Health Care Watch: December 23, 2023

The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from December 17 – December 23. 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.

NOTE:  Due to the holidays, the FHP Weekly Health Care Watch will not publish next week and will resume on January 6.  Happy Holidays!

LEGISLATIVE UPDATE

House

• The House returns on January 9, 2024.

Senate

• On December 18, Health, Education, Labor & Pensions (HELP) Committee Ranking Member Bill Cassidy (R-LA) released a statement highlighting the 115 organizations who have called on Congress to reauthorize the bipartisan Pandemic and All-Hazards Preparedness Act (PAHPA). The statement urges Congress to reauthorize PAHPA.

• The Senate returns on January 8, 2024.

REGULATORY UPDATE

• On December 18, the Department of Health & Human Services (HHS) released new data on state Medicaid and Children’s Health Insurance Program (CHIP) enrollment changes among children and youth since full eligibility renewals for these programs restarted earlier this year. According to the data, states that have taken up more of the federal strategies provided by the Centers for Medicare & Medicaid Services (CMS) and prioritized auto-renewals have helped more eligible children renew Medicaid and CHIP coverage. Additionally, HHS stated that more than 88 million people, including nearly 40 million children and youth, were enrolled in Medicaid and CHIP coverage as of September 2023. Additional analysis on enrollment changes can be found here.

• HHS Secretary Xavier Becerra also sent letters to the governors of nine states — Arkansas, Florida, Georgia, Idaho, Montana, New Hampshire, Ohio, South Dakota, and Texas — which the Biden administration says are responsible for 60% of children’s Medicaid and CHIP coverage losses between March and September. The letters ask that the states adopt certain federal rules to make it easier to bring the children back onto coverage.

• On December 18, the Food & Drug Administration’s (FDA) drug and biologic centers announced that the agency plans to expand its number of in-person meetings. Beginning on January 22, 2024, companies will be able to request that meetings on the Prescription Drug User Fee Act, the Biosimilar User Fee Act and the Over-The-Counter Monograph Drug User Fee Program be held in person.

• On December 18, HHS and the Departments of Labor and the Treasury released the Federal Independent Dispute Resolution (IDR) Process Administrative Fee and Certified IDR Entity Fee Ranges final rule. The rule finalizes fees associated with use of the Federal IDR process under the No Surprises Act. The Federal IDR is intended to provide a process when parties (i.e., plans and issuers and providers, facilities, and providers of air ambulance services) cannot agree on an appropriate payment amount for out-of-network items and services, they may enter into the Federal IDR process to determine the appropriate payment amount. The final rule states that for disputes initiated on or after the effective date of the rule, January 1, 2025, the Departments are finalizing a certified IDR entity fee range of $200-$840 for single determinations and $268-$1,173 for batched determinations.

• On December 18, the Department of Labor released a proposed rule that would rescind the 2018 Association Health Plan (AHP) rule and reexamine the criteria that groups or associations of employers must meet to sponsor an association health plan. The Labor Department stated that it believes that the provisions of the 2018 AHP Rule that the district court set aside as inconsistent with the Administrative Procedure Act and exceed the department’s authority are inconsistent with the best reading of the statutory requirements governing group health plans.

• On December 18, FDA issued draft guidance, Use of Real-World Evidence to Support Regulatory Decision-Making for Medical Devices. The draft guidance is an update to the current final guidance to propose clarification about how FDA evaluates real-world data to determine whether they are of sufficient quality for generating real-world evidence that can be used in the FDA’s regulatory decision-making for medical devices. The guidance also proposes expanded recommendations to sponsors considering using real-world evidence to support regulatory submissions for medical devices.

• On December 19, FDA approved the first test that uses DNA in assessing whether certain individuals may have an elevated risk of developing opioid use disorder. As part of a clinical evaluation, the AutoGenomics Inc. AvertD test is intended to be used prior to first exposure to oral opioid pain medications in patients being considered for a 4-30 day prescription for the treatment of acute pain, such as in patients scheduled to undergo a planned surgical procedure. The AvertD test, a prescription-use only genetic laboratory test for patients 18 years and older, is to be used only with patients who consent to the test and have no prior use of oral opioid analgesics.

• On December 20, the HHS Office of Inspector General (OIG) released a favorable advisory opinion, 23-10, regarding the use of a "preferred hospital" network as part of Medicare Supplemental Health Insurance (Medigap) policies, whereby an insurance company would contract with a preferred hospital organization to provide discounts on the otherwise-applicable Medicare inpatient deductibles for its policyholders and, in turn, would provide a premium credit of $100 off the next renewal premium to policyholders who use a network hospital for an inpatient stay.

• On December 20, HHS announced that as of December 15, 2023, for HealthCare.gov states and December 9, 2023, for State-based Marketplaces, preliminary data projects that over 19 million consumers will enroll in 2024 coverage through Affordable Care Act (ACA) Marketplaces. This includes 15.3 million individuals who have selected a health plan using the HealthCare.gov platform.

• On December 21, HHS and the U.S. General Services Administration (GSA) announced the first updated guidelines for safety stations in federal facilities in the past 15 years. The guidelines expand the existing recommendation beyond automated external defibrillators (AED) to also include opioid reversal agents such as naloxone and hemorrhagic control such as Stop the Bleed® (STB). Additionally, the guidelines introduce the “safety station,” which would enable anyone located within a federal facility to access the necessary tools quickly and easily to respond to an emergency situation. Under the new recommendation, anywhere that an AED was previously located can and should be converted to a safety station.

• On December 21, CMS released the Medicare Program: Appeal Rights for Certain Changes in Patient Status proposed rule. The proposed rule would implement an order from the Federal district court for the District of Connecticut in Alexander v. Azar that requires HHS to establish appeals processes for certain Medicare beneficiaries who are initially admitted as hospital inpatients but are subsequently reclassified as outpatients receiving observation services during their hospital stay and meet other eligibility criteria. Comments are due by February 25, 2025.

• On December 21, FDA released a final rule that updates the requirements for participation in a clinical trial. The final rule allows an exception from the requirement to obtain informed consent when a clinical investigation poses no more than minimal risk to the human subject and includes appropriate safeguards to protect the rights, safety, and welfare of human subjects. The final rule permits an institutional review board (IRB) to waive or alter certain informed consent elements or to waive the requirement to obtain informed consent, under limited conditions, for certain FDA-regulated minimal risk clinical investigations.

WHITE HOUSE

• On December 19, President Biden signed into law H.R. 1734, the Testing, Rapid Analysis, and Narcotic Quality Research Act of 2023 or the TRANQ Research Act of 2023. The legislation requires the Department of Commerce’s National Institute of Standards and Technology to support research and other activities related to identifying xylazine, novel synthetic opioids, and other new psychoactive substances.

RULES AT THE WHITE HOUSE OFFICE OF MANAGEMENT & BUDGET (OMB)

Pending Review

ASPR

• Health Resources Priority and Allocations System (HRPAS); Final Rule; 11/17/23

CMS

• Strengthening Oversight of Accrediting Organizations (AO) and Preventing AO Conflict of Interest, and Related Provisions (CMS-3367); Proposed Rule; 12/27/22

• 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

• Alternative Payment Model Updates; Increasing Organ Transplant Access (IOTA) Model (CMS-5535); Proposed Rule; 11/9/23

• Advance Notice of Methodological Changes for Calendar Year 2025 for Medicare Advantage Capitation Rates and Part C and Part D Payment Policies & Draft CY 2025 Part D Redesign Program Instructions; Proposed Rule; 12/1/23

• Disproportionate Share Hospital (DSH) Third Party Payer (CMS-2445); Final Rule; 12/8/23

• Streamlining the Medicaid, CHIP, and BHP Application, Eligibility Determination, Enrollment, and Renewal Processes (CMS-2421); Final Rule’ 12/19/23

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

• Collection of Race and Ethnicity Data in Clinical Trials and Clinical Studies for FDA-Regulated Medical Products; Revised Draft Guidance for Industry (CDER, 2023-36); Notice; 12/1/23

• Medical Devices; Quality System Regulation Amendments; Final Rule; 12/6/23

OCR

• Safeguarding the Rights of Conscience as Protected by Federal Statutes; Final Rule; 9/15/23

• Confidentiality of Substance Use Disorder Patient Records; Final Rule; 12/4/23

SAMHSA

• Medications for the Treatment of Opioid Use Disorder; Final Rule; 10/24/23

REPORTS

Congressional Budget Office (CBO)

• On December 20, the CBO released a blog post calling for more research on how changes in drugmakers' expected profits could impact drug development and changes in the number of new drugs could impact health outcomes. CBO also stated that it is interested in research on how policies such as price negotiation and accelerated approval could influence drugmakers’ thinking on what conditions to target.

• On December 21, CBO issued a response letter to House Budget Committee Chairman Jodey Arrington (R-TX) and Rep. Michael Burgess (R-TX) regarding its analysis related to the Inflation Reduction Act’s (IRA’s) development of new drugs. CBO had previously estimated that 13 fewer drugs would come to market over the next 30 years as a result of the IRA.

Office of Inspector General (OIG)

• On December 18, OIG released a report examining the provider relief fund’s (PRF) effects on nursing home maintenance of services during the COVID-19 pandemic. OIG found that nursing homes reported that payments were integral to maintaining services during the COVID-19 pandemic, but that guidance from the Health Resources and Services Administration (HRSA) about the payments and reporting requirements was often difficult to use. OIG stated that the nursing homes included in the report generally complied with the reporting requirements, but some appeared to misreport data or had to resubmit information. Nursing home leaders reported that it was difficult to find time to review lengthy reporting guidance, and that completing the reports was a burden. OIG recommends that HRSA: 1) create a document to record lessons learned from managing PRF and submit the document to HHS leadership; and 2) expedite audits of provider use of PRF payments.

• On December 19, OIG released a report examining HHS’s Protect.HHS.gov (HHS Protect) project. HHS Protect was established to collect and report critical data from States, communities, and hospitals to be used in the Federal response to the COVID-19 pandemic. OIG found that HHS did not ensure that select cybersecurity controls were in place prior to the launch of HHS Protect. Specifically, HHS had not completed a privacy impact assessment, risk assessment, security categorization process, system security plan, and contingency plan. Additionally, HHS had not completed the Federal Risk and Authorization Management Program (FedRAMP) security assessment and authorization tasks for its contractor's cloud service that provided HHS access to and use of hospital data collected via the U.S. Healthcare COVID 19 Portal. HHS closed all three recommendations from this report.

• On December 19, OIG released a report examining the National Institutes of Health (NIH) compliance with audit requirements for extramural grants. OIG found that NIH did not consistently ensure that recipients took appropriate and timely corrective action on single audit findings, as required by Federal regulation. Specifically, for over half of the single audits in the review, NIH did not issue management decision letters (MDLs) that met the required 6-month deadline to document that it had assessed whether recipients were taking corrective actions to address single audit findings. On average, late MDLs were about 10 months beyond the 6-month deadline. Further, NIH did not use a risk-based approach to prioritize single audit findings, as encouraged by HHS policy, despite multiple audits having factors identified by HHS policy as high-risk. OIG recommends that NIH: 1) ensure that the 6-month requirement for issuing MDLs for all single audits is met; 2) use risk to prioritize the issuance of MDLs; 3) ensure that relevant single audit data are available and used by NIH staff to inform decisions about new and ongoing awards; and 4) track the effectiveness of single audit processes and single audits' use.

• On December 22, OIG released a report examining Medicare Part B spending on clinical diagnostic laboratory test in 2022. OIG found that Medicare Part B spending on clinical diagnostic laboratory tests decreased by 10% from lab test spending in 2021. OIG noted that because payment rates for individual lab tests did not change in 2021 and 2022, changes in spending were primarily driven by changes in the volume of tests. OIG made no recommendations.

Government Accountability Office (GAO)

• On December 21, GAO released a report examining medical device cybersecurity. GAO found that cybersecurity incidents in hospitals do not show that medical device vulnerabilities have been common exploits. However, GAO stated that, HHS maintains that such devices are a source of cybersecurity concern warranting significant attention and can introduce threats to hospital cybersecurity. Additionally, GAO found that key agencies are also managing medical device cybersecurity through active coordination. Specifically, FDA and the Cybersecurity and Infrastructure Security Agency (CISA) developed an agreement addressing most leading practices for collaboration. GAO recommends that FDA and CISA update their agreement to reflect organizational and procedural changes that have occurred. Both agencies concurred with the recommendations.

UPCOMING HEARINGS  

Senate     

• HELP Committee

January 25; 10:00 AM

Why Does the United States Pay, By Far, The Highest Prices in the World for Prescription Drugs?

OTHER POLICY NEWS

• On December 19, the World Health Organization (WHO) announced that COVAX, the program established at the beginning of the pandemic to provide equitable access to COVID-19 vaccines, will officially end on December 31, 2023.