and inventory records for the Strategic National Stockpile. OIG found that ASPR established adequate controls for maintaining physical security and inventory records at Stockpile Site B. OIG stated that ASPR actively monitors the site's camera systems and restricts access to the site to maintain physical security. OIG identified no discrepancies during the inventory review and were able to accurately locate and identify each sample item. OIG made no recommendations.
ADDITIONAL POLICY NEWS
On October 31, Baxter Inc. announced that it has restarted IV solution manufacturing at its North Cove, North Carolina facility following Hurricane Helene.
On November 7 and 8, the Medicare Payment Advisory Commission (MedPAC) will hold its November public meetings. Meetings will discuss topics including the PFS, participation bonus for clinicians in advanced alternative payment models, structural differences between the Part D and MA markets, MA provider networks, and coverage limits on stays in freestanding inpatient psychiatric facilities. All meeting times and topics can be found here.