Health Care Watch: July 15, 2024
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from July 7 – July 13. 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 July 10, the Appropriations Committee held a markup of the Labor, Health and Human Services (HHS), and Education, Transportation, Housing and Urban Development, and Agriculture, Rural Development, and Food and Drug Administration (FDA) funding bills. The legislation advanced out of committee. A summary of the Labor/HHS bill can be found here and a summary of the Agriculture, Rural Development, and FDA bill can be found here.
The House is in recess until July 22.
Senate
On July 9, Finance Committee Chairman Ron Wyden (D-OR) issued a statement following the release of a Federal Trade Commission (FTC) interim report on pharmacy benefit managers (PBMs) and their impact on the access and affordability of prescription drugs. In his statement, Chairman Wyden reaffirmed his commitment to PBM reform to lower drug prices and increase access to prescription drugs.
On July 10, Health, Education, Labor & Pensions (HELP) Committee Ranking Member Bill Cassidy (R-LA) sent a letter to HHS Inspector General Christi Grimm urging the Biden administration to explain its delays in implementing and enforcing regulations to prevent health information blocking. The letter asks for a response regarding how the Office of Inspector General (OIG) and National Coordinator for Health Information Technology (ONC) plan to enforce, conduct audits of, and monitor compliance with the information blocking prohibition.
On July 11, the Appropriations Committee unanimously advanced the Agriculture, Rural Development, FDA, and Related Agencies Fiscal Year 2025 Appropriations Act. The legislation provides $27.049 billion in total funding, an $821 million increase over fiscal year 2024, and $6.87 billion in total funding for the FDA, which includes $3.544 billion in discretionary funding—a $22 million increase over fiscal year 2024.
On July 11, the Senate unanimously passed the Affordable Prescriptions for Patients Act. The legislation aims to reduce anticompetitive practices in the drug market by restricting how many patents a pharmaceutical company can dispute during a specified period, otherwise known as “product hopping.” This legislation would dedicate $1.8 billion in savings to the Medicare Improvement Fund which Congress could use to fund other priorities, such as extending telehealth flexibilities beyond the end of the year.
On July 11, the HELP Committee held a hearing entitled What Can Congress Do to End the Medical Debt Crisis in America.Committee Democrats highlighted policies targeted at reducing medical debt, including erasing debt, while Committee Republicans discussed implementing policies to ensure hospitals use existing subsidies intended to offset the costs of charity care.
The Senate is in recess until July 23.
REGULATORY UPDATE
On July 8, the Substance Abuse and Mental Health Services Administration (SAMHSA) announced notices of funding opportunities, totaling $27.5 million, aimed at improving women’s behavioral health. SAMHSA additionally announced nearly $1 million in grant awards for two grant recipients as a part of the Services Program for Residential Treatment for Pregnant and Postpartum Women.
On July 8, the FDA released revised draft guidance entitled Addressing Misinformation About Medical Devices and Prescription Drugs Questions and Answers. The draft guidance aims to set out a policy that supports companies that issue certain kinds of internet-based communications (“tailored responsive communications”) to address internet-based misinformation about or related to their approved/cleared medical products when that misinformation is created or disseminated by an independent third party.
On July 8, the Centers for Medicare & Medicaid Services (CMS) released a list of nearly 400 organizations participating in the new Guiding an Improved Dementia Experience (GUIDE) model.
On July 9, CMS released the Standing Technical Expert Panel (TEP) for the Development, Evaluation, and Maintenance of Post-Acute Care (PAC) and Hospice Quality Reporting Program (QRP) Measurement Sets Summary Report. This report summarizes input provided by a TEP on December 15, 2023, on the development of additional cross-setting measures for the PAC and Hospice QRPs, and filling measurement gaps with CMS’ Universal Foundation measures. The report can be found here.
On July 10, CMS released the Calendar Year (CY) 2025 Hospital Outpatient Prospective Payment System (OPPS) and ASC Payment System proposed rule. CMS proposes updating OPPS payment rates for hospitals that meet applicable quality reporting requirements by 2.6%. This update is based on the projected hospital market basket percentage increase of 3.0%, reduced by a 0.4% productivity adjustment. The rule includes proposed policies that address health disparities, expand access to behavioral health care, improve transparency in the health system, and promote safe, effective, and patient-centered care. The rule also proposes to update Medicare payment rates for intensive outpatient program services and partial hospitalization program services and implement Section 4135 of the Consolidated Appropriations Act of 2023 (CAA) – which provides temporary additional payments for certain non-opioid treatments for pain relief in the hospital outpatient department and ASC settings. Additionally, the rule includes a proposal to pay separately for any diagnostic radiopharmaceutical with a per day cost greater than $630. A fact sheet detailing the proposed rule can be found here. Comments are due September 9, 2024.
On July 10, CMS released the CY 2025 Medicare Physician Fee Schedule (PFS) proposed rule. The proposed rule reduces average payment rates under the PFS by 2.93% in CY 2025 compared to the average amount these services are being paid for most of CY 2024. CMS proposes to decrease the CY 2025 conversion factor (CF) by 2.8%. This decrease is based on a statutory 0% update schedule for the PFS in CY 2025, a 0.05% positive budget neutrality adjustment, and the expiration of funding patches passed by Congress that partially mitigated cuts to the CF for CY 2023 and 2024. The rule proposes updates to the Medicare Shared Savings Program including establishing a new “prepaid shared savings” option, modifying the financial methodology to encourage participation, and accounting for the impact of improper payments in performance year and benchmark expenditures. The rule also proposes updates to Merit-based Incentive Payment System (MIPS) scoring methodologies and measure inventories and proposes six new MIPS Value Pathways (MVPs) – ophthalmology, dermatology, gastroenterology, pulmonology, urology, and surgical care. Finally, the rule proposes to add several services to the Medicare Telehealth Services List on a provisional basis. A fact sheet detailing the proposed rule can be found here. Comments are due September 9, 2024.
On July 10, ONC released the Health Data, Technology, and Interoperability: Patient Engagement, Information Sharing, and Public Health Interoperability (HTI-2) proposed rule. The HTI-2 proposed rule aims to advance interoperability and improve information sharing among patients, providers, payers, and public health authorities. Specifically, the HTI-2 proposed rule has two sets of new certification criteria designed to enable health IT for public health as well as health IT for payers to be certified under the ONC Health IT Certification Program and includes several proposed technology and standards updates that build on HTI-1 final rule. A fact sheet detailing the proposed rule can be found here. Comments are due 60 days after the proposed rule is published in the Federal Register.
On July 11, FDA released guidance entitled Clinical Considerations for Studies of Devices Intended to Treat Opioid Use Disorder. The guidance provides recommendations for the design of pivotal clinical studies for devices intended to treat opioid use disorder (OUD) and can be used to support marketing submissions.
WHITE HOUSE
On July 5, the Biden Administration released its Spring 2024 Unified Agenda. The Unified Agenda included 69 agency regulations and timelines including regulations on artificial intelligence (AI), health information technology (IT), and durable medical equipment (DME) bidding.
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
Administrative Simplification: Modifications to NCPDP Retail Pharmacy Standards (CMS-0056); Final Rule; 6/27/24
Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals; the Long-Term Care Hospital Prospective Payment System; and FY 2025 Rates (CMS-1808); Final Rule; 6/28/24
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); Final Rule; 6/28/24
FY 2025 Inpatient Rehabilitation Facility (IRF) Prospective Payment System Rate Update and Quality Reporting Program (CMS-1804); Final Rule; 7/2/24
FY 2025 Hospice Wage Index, Payment Rate Update, and Quality Reporting Requirements (CMS-1810); Final Rule; 7/8/24
FY 2025 Inpatient Psychiatric Facilities Prospective Payment System Rate and Quality Reporting Updates (CMS-1806); Final Rule; 7/8/24
FDA
Recommendations for Investigational and Licensed COVID-19 Convalescent Plasma; Guidance for Industry; Availability; Notice; 7/2/24
Expedited Program for Serious Conditions--Accelerated Approval of Drugs and Biologics; Draft Guidance for Industry; Availability; Notice; 7/9/24
REPORTS
Office of Inspector General (OIG)
On July 8, OIG released the Medicare Advantage Fraud Impact Brief. OIG stated that it examined risks in payments made to Medicare Advantage Organizations (MAOs), issuing over 40 reports since 2019. In a series of reports on health risk assessments (HRAs) and chart reviews, HHS-OIG raised concerns that MAOs could use these tools to generate $9.2 billion in potential improper payments annually for 2017. HHS-OIG audited specific diagnosis codes submitted by MAOs and found that 70% were not supported by underlying medical records. Additionally, OIG stated that Cigna paid the government $172 million to settle the case, which includes a refund for overcharging Medicare and penalties for fraud.
Government Accountability Office (GAO)
On July 8, GAO released a report examining substance misuse treatment and recovery for individuals living in residential facilities. GAO found that 14 to 33% of state-licensed treatment facilities nationwide require residents to work. Of the 35 licensed treatment facilities that reported either requiring or encouraging work, 11 reported that residents might start work immediately after arriving or after completing basic orientation. Additionally, GAO stated that among the 44 licensed treatment facilities that reported some of their residents work, 13 reported some residents work for no or reduced pay. GAO recommends that HHS: 1) develop a process to consult state substance misuse agencies about their guidance needs for incorporating work into treatment and recovery; and 2) state in Substance Use Prevention, Treatment, and Recovery Services (SUPTRS) Block Grant documents if/when work requirements are acceptable as a condition of accessing services in residential treatment and recovery facilities. HHS agreed with GAO's recommendations.
Federal Trade Commission (FTC)
On July 9, FTC released an interim report entitled Pharmacy Benefit Managers (PBMs): The Powerful Middlemen Inflating Drug Costs and Squeezing Main Street Pharmacies. The interim report is part of an ongoing inquiry by the FTC into PBMs and their impact on access to and affordability of medicines. FTC Chair Lina Khan noted that although the inquiry is still ongoing, the FTC issued the interim report given “there is enormous urgency in understanding PBMs’ practices.” The report found that the top three PBMs processed nearly 80% of the ~6.6 billion prescriptions dispensed by U.S. pharmacies in 2023, while the top six PBMs processed more than 90%. Pharmacies affiliated with the three largest PBMs accounted for nearly 70% of all specialty drug revenue. Notably, the report does not call for enforcement action against PBMs; however, the report notes that PBM industry “urgently warrant[s] further scrutiny and potential regulation.” The PBMs highlighted in the report include CVS Health’s Caremark, Cigna’s Express Scripts, UnitedHealth Group’s Optum Rx, Humana’s Pharmacy Solutions, Prime Therapeutics and MedImpact.
UPCOMING HEARINGS
House
Oversight and Accountability Committee
July 23
Hearing on PBM Practices
Potential Witnesses: Representatives from Optum Rx, CVS Caremark, and Express Scripts
Senate
HELP Committee
September 24; 10:00 AM; SD-562
ADDITIONAL POLICY NEWS
On July 3, a U.S. District Court in Connecticut rejected Boehringer Ingelheim’s (BI) legal challenge to Medicare’s drug price negotiation program. U.S. District Court Judge Michael P. Shea rejected BI’s claims that the negotiation program violates the First and Fifth Amendments. The judge also ruled that the company’s participation in the program is voluntary and that the program itself does not deprive the drug maker of any of its property rights.
On July 8, the Republican National Committee (RNC) adopted a new platform ahead of the 2024 Republican National Convention. The document states that former President Trump will not cut Medicare. The full platform can be found here.