Health Care Watch: June 24, 2024
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from June 16 – June 22. 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 June 17, Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA) released a draft plan to reform the National Institutes of Health (NIH). The plan would establish a new oversight process for certain pathogen research proposals and transfer power from NIH to a public, independent oversight entity to review, approve, or reject, and oversee the experiments. The draft plan also incorporates national security or intelligence reviews into NIH's existing grant approval process, adds reporting and conflict-of-interest policies, and sets five-year term limits for NIH institute directors.
The House is in recess until June 25.
Senate
On June 17, a group of Senate Democrats, led by Finance Committee Chairman Ron Wyden (D-OR), released draft legislation to address a rising trend of rural and underserved hospitals closing their labor and delivery units. The Keep Obstetrics Local Act (KOLA) would increase Medicaid payment rates for labor and delivery services for eligible rural and high-need urban hospitals, provide “standby” payments to cover the costs of staffing and maintaining an obstetrics unit at low-volume hospitals, create low-volume payment adjustments for labor and delivery services at hospitals with low birth volumes, and require all states to provide postpartum coverage for women in Medicaid for 12 months. A section-by-section summary of the legislation can be found here.
On June 20, Health, Education, Labor & Pensions (HELP) Committee Ranking Member Bill Cassidy (R-LA) sent a letter to Inspector General Christi Grimm asking that the Department of Health and Human Services (HHS) conduct an audit of safety standards at fertility clinics, ensuring human embryos are protected in their care. The letter also requests information about how the federal government collects and publishes data on fertility clinics.
REGULATORY UPDATE
On June 13, the Centers for Medicare & Medicaid Services (CMS) announced that, in light of recent court decisions, it is recalculating the 2024 Star Ratings for 2025 Quality Bonus Payment (QBP) purposes to address the application of Tukey outlier deletion and guardrails. CMS stated that it is not announcing any policy or position regarding the calculation of the 2025 Star Ratings, to be issued in October 2024.
On June 17, CMS announced that payments under the Accelerated and Advance Payment (AAP) Program for the Change Healthcare/Optum Payment Disruption (CHOPD) will conclude on July 12, 2024. CMS stated that it will continue to monitor for other effects of the cyberattack on Medicare providers of services and suppliers and will continue to engage industry partners to address any remaining issues or concerns.
On June 17, the Food & Drug Administration (FDA) approved Merck's pneumococcal vaccine, CAPVAXIVE, for prevention of invasive pneumococcal disease and pneumococcal pneumonia in adults.
On June 17, FDA approved pembrolizumab (Keytruda, Merck) with carboplatin and paclitaxel, followed by single-agent pembrolizumab, for adult patients with primary advanced or recurrent endometrial carcinoma.
On June 20, FDA announced a request for input about patient safety associated with certain medical software functions excluded from the “medical device” definition. FDA stated that input will help the agency develop the 2024 report on the risks and benefits to health of non-device software functions. Comments are due July 18, 2024.
On June 20, Change Healthcare announced that it is beginning the process of notifying individuals whose private information was compromised in the February 2024 cyberattack. Change Healthcare plans to begin notifying affected providers immediately and send letters to individual patients starting in late July.
On June 20, FDA expanded the approval of Elevidys (delandistrogene moxeparvovec-rokl), a gene therapy for the treatment of Duchenne muscular dystrophy (DMD) for ambulatory and non-ambulatory individuals 4 years of age and older with DMD with a confirmed mutation in the DMD gene.
On June 21, FDA issued updated draft guidance entitled Considerations for Demonstrating Interchangeability with a Reference Product: Update. The draft guidance describes considerations regarding a switching study or studies intended to support a demonstration that a biological product is interchangeable with a reference product. The guidance proposes to allow drug sponsors to submit an assessment of why comparative data shows the switching standard for safety and efficacy has been met, creating an alternative to conducting switching studies to support interchangeability. Comments on the draft guidance are due by September 20.
On June 21, a federal judge in Texas ruled that HHS overstepped its authority when it issued guidance warning hospitals that tracking visitors to their websites was a violation of health privacy rules. HHS argued that it was restating existing policy in a new context and that the guidance wasn’t binding, however, Texas Judge Mark Pittman stated that HHS tried to tweak the definition of individually identifiable health information to include web visits which was outside of the agency’s authority.
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
Misclassification of Drugs, Program Administration and Program Integrity Updates Under the Medicaid Drug Rebate Program (CMS-2434); Final Rule; 3/22/24
CY 2025 Changes to the End-Stage Renal Disease (ESRD) Prospective Payment System and Quality Incentive Program (CMS-1805); Proposed Rule; 4/18/24
CY 2025 Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Medicare Part B (CMS-1807); Proposed Rule; 4/18/24
CY 2025 Hospital Outpatient PPS Policy Changes and Payment Rates and Ambulatory Surgical Center Payment System Policy Changes and Payment Rates (CMS-1809); Proposed Rule; 4/24/24
CY 2025 Home Health Prospective Payment System Rate Update and Home Infusion Therapy and Home IVIG Services Payment Update (CMS-1803); Proposed Rule; 4/26/24
Mitigating the Impact of Anomalous Increases in Billing on Medicare Shared Savings Program Financial Calculations (CMS-1799); Proposed Rule; 5/28/24
FDA
Diversity Action Plans to Improve Enrollment of Participants from Underrepresented Populations in Clinical Studies; Guidance for Industry; Notice; 4/10/24
Addressing Misinformation About Medical Devices and Prescription Drugs: Questions and Answers; Draft Guidance for Industry; Availability; Agency Information Collection Activities; Proposed Collection; Notice; 5/21/24
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 June 17, OIG released a report examining NIH's accordance with federal requirements when closing contracts. OIG found that NIH did not always close contracts in accordance with Federal regulations and HHS policies and procedures. OIG stated that of the 30 contracts, totaling $2.1 billion, that OIG reviewed, NIH met all administrative closeout requirements for one contract totaling $140 million. However, for the remaining 29 contracts, totaling more than $1.9 billion, NIH did not meet one or more administrative closeout requirements. Administrative closeout requirements include but are not limited to the following: 1) performing a contract audit; 2) obtaining a contractor closing statement; and 3) performing a contract funds review. OIG recommends that NIH: 1) complete the administrative closeout requirements for the 29 contracts identified in the audit; 2) incorporate, by reference, the administrative closeout requirements from the Federal Acquisition Regulation and HHS Contract Closeout Directive into the NIH Policy Manual; 3) update the NIH Policy Manual to address the migration of contract file records to new contract management systems; and 4) establish control activities for monitoring the performance of contract personnel’s compliance with administrative closeout requirements.
Congressional Budget Office (CBO)
On June 17, CBO released a report examining the budgetary effects of policies that would increase hepatitis C treatment. CBO found that savings from health care costs that would be avoided by increased hepatitis C treatment would more than offset direct spending on that treatment.
On June 18, CBO published updated baseline projections of federal subsidies for health insurance coverage. In projections by CBO and the staff of the Joint Committee on Taxation (JCT), net federal subsidies in 2024 for insured people are $2.0 trillion. In 2034, that annual amount is projected to reach $3.5 trillion. Over the 2025 to 2034 period, subsidies are projected to total $27.5 trillion, with Medicare accounting for 46%; Medicaid and the Children’s Health Insurance Program (CHIP) 25%; employment-based coverage, 21%; subsidies for coverage obtained through the Affordable Care Act’s marketplaces or the Basic Health Program, 5%; and other subsidies, 2%. In an accompanying Health Affairs article, CBO also estimated that the share of people without health insurance reached an all-time low of 7.2% in 2023. The rate in 2034 is projected to be 8.9% because of the end of COVID-19 pandemic-related Medicaid policies, the expiration of enhanced Affordable Care Act subsidies, and a surge in immigration that began in 2022. Medicare enrollment is expected to increase from 60 million in 2023 to 74 million in 2034.
UPCOMING HEARINGS
House
Energy & Commerce
Oversight and Investigations Subcommittee
June 25; 7:00pm
Hearing on Examining Anti-Doping Measures in Advance of the 2024 Olympics
Ways and Means Committee
Likely June 26
Markup of Health Care Innovation Policies
Health Subcommittee
June 26; 3:00 PM; 1100 Longworth
Hearing on Improving Value-Based Care for Patients and Providers
Oversight and Accountability Committee
TBD
Hearing on Pharmacy Benefit Manager (PBM) Practices
Senate
HELP Committee
Early September
Hearing on Novo Nordisk’s drug pricing strategies
ADDITIONAL POLICY NEWS
On June 17, the Journal of the American Medical Association (JAMA) released a report examining overdose, behavioral health services, and medications for opioid use disorder (OUD) after a nonfatal overdose. JAMA found that, for a sample of 136,762 Medicare beneficiaries, subsequent nonfatal drug overdose and an opioid use disorder diagnostic code were associated with increased risk for fatal drug overdose, whereas receipt of a naloxone prescription, methadone, or buprenorphine treatment for opioid use disorder as well as behavioral health services were associated with decreased risk.