Health Care Watch: November 6, 2023
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from October 29 – November 4. 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 31, Energy & Commerce Committee Chair Cathy McMorris Rodgers (R-WA), Health Subcommittee Health Chairman Brett Guthrie (R-KY), and Oversight & Investigations Subcommittee Chairman Morgan Griffith (R-VA) sent a letter to Centers for Medicare & Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure regarding improper Medicaid payments, including a significant number of payments made to deceased enrollees. The letter states that improper Medicaid payments have been estimated at nearly $360 billion over the past five years. The letter requests specific information regarding the improper payments by November 13.
On October 31, Ways & Means Committee Chairman Jason Smith (R-MO), Energy & Commerce Committee Chair McMorris Rodgers, and Senate Finance Committee Ranking Member Mike Crapo (R-ID) sent a letter to Health & Human Services (HHS) Secretary Xavier Becerra and CMS Administrator Brooks-LaSure calling on the administration to immediately withdraw its proposed mandatory nurse staffing rule and provide justification for its $40.6 billion “unfunded mandate” that, according to the letter, could force many nursing homes to close, threatening resident access to direct care services.
On November 1, Energy & Commerce Committee Chair McMorris Rodgers, Health Subcommittee Chairman Guthrie, and Oversight & Investigations Subcommittee Chairman Griffith, sent a letter to Food & Drug Administration (FDA) Commissioner Robert Califf. The letter follows up on FDA’s responses to the Chairs' May 24, 2023 letter regarding the agency’s laboratory safety. The letter states concerns that the FDA is not meeting important federal safety requirements to protect its employees and the public while also failing to prioritize scientific data quality delivered from FDA laboratories.
Senate
On October 30, Sens. Maggie Hassan (D-NH) and Marsha Blackburn (R-TN) introduced the Extending Access to Addiction Treatment Act, which would permanently expand coverage for medication-assisted treatment for substance use disorder under Medicaid. The SUPPORT Act initially extended such coverage through 2025.
On October 31, Appropriations Committee Chair Patty Murray (D-WA) stated that the committee will call HHS Secretary Becerra and Department of Homeland Security (DHS) Secretary Alejandro Mayorkas before the panel on November 7 to address both foreign and domestic issues including the fentanyl crisis and the needs at the southern border.
On November 1, the Appropriations Committee held a hearing on President Biden’s supplemental funding request, which includes $1.55 billion to support the State Opioid Response grant program.
On November 1, Republican members of the Finance Committee, led by Ranking Member Crapo, sent a letter to CMS Administrator Brooks-LaSure urging the Administration to withdraw certain proposals included in the proposed rule entitled Misclassification of Drugs, Program Administration and Program Integrity Updates Under the Medicaid Drug Rebate Program. The letter notes that many of the proposed changes create fiscal uncertainty for states and risking patient access to the most innovative therapies. Rather than establishing new reporting requirements or altering definitions, the letter asks CMS to work with stakeholders to implement reforms that promote adoption of value-based arrangements and models that improve health outcomes and reduce costs.
On November 1, in an 82-15 vote, the Senate passed the Military Construction-VA, Agriculture-FDA, and Transportation-HUD appropriations bills as part of a bipartisan appropriations package.
On November 2, Finance Committee Chairman Ron Wyden (D-OR) and Ranking Member Crapo released a discussion draft ahead of their November 8 markup of health care extenders, pharmacy benefit managers (PBM) reforms, and mental health legislation. The discussion draft includes provisions that would boost the mental health workforce and reduce drug prices by making Medicare Part D plans offer a high-discount biosimilar on their formulary starting in 2026 and protecting older adults from high cost-sharing for certain medicines starting in 2028 by tying enrollees to some cost-sharing after their deductible phase to the net price instead of the list price.
REGULATORY UPDATE
On October 30, CMS released the 21st Century Cures Act: Establishment of Disincentives for Health Care Providers That Have Committed Information Blocking proposed rule. The proposed rule would implement the provision of the 21st Century Cures Act, specifying that a health care provider that commits information blocking (knowingly and unreasonably interfering with the access, exchange or use of electronic health information), shall be subject to disincentives set forth through rulemaking. The proposed rule would establish disincentives including the loss of 75% of the annual market basket increase for eligible critical access hospitals (CAH), and ineligibility to participate in the program for accountable care organizations (ACOs). A fact sheet detailing the rule can be found here. Comments are due by January 2, 2024.
On October 30, CMS released a notice of Performance Review Board Membership. The notice contains the names of the members serving on the Senior Executive Service (SES) Performance Review Boards (PRBs).
On October 31, CMS released the 2023 HQRP Technical Expert Panel (TEP) Summary Report. This report provides a summary of the TEP’s input on options for HOPE-based quality measure development for the HQRP. The Report covers TEP meetings convened in both 2022 and 2023. The report and additional information can be found here.
On October 31, the Centers for Disease Control & Prevention (CDC) released a new recommendation for babies born to people with hepatitis C. The recommendation states that babies be tested between 2-6 months.
On October 31, FDA’s Cellular, Tissue, and Gene Therapies Advisory Committee discussed a therapy developed by Vertex Pharmaceuticals for sickle cell disease that relies on CRISPR, a technology that allows scientists to edit the genome. The committee stated their support for the technology and called for continued close monitoring of the technology overtime.
On October 31, FDA approved Wezlana (ustekinumab-auub) as a biosimilar to and interchangeable with Stelara (ustekinumab) for multiple inflammatory diseases. Wezlana is approved to treat moderate to severe plaque psoriasis who are candidates for phototherapy or systemic therapy, active psoriatic arthritis, moderately to severely active Crohn’s disease and moderately to severely active ulcerative colitis. HHS Secretary Becerra’s statement regarding the drug’s approval can be found here.
On October 31, HHS issued Take Action for Adolescents: A Call to Action for Adolescent Health and Well-Being a new effort to promote collaboration and spur action to improve the health and well-being of adolescents across the U.S. Take Action for Adolescents outlines a vision, key principles, eight goals, and a set of initial action steps. It is research-based and was developed with extensive input from adult and youth allies and partners, including nationally recognized adolescent health experts. It is accompanied by a Take Action Toolkit with tips and resources to spur collaboration in states and communities.
On November 1, CMS released the Calendar Year (CY) 2024 Home Health Prospective Payment System (HH PPS) Rate Update final rule. The final rule updates Medicare payment policies and rates for Home Health Agencies (HHAs) and includes routine updates to the Medicare Home Health PPS payment rates for CY 2024 in accordance with existing statutory and regulatory requirements. CMS estimates that Medicare payments to HHAs in CY 2024 will increase in the aggregate by 0.8%, or $140 million, compared to CY 2023. A fact sheet detailing the rule can be found here.
On November 2, CMS released the CY 2024 Medicare Physician Fee Schedule (PFS) final rule. CMS finalized a CY 2024 Conversion Factor (CF) of $32.7442, which represents an approximately 3.37% reduction from the final CY 2023 CF of $33.8872. The rule also includes changes to the Medicare Shared Savings Program to further advance CMS’ overall value-based care strategy of growth, alignment, and equity. In total, these changes are expected to increase participation in the Shared Savings Program by roughly 10% to 20%. A fact sheet detailing the rule can be found here.
On November 2, CMS released the Hospital Outpatient Prospective Payment System (OPPS): Remedy for the 340B-Acquired Drug Payment Policy for Calendar Years 2018-2022 final rule. CMS published the final rule to remedy the outpatient payment rates to 340B-acquired drugs (ASP-22.5%) the Supreme Court invalidated in American Hospital Association v. Becerra. Specifically, under the rule, CMS is finalizing the remedy - as proposed - to make a one-time “lump sum” payment to affected 340B covered entity hospitals. As a result of budget neutrality provisions, CMS is also finalizing the proposal to reduce future non-drug item and service payments by adjusting the OPPS conversion factor by minus 0.5% for a period of 16 years. Note, the final rule changes the implementation date of the 0.5% adjustment from CY2025 to CY2026. A fact sheet detailing the rule can be found here.
On November 2, CMS released the CY 2024 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System final rule. The final rule aims to promote health equity, expand access to behavioral health care, improve transparency in the health system, and promote safe, effective, and patient-centered care. The rule finalizes OPPS payment rates for hospitals and ASCs that meet applicable quality reporting requirements by 3.1%. This update is based on the projected hospital market basket percentage increase of 3.3%, reduced by a 0.2 percentage point for the productivity adjustment. A fact sheet detailing the rule can be found here.
WHITE HOUSE
On October 30, the Biden Administration issued an Executive Order (EO) on Safe, Secure, and Trustworthy Artificial Intelligence. The EO aims to establish new standards for AI safety and security, protect Americans’ privacy, advance equity and civil rights, promote innovation and competition, and advances American leadership around the world. The EO directs HHS to:
Craft a strategy in 180 days to determine whether such technology is sufficiently high-quality for use in health care;
Consult with relevant agencies to weigh how nondiscrimination laws might intersect with AI;
Create an AI safety program with a common framework for detecting errors;
Work through grants and other means to advance AI technology for crafting personalized immune response profiles for patients and veterans’ health care;
Identify areas where public/private partnerships could be helpful in product development and create a plan to regulate AI in such applications.
Subsequently, on November 1, the Office of Management and Budget (OMB) released draft guidelines for federal agencies to implement the EO. The guidance highlights two broad directives within the EO: increasing AI talent in the government and making the federal government’s AI use more transparent.
On October 30, the Biden Administration sent a letter to all schools asking them to keep naloxone on hand and to educate students and staff on how to use the opioid overdose reversal drug. The letter will be sent to every state education agency, intergovernmental groups and education associations.
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
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
Interoperability and Prior Authorization for MA Organizations, Medicaid and CHIP Managed Care and State Agencies, FFE QHP Issuers, MIPS Eligible Clinicians, Eligible Hospitals and CAHs (CMS-0057); Final Rule; 10/25/23
Healthcare System Resiliency and Modernization (CMS-3426); Proposed Rule; 10/12/23
FDA
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
Interim Policy on Compounding Using Bulk Drug Substances Under Section 503B of the Federal Food, Drug, and Cosmetic Act; Draft Guidance for Industry; Availability (CDER, 2023-357); Notice; 10/23/23
Interim Policy on Compounding Using Bulk Drug Substances Under Section 503A of the Federal Food, Drug, and Cosmetic Act; Draft Guidance for Industry; Availability (CDER, 2023-356): Notice; 10/23/23
Menu Labeling: Supplemental Guidance for Industry (Edition 2); Draft Guidance for Industry; Notice; 10/31/23
OCR
Safeguarding the Rights of Conscience as Protected by Federal Statutes; Final Rule; 9/15/23
Health Data, Technology, and Interoperability: Certification Program Updates, Algorithm Transparency, and Information Sharing; Final Rule’ 10/19/23
SAMHSA
Medications for the Treatment of Opioid Use Disorder; Final Rule; 10/24/23
REPORTS
Office of Inspector General (OIG)
On October 30, OIG released a report examining the effectiveness of HHS’ oversight of automatic provider relief fund (PRF) payments. OIG found that, generally, HHS' oversight was effective in ensuring that most of the approximately $39.3 billion in automatic PRF payments were properly calculated and disbursed to eligible providers. However, HHS did not ensure that approximately $2.16 billion (5.5%) in automatic PRF payments were properly calculated as intended. OIG also found that HHS did not prevent more than $247 million in payments (less than 1%) from being disbursed to ineligible providers and did not utilize all readily available lists to identify these providers. Specifically, OIG found that HHS did not ensure that all round 1 automatic PRF payments to Medicare providers were properly calculated as intended. OIG made a series of recommendations to Health Resources and Services Administration (HRSA), including that it perform post-payment quality control reviews of selected providers and recoup any overpayments. HRSA concurred with all recommendations.
UPCOMING HEARINGS
House
Energy & Commerce Committee
November 14
Markup
Ways & Means Committee
TBD
Markup of drug and device legislation and hearing on the status of CMMI
Senate
Finance Committee
November 8; 10:00 AM
Markup up legislation extending existing health care policies under the committee’s jurisdiction, including mental health and pharmacy benefit manager policies
HELP Committee
Subcommittee on Primary Health and Retirement Security
November 8; 2:30; SD-430
Avoiding a Cautionary Tale: Policy Considerations for Artificial Intelligence in Health Care
Witnesses: Dr. Thomas Inglesby, Director, Johns Hopkins Center for Health Security; Dr. Kenneth Mandl, Harvard Professor and Director, Computational Health Informatics Program, Boston Children’s Hospital; Christine Huberty, Supervising Attorney, Greater Wisconsin Agency on Aging Resources; Dr. Keith Sale, Vice President and Chief Physician Executive of Ambulatory Services, The University of Kansas Health System
Judiciary Committee
November 7; 10:00 AM; 226 Dirksen
Social Media and the Teen Mental Health Crisis
Appropriations Committee
November 8; 9:00 AM; 106 Dirksen
A Review of the President’s Supplemental Request for the Departments of Health and Human Services and Homeland Security
Witnesses: Xavier Becerra, Secretary, HHS; Alejandro Mayorkas, Secretary, DHS
OTHER POLICY NEWS
On November 2 and 3, the Medicare Payment Advisory Commission (MedPAC) held its monthly public meetings. Topics included rural emergency hospitals, dual-eligible special needs plans, the MedPAC work plan, Medicaid coverage of and payment for software as a medical device, favorable selection in MA, and evaluating access in MA. More information about topics and meetings can be found here.