Health Care Watch: April 8, 2024
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from April 1– April 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 April 2, Energy & Commerce Committee Chair Cathy McMorris Rodgers (R-WA), Health Subcommittee Chairman Brett Guthrie (R-KY), and Oversight and Investigations Subcommittee Chairman Morgan Griffith (R-VA) wrote to the Government Accountability Office (GAO) asking to examine the extent to which the National Institutes of Health (NIH) safeguards research funds from national security concerns related to China. The letter can be found here.
Senate
On April 1, Homeland Security and Governmental Affairs Committee Chairman Gary Peters (D-MI) sent letters to four private equity firms seeking information about their involvement in hospital emergency departments and potential impacts on patient care. Specifically, the letters request information about business operations, staffing decisions, and patient care and safety at several emergency departments across the country. The letters follow interviews with more than 40 emergency medicine physicians across the country who raised concerns about patient care at private equity-owned physician staffing companies and private equity-owned hospitals, as well as their ability to provide care in the event of a major emergency.
On April 3, Sens. Ed Markey (D-MA) and Elizabeth Warren (D-MA) led a Health, Education, Labor & Pensions (HELP) subcommittee field hearing entitled When Health Care Becomes Wealth Care: How Corporate Greed Puts Patient Care and Health Workers at Risk. The hearing examined the role of private equity in health care and follows recent probes into private equity-owned physician staffing companies and emergency departments.
On April 4, Sen. Markey released draft legislation entitled the Health Over Wealth Act which aims to increase transparency around private equity investment in health care services companies, such as hospitals, dialysis centers, and physician groups. The legislation would require that both private-equity and for-profit health services owners disclose financial and operational data, including data regarding debt, political spending, wages, and the use of areas like hallways and waiting rooms for patient care.
REGULATORY UPDATE
On March 29, the Federal Trade Commission (FTC) and the Department of Health & Human Services (HHS) announced that they are extending the deadline for the public to comment on a joint Request for Information (RFI) that seeks to understand how the practices of group purchasing organizations (GPOs) and drug wholesalers may be contributing to generic drug shortages. The new comment deadline is May 30, 2024.
On March 30, the Food & Drug Administration (FDA) cleared for marketing Otsuka Pharmaceutical’s Rejoyn, a prescription digital therapeutic smartphone app for the treatment of Major Depressive Disorder (MDD) as an adjunct to clinician-managed outpatient care for adult patients aged 22 years and older who are on antidepressant medication, intended to reduce the symptoms of MDD. The app provides interactive cognitive-emotional and behavioral therapeutic intervention.
On April 1, the Centers for Medicare & Medicaid Services (CMS) finalized the Calendar Year (CY) 2025 Rate Announcement for the Medicare Advantage (MA) and Medicare Part D Prescription Drug (Part D) Programs. Under the CY 2025 Rate Announcement, payments from the Agency to MA plans are expected to increase on average by 3.7%, or over $16 billion, from 2024 to 2025, if coding trend is included (-0.16% if coding trend is removed). CMS is projected to pay MA plans between $500 and $600 billion in 2025. CMS also finalized updates to the Part D risk adjustment model to reflect the redesign of the Part D benefit as required by the Inflation Reduction Act (IRA). Finally, Star Ratings updates finalized in the CY 2025 Rate Announcement include the list of eligible disasters for adjustment, non-substantive measure specification updates, and the list of measures included in the Part C and D Improvement measures and Categorical Adjustment Index for the 2025 Star Ratings. A fact sheet and FAQ document for the Rate Notice can be found here.
On April 1, CMS released the final CY 2025 Part D Redesign Program Instructions. The final program instructions contain a detailed description of, and guidance related to, changes newly in place for CY 2025 made by the IRA, as well as guidance for CY 2023 Medical Loss Ratio (MLR) reporting related to the IRA Subsidy Amount (IRASA). The final instructions include guidance on: specialty tier cost sharing thresholds; costs counted towards true out-of-pocket costs (TrOOP); policy for drugs not subject to the defined standard deductible; government reinsurance methodology; and enhanced Alternative plan benefit designs. A fact sheet detailing the redesign can be found here.
On April 1, CMS sent a letter to the nation’s teaching hospitals and medical schools which includes new guidance to reiterate and provide clarity regarding hospital requirements for informed consent from patients as it relates to medical professionals performing sensitive examinations – including pelvic, breast, prostate, or rectal examinations – particularly on patients under anesthesia. The letter states that it is critically important that hospitals set clear guidelines to ensure providers and trainees performing these examinations first obtain and document informed consent from patients before performing sensitive examinations in all circumstances.
On April 1, HHS’ Office for Civil Rights (OCR) released a health equity fact sheet that details the actions OCR has taken to advance health equity, as directed in President Biden’s Executive Orders 14076, 13985, 14091, and 14110. Actions include OCR adoption of the definition of health equity, updating and clarifying regulatory provisions, and ensuring non-discriminatory access to health care service.
On April 1, HHS’ Office of the Assistant Secretary for Health (OASH) released a health equity fact sheet. Actions highlighted in the fact sheet include: development and implementation of the first-ever HHS sexual orientation and gender identity (SOGI) data action plan; introduction of behavioral health medical accession standards; establishment of the Office of Environmental Justice’s Community Innovator Challenge; and collection of healthy people 2030 disparity data. A list of all actions can be found here.
On April 1, HHS’ OCR announced a $100,000 civil monetary penalty against Essex Residential Care, LLC, doing business as Hackensack Meridian Health, West Caldwell Care Center, a skilled nursing facility (SNF) that provides long-term care and rehabilitation services. OCR investigated Hackensack Meridian Health under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy Rule for failing to provide a patient’s personal representative with timely access to the patient’s medical records.
On April 1, CMS announced a Notice of Funding Opportunity for the 2024 Minority Research Grant Program (MRGP). The MRGP supports researchers at minority-serving institutions who are investigating or addressing health care disparities affecting all minority populations. CMS will award up to five grants totaling up to $1,275,000. The application deadline is June 3, 2024. Additional information on the MRGP can be found here.
On April 2, HHS released the Notice of Benefit and Payment Parameters (Payment Notice) for 2025 final rule. CMS finalized standards for issuers and Marketplaces, as well as requirements for agents, brokers, web-brokers, direct enrollment entities, and assisters that help Marketplace consumers. Provisions in the rule include: expansion of access to dental benefits by finalization of a measures to allow states the option to add routine adult dental services as an essential health benefit (EHB) beginning in January 2027; mandatory review, by the Federally-facilitated Marketplaces (FFMs) or State Marketplaces and State-based Marketplaces, of a plan’s network information prior to certifying any plan as a qualified health plan (QHP); and extension of the special enrollment period (SEP) for consumers with household incomes at or below 150% of the federal poverty line (FPL) to enroll in coverage in any month rather than only during Open Enrollment. A fact sheet detailing the final rule can be found here.
On April 2, HHS released a white paper highlighting steps HHS has taken to prevent and mitigate drug shortages and proposesadditional solutions for policymakers to consider. HHS stated that the agency has established a new Supply Chain Resilience and Shortage Coordinator role to strengthen implementation of strategies to enhance supply chain resilience for pharmaceuticals and other medical products, and has issued guidance to increase supply chain transparency, while continuing to consider additional long and short-term solutions. Additional highlights include: new policy concepts for consideration, including collaboration with the private sector to develop and implement a Manufacturer Resiliency Assessment Program (MRAP) and a Hospital Resilient Supply Program (HRSP); and efforts to increase resilience and redundancy within the market by grading drugmakers on the resiliency of their supply chains. The white paper also proposes providing incentives and, eventually, penalties to hospitals with the goal of encouraging them to meet good purchasing practices to help avert shortages.
On April 2, HHS’ Office of the Assistant Secretary for Planning and Evaluation (ASPE) released new research showing how key IRA provisions will lower costs for women enrolled in Medicare, including nearly 30 million women enrolled in Part D. ASPE’s findings show that in 2020, about 733,000 women enrolled in Part D and Part B would have benefited from the IRA’s $35 per month cap on cost sharing for Medicare-covered insulin products, and, in 2021, about two million women would not have had any out-of-pocket costs for their recommended Part D covered adult vaccines. Additionally, the research finds that because of the law’s redesign of the Part D benefit, about 857,000 women who are not enrolled in the Extra Help program are projected to save $1,000 or more in 2025.
On April 3, FDA granted marketing authorization for the Sepsis ImmunoScore using the De Novo pathway. The Sepsis ImmunoScore, a product of Prenosis, is an artificial intelligence/machine learning software as a medical device (AI SaMD) that guides rapid diagnosis and prediction of sepsis. This authorization is the first ever FDA marketing authorization of an AI diagnostic tool for sepsis.
On April 4, CMS released the Contract Year (CY) 2025 Medicare Advantage and Part D final rule. The rule finalizes requirements that redefine “compensation” to set a clear, fixed amount that agents and brokers can be paid regardless of the plan the individual enrolls in, addressing loopholes that result in commissions above this amount that create anti-competitive and anti-consumer steering incentives. The rule also includes polices aimed at expanding network adequacy for behavioral health providers; applying new standards for supplemental benefits for the chronically ill; adding health equity perspective to prior authorization protocols; standardizing the MA plan risk adjustment data validation appeals process; providing plans with more flexibility on mid-year biosimilar and interchangeable formulary substitutions; and updating criteria for the Medicare Part D medication therapy management program. A fact sheet detailing the final rule can be found here.
White House
On April 2, the Biden Administration released a read out of the White House state legislative convening on paid family and medical leave. Tom Perez, Senior Advisor and Assistant to the President and Director of the White House Office of Intergovernmental Affairs, and Jennifer Klein, Assistant to the President and Director of the Gender Policy Council, convened state leaders to discuss legislative efforts to pass paid family and medical leave for workers as well as to learn from states that have implemented successful programs.
On April 3, President Biden and HELP Committee Chair Bernie Sanders (I-VT) held an event on their current and future work aimed at lowering health care costs. The pair discussed provisions of the IRA including the $35 insulin and $2,000 prescription drug caps as well as discussing potential policies such as lowering the cost of inhalers and GLP-1 medications. Full remarks can be found here.
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
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
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
Minimum Staffing Standards for Long-Term Care Facilities and Medicaid Institutional Payment Transparency Reporting (CMS-3442); Final Rule; 3/1/24
Misclassification of Drugs, Program Administration and Program Integrity Updates Under the Medicaid Drug Rebate Program (CMS-2434); Final Rule; 3/22/24
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
Office of Inspector General (OIG)
On April 1, OIG released a report examining 2018 and 2019 Biomedical Advanced Research and Development Authority (BARDA) appropriations. OIG found that Administration for Strategic Preparedness and Response (ASPR) may not have used BARDA FY 2018 and FY 2019 appropriations for their intended purpose in accordance with Federal requirements. Specifically, ASPR allocated joint funding arrangement (JFA) expenses to BARDA appropriations based on individual program office budgets instead of actual usage. Additionally, ASPR was unable to provide any documentation to support that any of the 30 employees sampled performed work for BARDA. OIG made several recommendations to ASPR, including that it establish policies and procedures for the JFA process and review the JFA allocation methodologies used for FY 2018 and FY 2019 and subsequent FYs.
On April 3, OIG released a report examining nursing home facility-initiated discharges in patients with endangering behaviors and mental health disorders. OIG found that nursing homes discharged 72 of the 126 residents in OIG’s review because of behaviors that endangered them or others in a facility. In most cases, the residents exhibited aggressive or violent behaviors. OIG noted that prior to discharging these residents, nursing homes most commonly tried changing medications and counseling. Additionally, residents discharged due to behaviors shared some characteristics such as a mental health disorder and admission for long-term versus short-term care. OIG concluded that the challenges that nursing homes face in caring for residents with mental health disorders raise questions about nursing homes’ admissions of and capacities to care for these residents. Additionally, OIG noted that more research is needed into how to provide safe and effective long-term care for residents with mental health disorders and behaviors.
On April 3, OIG released a report examining safeguards to protect residents during facility-initiated discharges from nursing homes. OIG found that in 107 of the 126 facility-initiated discharge cases in OIG’s review, nursing homes discharged residents for allowable reasons; however, OIG’s review raises concerns about nursing homes’ understanding of and compliance with notice and documentation requirements for facility-initiated discharges. OIG noted that nursing homes sometimes fell short in providing required documentation, and often failed to notify residents of their discharges and frequently omitted required information in notices, which may have compromised residents’ rights and abilities to plan for safe transitions. OIG recommends that CMS: 1) provide a standard notice template to help nursing homes provide complete and accurate information to residents facing discharge and Ombudsmen; and 2) require nursing homes to systematically document facility-initiated discharges in information available to CMS and States to enhance oversight.
UPCOMING HEARINGS
House
Oversight and Accountability Committee
April 11; 1:00 PM; 2145 Rayburn
Oversight of the U.S. Food and Drug Administration
Potential Witnesses: FDA Commissioner Robert Califf
Energy and Commerce Committee
Subcommittee on Health
April 10; 10:00 AM; 2123 Rayburn
Legislative Proposals to Support Patient Access to Telehealth Services
Legislation to be considered:
H.R. 134, To amend title XVIII of the Social Security Act to remove geographic requirements and expand originating sites for telehealth services
H.R. 1110, KEEP Telehealth Options Act of 2023
H.R. 3432, Telemental Health Care Access Act
H.R. 3875, Expanded Telehealth Access Act
H.R. 4189, CONNECT for Health Act of 2023
H.R. 5541, Temporary Reciprocity to Ensure Access to Treatment (TREAT) Act
H.R. 5611, Helping Ensure Access to Local TeleHealth (HEALTH) Act of 2023
H.R. 6033, Supporting Patient Education and Knowledge (SPEAK) Act of 2023
H.R. 7149, Equal Access to Specialty Care Everywhere (EASE) Act of 2024
H.R. 7623, The Telehealth Modernization Act of 2024
H.R. 7711, To amend title XVIII of the Social Security Act to make permanent certain telehealth flexibilities under the Medicare program
H.R. 7858, Telehealth Enhancement for Mental Health Act of 2024
H.R. 7856, The PREVENT DIABETES Act
H.R. 7863, To require the Secretary of Health and Human Services to issue guidance on furnishing behavioral health services via telehealth to individuals with limited English proficiency under Medicare program
H.R. ____, Hospital Inpatient Services Modernization Act
Senate
Finance Committee
Health Subcommittee
April 9; 2:30 PM; 215 Dirksen
Closing Gaps in the Care Continuum: Opportunities to Improve Substance Use Disorder Care in the Federal Health Programs
Witnesses: Brendan Saloner, Bloomberg Professor of American Health, Johns Hopkins Bloomberg School of Public Health, Johns Hopkins University; Malcolm Horn, Chief Behavioral Health Officer, Rimrock Foundation; Sarah Bagley, MD, Associate Professor of Medicine and Pediatrics, Associate Program Director, Grayken Fellow in Addiction Medicine, Boston Medical Center and Boston University Chobanian & Avedisian School of Medicine; Paul Christine, MD; Assistant Professor of Medicine; University of Colorado School of Medicine and Denver Health
April 11; 10:00 AM; 215 Dirksen
Bolstering Chronic Care through Medicare Physician Payment
Witnesses: Patricia Turner, MD, Executive Director and Chief Executive Officer, Executive Director and Chief Executive Officer; Steven Furr, MD, President, American Academy of Family Physicians; Melanie Matthews, Chief Executive Officer, Physicians of Southwest Washington (PSW); Amol Navathe, MD, Professor of Health Policy and Medicine, University of Pennsylvania
April 30
Hearing on Change Healthcare Cyber Attack and its fallout
Witness: Andrew Witty, CEO, United Health Group
OTHER POLICY NEWS
On April 4, Amylyx Pharmaceuticals announced that it will pull its ALS drug Relyvrio from the market after late-stage trial data showed that the drug doesn’t yield a clinical benefit for patients. The company said its decision was informed by discussions with the FDA, Health Canada and patients.
On April 11 and 12, the Medicare Payment Advisory Commission (MedPAC) will hold its April 2024 public meetings. Topics include a telehealth status update, inpatient rehabilitation facility (IRF) payment alternatives, the Medicare physician fee schedule, and generic drug pricing. More information on times and topics can be found here.