Health Care Watch: March 25, 2024

The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from March 18 – March 24. 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 March 19, the House passed the Dr. Michael C. Burgess Preventive Health Savings Act by voice vote. The legislation, led by Reps. Michael Burgess (R-TX) and Diana DeGette (D-CO), would provide a framework for the Congressional Budget Office (CBO) to evaluate the long-term budget impacts of preventive health care legislation.  Specifically, the bill would require CBO to estimate whether a bill would save money over a 30-year budget window instead of the current 10-year window, if Congress requests it. The legislation serves to remedy lawmakers’ concerns that CBO’s scores don’t sufficiently reflect the benefits of preventive care.

• On March 19, Energy & Commerce Committee Chair Cathy McMorris Rodgers (R-WA) sent a letterto Government Accountability Office (GAO) Comptroller General Gene Dodaro requesting an investigation into GAO’s oversight of mental health funding, citing documents that show more than$3.8 billion remained unspent as of late last year.

• On March 20, the Ways & Means Committee health a hearing on President Biden’s Fiscal Year (FY) 2025 budget request for the Department of Health & Human Services (HHS).  Secretary Xavier Becerra was challenged by Republicans on the skilled nursing facility staffing rule, praised by Democrats for the successful exchange marketplace open enrollment period, and asked about the Department’s efforts to address the Change Healthcare breach.

• On March 20, the Appropriations Committee held a hearing on President Biden’s FY 2025 HHS budget request. During the hearing, Secretary Becerra faced questions from lawmakers on a wide range of health-related topics including whether the proposed budget had enough funding for pandemic preparedness and how HHS plans to address obesity.

• On March 20, the Energy & Commerce Committee held a markup of 28 bills, including many health-related pieces of legislation. The committee advanced more than a dozen health care bills including legislation that would largely reauthorize programs set to expire at the end of the fiscal year.

• On March 20, the Republican Study Committee released its FY 2025 budget proposal. The proposal calls for a restructuring of Medicare, along with the revocation of its new authority to “negotiate” the prices of certain prescription drugs. The proposed budget also proposes to convert the Medicaid and the Children’s Health Insurance Program (CHIP) into five block grants for states.

• On March 20, bipartisan Energy & Commerce Committee leadership announced they are launching a bipartisan investigation into the U.S. organ transplant system.  The committee sent letters to the United Network for Organ Sharing (UNOS) and the Health Resources and Services Administration (HRSA) requesting information on system operations, security measures, past shortcomings, and potential conflicts of interests.  They also requested updates from HRSA on the progress of bipartisan legislation enacted last year that authorized health officials to break up UNOS’s monopoly control of the transplant system.

• On March 21, the House and Senate Appropriations Committees released the second and finalbipartisan package of six fiscal year 2024 appropriations bills. The package provides $116.8 billionin funding for HHS, including $4.6 billion to support substance use prevention and treatment efforts, $1.86 billion for Community Health Centers, $3.6 billion for the Administration for Strategic Preparedness and Response (ASPR), and $48.6 billion in base discretionary funding for the National Institutes of Health (NIH).

• On March 22, the House passed the $1.2 trillion spending package in a 286-134 vote.  On March 23, the Senate passed the legislation 74-24.  President Biden is expected to sign the bill into law on March 23.  A summary can be found here.

• On March 22, Rep. Mike Gallagher (R-WI) announced that he will resign on April 19, leaving House Republicans with a one-seat majority.

• On March 22, Appropriations Committee Chair Kay Granger (R-TX) announced that she will give up her gavel.  Reps. Robert Aderholt (R-AL) and Tom Cole (R-OK) are expected to run for the vacated position.

• The House will return on April 9.

Senate

• On March 21, Health, Education, Labor & Pensions (HELP) Committee Ranking Member Bill Cassidy (R-LA) and Sen. Tommy Tuberville (R-AL) sent a letter to HHS Secretary Becerra asking that the agency provide additional information on how it has responded to the recent cyberattack on Change Healthcare. The letter asks that HHS respond to all questions by April 3, 2024.

• On March 22, Intelligence Committee Chair Mark Warner (D-VA) introduced legislation that would allow Medicare providers to get advance payments from the federal government in the event of a cyberattack, if they meet standards set by HHS. If intermediaries for a provider are hit by the attack, the legislation stipulates that they also would have to meet the standards for the provider to get the payments.

• The Senate will return on April 8.
  
  

REGULATORY UPDATE

• On March 18, the Food & Drug Administration (FDA) approved Lenmeldy (atidarsagene autotemcel), the first FDA-approved gene therapy indicated for the treatment of children with pre-symptomatic late infantile, pre-symptomatic early juvenile or early symptomatic early juvenile metachromatic leukodystrophy (MLD).  The manufacturer, Orchard Therapeutics, announced a wholesale acquisition cost of $4.25 million for the one-time treatment in the United States – making Lenmeldy the most expensive drug in the country.

• On March 18, FDA launched a new portal for patients, consumers and health care professionals to report potential drug shortage issues directly into the Center for Drug Evaluation and Research’s (CDER) NextGen system without creating a NextGen account.

• On March 18, HHS Secretary Becerra and Deputy Secretary Andrea Palm led a convening of payers to discuss concrete actions to mitigate harms to patients and providers caused by the cyberattack on Change Healthcare. Since the last meeting, HHS surveyed payers for data and information relating to actions they were taking to help providers resolve issues stemming from the cyberattack. During the meeting, Secretary Becerra and White House Domestic Policy Council Director Neera Tanden discussed the adjustments made to improve claims processing, but urged more support to providers who remain in need, particularly those serving vulnerable populations, rural hospitals and smaller institutions.

• On March 19, the Centers for Medicare & Medicaid Services (CMS) announced a new voluntary model, the Primary Care (PC) Flex Model, aimed at empowering primary care providers in eligible Accountable Care Organizations (ACOs) to treat people with Medicare using innovative, team-based, person-centered proactive care. The advanced shared savings payments provide ACOs with needed resources and flexibility to cover costs associated with forming an ACO (where relevant) and administrative costs for required model activities. Monthly prospective primary care payments (PPCPs) will be distributed by ACOs to primary care practices, giving them improved resources and flexibility to provide care that best suits individuals’ needs. The CMS Innovation Center will test this new model within the Medicare Shared Savings Program. The model will focus on and invest in low revenue ACOs, which tend to be smaller and mainly made up of physicians. A fact sheet detailing the model can be found here and frequently asked questions regarding the model can be found here.

• On March 20, CMS sent an email to Part D plans clarifying coverage for anti-obesity medications (AOMs) in Part D.  CMS notes that AOMs that receive FDA approval for “an additional medically accepted indication” can be considered a Part D drug for that specific use.  As an example, CMS notes that a GLP-1 drug that “receives FDA approval to treat diabetes or reduce the risk of major adverse cardiovascular events (cardiovascular death, non-fatal myocardial infarction, or non-fatal stroke) in adults with established cardiovascular disease and either obesity or overweight” would be considered a Part D drug for those specific uses only.  Finally, CMS maintains that Part D coverage is still not available for AOMs when used for chronic weight management in patients who do not have the additional medically accepted indication, unless provided as a supplemental benefit.  Recently, Novo Nordisk’s GLP-1 drug Wegovy (semaglutide) received an additional indication to reduce the risk of cardiovascular death, heart attack and stroke in adults with cardiovascular disease and either obesity or overweight. 

• On March 21, FDA approved Duvyzat (givinostat) oral medication for the treatment of Duchenne Muscular Dystrophy (DMD) in patients six years of age and older. Duvyzat is the first nonsteroidal drug approved to treat patients with all genetic variants of DMD.

• On March 22, HHS issued four new reports examining President Biden’s efforts to strengthen theAffordable Care Act (ACA). The announcements include a report from CMS showing that over 21 million consumers selected or were automatically re-enrolled in health insurance coverage through HealthCare.gov and State-based Marketplaces during 2024’s Open Enrollment Period (OEP). The three additional reports from HHS’ Office of the Assistant Secretary for Planning and Evaluation (ASPE) highlight current enrollment trends, enrollment trends broken down by race and ethnicity, and how the ACA Marketplaces have evolved and strengthened during the first ten years. ASPE’s analysis shows that over 45 million people have coverage due to ACA’s Marketplaces and Medicaid expansion.

• On March 22, HHS, through the Substance Abuse and Mental Health Services Administration (SAMHSA), announced notices of funding opportunities for grant programs addressing behavioral health across the country. The grant opportunities total $39.4 million with the goal of combatting the overdose epidemic and tackling the mental health crisis. All grant funding opportunities can be found here.

White House

• On March 18, President Biden signed an executive order (EO) that directs executive actions to expand and improve research on women’s health. The President and First Lady also announced more than twenty new actions and commitments by federal agencies including the launch of a new NIH-wide effort that will direct key investments of $200 million in FY 2025 to fund new, interdisciplinary women’s health research. The EO also directs actions that aim to integrate women’s health across the federal research portfolio, prioritize and increase investments, foster innovation, expand and leverage data collection, and strengthen coordination, infrastructure, and training to support women’s Health research.

• On March 18, President Biden announced a ban on ongoing use of asbestos as part of his commitment to the Cancer Moonshot program. President Biden stated that asbestos is linked to lung cancer, ovarian cancer, colorectal cancer, and more. He noted that the Environmental Protection Agency’s (EPA) new ban prohibits ongoing uses of chrysotile asbestos and highlighted that this action represents an important step to advance the Biden Cancer Moonshot goal of reducing the cancer death rate by at least half by 2047.

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

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

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

• Medicaid and Children's Health Insurance Program (CHIP) Managed Care Access, Finance, and Quality (CMS-2439); Final Rule; 12/20/23

• Ensuring Access to Medicaid Services (CMS-2442); Final Rule; 1/26/24

• Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals; the Long-Term Care Hospital Prospective Payment System; and FY 2025 Rates (CMS-1808); Proposed Rule; 1/31/24

• HHS Notice of Benefit and Payment Parameters for 2025 (CMS-9895); Final Rule; 2/15/24

• FY 2025 Hospice Wage Index, Payment Rate Update, and Quality Reporting Requirements (CMS-1810); Proposed Rule; 2/16/24

• Short-Term, Limited-Duration Insurance; Independent, Noncoordinated Excepted Benefits Coverage; and Tax Treatment of Certain Accident and Health Insurance (CMS-9904); Final Rule; 2/22/24

• Contract Year 2025 Policy and Technical Changes to the Medicare Advantage, Medicare Prescription Drug Benefit, and Medicare Cost Plan Programs, and PACE (CMS-4205); Final Rule; 2/22/24

• FY 2025 Inpatient Psychiatric Facilities Prospective Payment System Rate and Quality Reporting Updates (CMS-1806); Proposed Rule; 2/28/24

• Minimum Staffing Standards for Long-Term Care Facilities and Medicaid Institutional Payment Transparency Reporting (CMS-3442); Final Rule; 3/1/24

• FY 2025 Inpatient Rehabilitation Facility (IRF) Prospective Payment System Rate Update and Quality Reporting Program (CMS-1804); Proposed Rule; 3/4/24

• FY 2025 Skilled Nursing Facility (SNFs) Prospective Payment System and Consolidated Billing and Updates to the Value-Based Purchasing and Quality Reporting Programs (CMS-1802); Proposed Rule; 3/5/24

• Announcement of Calendar Year 2025 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies (the "CY 2025 Rate Announcement"); Notice; 3/20/24

FDA

• Medical Devices; Laboratory Developed Tests; Final Rule; 3/1/24

• Enforcement Policy for Certain In Vitro Diagnostic Devices for Immediate Public Health Response in the Absence of a Declaration under Section 564.; Notice; 3/5/24

• Consideration of Enforcement Policies for Tests During a Section 564 Declared Emergency; Draft Guidance for Industry and Food and Drug Administration Staff; Availability; Notice; 3/7/24

OCR

• Rulemaking on Discrimination on the Basis of Disability in Health and Human Services Programs or Activities; Final Rule; 3/4/24

• Health and Human Services Grants Regulation; Final Rule; 3/6/24

ONC

• Health Data, Technology, and Interoperability: Patient Engagement, Information Sharing, and Public Health Interoperability; Proposed Rule; 1/18/24

REPORTS

Congressional Budget Office (CBO)

• On March 20, CBO presented findings at the National Academies’ Roundtable on Obesity Solutions. CBO stated that that Treat and Reduce Obesity Act (TROA), which allows for Medicare Part D coverage of AOMs, would cost the government more than it would save in the first 10 years, noting that his could potentially change beyond a 10-year period. However, CBO’s current assessment is that at their current prices, AOMs would cost the federal government more than they would save from reducing other healthcare spending, which would lead to an overall increase in the deficit over the next 10 years.

Office of Inspector General (OIG)

• On March 18, OIG released a Medicare Advantage prior authorization impact brief. The impact brief states that OIG found that Medicare Advantage organizations (MAOs) sometimes delayed or denied Medicare Advantage enrollee access to needed services through their use of prior authorization. The brief finds that MAOs issue more than 1 million denials each year, and in 2019, an estimated 13% were for services that were medically necessary for the patient.

• On March 21, OIG released a video on OIG’s perspective on managed care. The video details the significant shift in how the government pays for and covers health care for approximately 100 million enrollees. Additionally, the video highlights OIG’s strategic plan as it relates to managed care. OIG has three goals regarding managed care: 1) promote access to care for people enrolled in managed care; 2) provide comprehensive financial oversight; and 3) promote data accuracy and encourage data-driven decisions.

UPCOMING HEARINGS

Senate

• Finance Committee

Hearing on the Change Healthcare Cyber Attack

April TBD

Potential Witnesses: United Health Group CEO Andrew Witty     

OTHER POLICY NEWS

• On March 18, AstraZeneca announced that it is capping out-of-pocket (OOP) costs for its inhaled respiratory products at $35 per month in the United States starting in June 2024. Subsequently, on March 20, GlaxoSmithKline (GSK) announced that it is also capping OOP costs for its inhaler products effective January 1, 2025.  The announcements follow a similar move by Boehringer Ingelheim earlier this month.

• On March 18, UnitedHealth Group stated that it has started to restore medical claims services disrupted by the recent Change Healthcare cyberattack. UnitedHealth Group stated that they are releasing medical claims preparation software which will be made available to thousands of customers over the next several days. The company expects to have third-party attestations available prior to services becoming operational. Additionally, the company stated that following this initial phase, remaining services restoration will continue through ongoing phases of activation until all customers have been connected.

• On March 18, the nation’s first over-the-counter birth control pill, the Opill, became available for purchase online. The drug, from Perrigo, is available on Opill’s website and Amazon.

• On March 20, Kentucky became the fourth state, alongside Arkansas, California, and Louisiana, to enact a law that would allow state and private health plans to switch prescriptions to non-interchangeable biosimilars. The bill, which also introduces additional step therapy protections in Kentucky’s Insurance Code, allows insurers, health plans, and pharmacy benefit managers to encourage adoption of non-interchangeable biosimilars without running afoul of patient protections in the step therapy process.

• On March 21, Massachusetts General Hospital announced the world’s first successful transplant of a genetically edited pig kidney into a 62-year-old man living with end-stage kidney disease.  Surgeons from the Mass General Transplant Center conducted the four-hour-long surgery with a genetically edited pig kidney with 69 genomic edits on March 16, and reported that the patient is in good condition and will be discharged soon.