Health Care Watch: December 10, 2024
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from November 29 – December 7. 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 December 2, the Select Subcommittee on the Coronavirus Pandemic concluded its two-year investigation into the COVID-19 pandemic and released a final report entitled After Action Review of the COVID-19 Pandemic: The Lessons Learned and a Path Forward. The report concludes that COVID-19 “most likely” emerged from a Chinese laboratory, citing the virus’s unusual biological characteristics and reports of Wuhan researchers falling ill in late 2019. The report also details accusations against former National Institute of Allergy and Infectious Diseases (NIAID) Director Anthony Fauci, stating that he misled the committee about gain-of-function research. On December 5, the Select Subcommittee on the Coronavirus Pandemic voted to endorse the final report.
On December 4, House Republicans released an end-of-year stopgap funding proposal. The package includes various health provisions such as a three-year reauthorization of telehealth and hospital-at-home flexibilities for Medicare beneficiaries, a one-year physician payment adjustment of 2.5%, flat funding for community health centers (CHC), and full reauthorizations of the SUPPORT Act and the Pandemic and All-Hazards Preparedness Act. The package proposes to offset spending by repealing the Biden Administration’s nursing home staffing rule, as well as delinking pharmacy benefit manager (PBM) transparency provisions from Medicare Part D. Current government funding runs out on December 20, 2024.
On December 5, House Majority Leader Steve Scalise (R-LA) and incoming Senate Majority Leader John Thune (R-SD) released the 2025 congressional calendars for their respective chambers. The full year calendar for both chambers can be found here.
On December 5, in a 399 to 1 vote, the House reauthorized the Office of National Drug Control Policy (ONDCP) until 2031. The ONDCP coordinates the U.S. drug control policy across 19 federal agencies and oversees a $41 billion budget.
On December 5, House Democrats countered Republican’s proposed stopgap funding package. The Democrat’s proposal totals $31 billion and keeps some of the Republican proposal provisions such as the 2.5% physician payment adjustment. It also includes a two-year extension of all Medicare and Medicaid extenders, including telehealth, increased funding to CHCs, and a 1-year clean extension of the enhanced advanced premium tax credits (APTCs). The proposal strikes the $22 billion nursing home staffing rule repeal and replaces it with other offsets including $12.3b in sequester funds.
Senate
On December 5, the Health, Education, Labor & Pensions (HELP) Committee held a hearing entitled What Is the FDA Doing to Reduce the Diabetes and Obesity Epidemics in America and Take on the Greed of the Food and Beverage Industry? The hearing discussed actions to better address the prevalence of obesity and diabetes and heard testimony from Food and Drug Administration (FDA) Commissioner Robert Califf and FDA Deputy Commissioner Jim Jones.
REGULATORY UPDATE
On December 4, FDA finalized guidance entitled Marketing Submission Recommendations for a Predetermined Change Control Plan for Artificial Intelligence (AI)-Enabled Device Software Functions. The guidance aims to simplify the process for approving medical devices that use AI by noting that manufacturers can seek approval to make changes to their AI-enabled products without having to file a new submission to show the device is safe and effective.
On December 4, the Department of Health and Human Services (HHS) announced that manufacturers of FDA-approved gene therapies for sickle cell disease (LYFGENIA™ and CASGEVY™) have entered into agreements with the Centers for Medicare & Medicaid Services (CMS) to participate in the Cell and Gene Therapy (CGT) Access Model. The CGT Access Model, run by CMS’ Center for Medicare and Medicaid Innovation (CMMI), is a voluntary model that will test outcomes-based agreements for cell and gene therapies, with the goal of improving health outcomes, increasing access to cell and gene therapies, and lowering health care costs.
On December 4, CMS released a snapshot of the 2025 marketplace open enrollment. CMS reported that nearly 988,000 consumers who do not currently have health care coverage through the individual market Marketplace have signed up for plan year 2025 coverage. Additionally, CMS stated that nearly 4.4 million existing consumers have already returned to the Marketplace to select a plan for 2025.
On December 5, HHS, through the Office of Global Affairs (OGA), launched a new Global Strategy to promote innovation, cooperation, and equity with regards to disease and outbreak foundational support. The strategy is comprised of three main goals: 1) advancing United States interests and leadership in health, human services, and security through international policy; 2) leveraging technical expertise in science, technology, and practice through partnership to improve global health, well-being, and health access; and 3) protecting and promoting the health and well-being of all Americans through international preparedness and response.
On December 5, HHS’s Office for Civil Rights (OCR) issued a Dear Colleague letter to help federally funded health care providers, plan grantees, and others better understand their civil rights obligations under the new final rule on Section 1557 of the Affordable Care Act. Section 1557 provides nondiscrimination protections by requiring covered entities to provide language assistance to individuals with limited English proficiency (LEP) or disability.
On December 5, HHS and the National Action Alliance for Patient and Workforce Safety (NAA) launched the National Healthcare Safety Dashboard, an online resource that aggregates hospital safety data from four primary measurement sources. The dashboard aims to create one comprehensive resource to promote understanding of the current state of patient and workforce safety.
On December 11, CMS will host the New Technology Add-on Payment (NTAP) Town Hall to hear FY 2026 NTAP applicants present on substantial clinical improvement (SCI) claims in support of their technologies. The Town Hall agenda and registration information can be found here.
WHITE HOUSE
On December 5, President-elect Donald Trump named David Sacks, former Chief Operating Officer of PayPal, as “White House AI & Crypto Czar.” David Sacks will lead the President's Council of Advisors on Science and Technology.
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
Advance Notice of Methodological Changes for CY 2026 for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies + Draft CY 2026 Part D Redesign Program Instructions; Notice; 11/26/24
FDA
Nonprescription Drug Product With an Additional Condition for Nonprescription Use; Final Rule; 9/24/24
Considerations for Including Biopsies in Clinical Trials; Draft Guidance for Industry, Investigators, Institutions, and Institutional Review Boards; Notice; 9/27/24
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
ASTP ONC
Health Data, Technology, and Interoperability: Patient Engagement, Information Sharing, and Public Health Interoperability; Final Rule; 11/22/24
REPORTS
Office of Inspector General (OIG)
On December 3, OIG released a report examining the Organ Procurement and Transplantation Network (OPTN) IT system’s cybersecurity controls. OIG found that cybersecurity controls protecting the OPTN IT system were effective in preventing certain simulated cyberattacks, but the network monitoring of the OPTN IT system was not able to detect or respond appropriately to most of OIG’s simulated cyberattacks. OIG determined that it would likely take an attacker with a moderate level of sophistication to be able to compromise the OPTN IT system or data and cause significant harm. Additionally, OIG identified 22 vulnerabilities associated with 16 cybersecurity controls, mostly related to network monitoring. OIG recommends that HRSA require the OPTN IT system contractor to: 1) remediate the 22 vulnerabilities identified during the audit; 2) verify that the vulnerabilities were remediated; 3) require the contractor to improve network monitoring of the OPTN IT system; and 4) implement procedures to help ensure that the OPTN IT system contractor is adhering to federally required cybersecurity controls policies and standards on a continuing basis.
On December 3, OIG released a report examining nonprofit and government-owned nursing homes compliance with federal requirements regarding the infection preventionist (IP) position. OIG found that three nonprofit and two Government-owned nursing homes may not have complied with the requirement that the IPs complete specialized infection prevention and control training prior to assuming the IP role. OIG estimates that 117 nursing homes nationwide may not have complied with Federal regulations pertaining to IPs during the audit period resulting in increased health and safety risks for the residents and staff of these nursing homes. OIG recommends that CMS instruct the State survey agencies to follow up with the five nursing homes that may not have complied with Federal requirements to verify that they have taken corrective actions.
Government Accountability Office (GAO)
On December 4, GAO released a report examining advanced premium tax credits. GAO found that CMS has limited assurance that APTCs exclude certain state benefit costs. Specifically, GAO stated that CMS does not collect information on states that have identified non-essential health benefits (EHB) mandated benefits, however, through interviews with relevant national organizations, GAO found at least six states that identified non-EHB mandated benefits. These states' mandated benefits included pediatric hearing aids and fertility care. GAO stated that CMS officials said that states frequently reach out to them for assistance, including asking them for advice on whether a benefit requirement they are considering would be a non-EHB mandated benefit. However, CMS has not assessed whether its oversight approach is sufficient, and thus, has limited assurance that the APTC amounts exclude the costs of non-EHB mandated benefits. GAO stated that this poses a risk to its oversight objective and is inconsistent with federal internal control standards that call for identifying, analyzing, and responding to risks related to achieving agency objectives. GAO recommends that CMS conduct a risk assessment to determine whether its oversight approach is sufficient to ensure that APTCs exclude the costs of non-EHB mandated benefits or whether additional oversight is needed.
Congressional Budget Office (CBO)
On December 5, CBO released a report examining the effects of not extending the expanded premium tax credits on the number of uninsured people and the growth in premiums. CBO projects that without a permanent extension, gross benchmark premiums would rise by 4.3% in 2026, 7.7% in 2027 and 7.9% on average between 2026 and 2034. Additionally, CBO predicts that the number of people who are uninsured would rise by 2.2 million in 2026, 3.7 million in 2027 and 3.8 million on average between 2026 and 2034. The report comes in response to a request, from Finance Committee Chairman Ron Wyden (D-OR), Senator Jeanne Shaheen (D-NH), and Reps. Richard E. Neal (D-MA) and Lauren Underwood (D-IL), for CBO to discuss the effects on health insurance coverage and premiums that will result from not extending the expanded premium tax credit structure.
ADDITIONAL POLICY NEWS
On November 26, Bristol Myers Squibb (BMS) filed a lawsuit in the U.S. District Court for D.C. challenging Health Resources and Service Administration’s (HRSA) determination that BMS’ intended rebate model to discount 340B drugs would be inconsistent with the statute. In the complaint, BMS noted that to at least “to start” – they intended to implement the rebate model exclusively for Eliquis. They met with HRSA on October 22 to talk about their rebate model, and on November 4, HRSA declined to approve the model. The lawsuit follows recent similar lawsuits from Eli Lilly and Johnson & Johnson on their proposed 340B rebate models.
On December 4, FDA announced that empty IV bags of all sizes have been added to its Medical Device Shortages List. FDA stated that the shortage is estimated to last through March.
On December 12 and 13, the Medicare Payment Advisory Commission (MedPAC) will host its December public meetings. Meetings will discuss payment adequacy of physician and other health professional services, hospital inpatient and outpatient services and rural emergency hospitals, skilled nursing facilities (SNFs), inpatient rehabilitation facilities (IRFs), home health care services, hospice services, and outpatient dialysis services. More information regarding times and topics of discussion can be found here.