Health Care Watch: August 5, 2024
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from July 29 – August 3. 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 August 1, the Congressional Budget Office (CBO) published a document containing answers to questions for the record following the House Budget Committee hearing on the impact of hospital and physician consolidation on the federal budget. All questions and answers can be found here.
The House is in recess until September 9.
Senate
On July 30, the Senate passed the Kids Online Safety Act (KOSA) by a 91-3 vote. The legislation aims to address the youth mental health crisis and enhance online privacy and safety protections. The legislation would require digital platforms to take “reasonable” steps to protect children and extend existing federal privacy protections to include those 16 years and younger.
On July 30, the Senate passed the National Alzheimer's Project Act (NAPA) Reauthorization and the Alzheimer’s Accountability and Investment Act (AAIA). The NAPA Reauthorization Act would reauthorize NAPA through 2035 and modernize the legislation to reflect advancements in understanding of the disease. The AAIA would continue, through 2035, a requirement that the Director of the National Institutes of Health (NIH) submit an annual budget to Congress estimating the funding necessary to fully implement NAPA’s research goals.
On July 31, the Health, Education, Labor & Pensions (HELP) Committee held a markup of three bipartisan pieces of legislation: S. 4776, Older Americans Act Reauthorization Act of 2024, S. 4762, Autism Collaboration, Accountability, Research, Education, and Support Act of 2024, and S. 4755, a bill to reauthorize traumatic brain injury programs. All pieces of legislation were advanced out of committee in a 20-1 vote.
On August 1, the Appropriations Committee advanced the fiscal year (FY) Labor, Health and Human Services (HHS), and Education, and Related Agencies appropriations bill in a 25-3 vote. The bill provides $231.34 billion in base discretionary funding with $122.8 billion in discretionary funding for HHS. The bill also fully restores funding for the All of Us Research Program, BRAIN Initiative, and Cancer Moonshot back to their fiscal year 2023 levels. A summary of the legislation's main provisions can be found here.
On August 1, Finance Committee Chairman Ron Wyden (D-OR) and Sen. Marsha Blackburn (R-TN) introduced the Health Workforce Innovation Act which aims to address the ongoing health professional workforce shortage by providing federal support for innovative, community-led partnerships to educate and train more health care workers, especially in rural and underserved communities. A fact sheet detailing the legislation can be found here.
The Senate is in recess until September 9.
REGULATORY UPDATE
On July 29, the Centers for Medicare & Medicaid Services (CMS) released preliminary technical Medicare Part D bid information for contract year 2025. For 2025, the base beneficiary premium will be $36.78, a $2.08 increase from 2024; however, actual consumer premiums for 2025 will not be known until the fall. Additionally, CMS is announcing a voluntary demonstration to support implementation of the redesigned Part D benefit and improve stability and address variation for people with Medicare Part D in 2025. Specifically, the demonstration will test whether additional premium stabilization and revised risk corridors for stand-alone prescription drug plans (PDPs) increase the efficiency and economy of services under Part D as the benefit improvements and changes to plan liability for beneficiary costs under the Inflation Reduction Act (IRA) go into effect. The demonstration is voluntary and nationwide and is designed for one year with specific parameters and at least two subsequent demonstration years, with parameters to be adjusted to reflect market conditions and variation in those years. A fact sheet detailing the bid information and demonstration can be found here.
On July 29, CMS approved Governor Roy Cooper and the North Carolina Department of Health and Human Services’ (NCDHHS) plan to use the state's Medicaid program to incentivize hospitals to relieve more than a decade of existing medical debt for eligible North Carolinians and prevent accumulation of new debt going forward. The NCDHHS stated that the program has the potential to relieve $4 billion in existing medical debt for people and families across the state.
On July 30, CMS released the FY 2025 Hospice Payment Rate Update final rule. The FY 2025 hospice payment update percentage is 2.9%, an estimated increase of $790 million in payments from FY 2024. The finalized hospice cap amount for FY 2025 is $34,465.34, a 2.9% increase from the FY 2024 cap amount of $33,494.01. The rule also finalizes two new process measures to the Hospice Quality Reporting Program (HQRP), Timely Follow-up for Pain Impact and Timely Follow-up for Non-Pain Symptom Impact, expected to begin in FY 2028. The rule summarizes public comments received on the request for information (RFI) regarding potential social determinants of health (SDOH) elements and provides updates on health equity, future quality measures (QMs), and public reporting requirements. Finally, the rule makes changes to the Consumer Assessment of Healthcare Providers and Systems (CAHPS) Hospice Survey. A fact sheet detailing the final rule can be found here.
On July 30, HHS Secretary Xavier Becerra released a statement regarding the 59th anniversary of Medicare and Medicaid. Secretary Becerra stated that Medicare and Medicaid have given millions of Americans access to affordable, quality health care coverage and that the Administration is committed to protecting and strengthening both programs and the Administration will continue to expand Medicare and Medicaid to ensure all Americans have access to high-quality, affordable health care.
On July 30, SAMHSA released the results of the 2023 National Survey on Drug Use and Health(NSDUH), which shows how people living in United States reported their experience with mental health conditions, substance use and pursuit of treatment. Key findings include: 1) among adults aged 18 or older in 2023, 22.8% (or 58.7 million people) had any mental illness in the past year; 2) in 2023, 3.1% of people (8.9 million) misused opioids in the past year; and 3) 31.9% of adolescents aged 12 to 17 (or 8.3 million people) received mental health treatment in the past year, an increase of more than 500,000 from 2022. All key findings can be found here.
On July 30, CMS released the updated Skilled Nursing Facility (SNF) Provider Preview Reports. The reports contain provider performance scores for quality measures and can be found here during the October 2024 refresh.
On July 31, CMS released the FY 2025 Inpatient Rehabilitation Facility (IRF) Prospective Payment System (PPS) final rule. CMS finalized the update to the IRF PPS payment rates by 3% based on the final IRF market basket update of 3.5%, reduced by a 0.5 percentage point productivity adjustment. CMS estimates that the final technical rate setting changes will result in an increase in IRF payments of $280 million for FY 2025. The final rule also adopts four new items in the IRF-Patient Assessment Instrument (PAI) as standardized patient assessment data elements under the Social Determinants of Health (SDOH) category: 1) Living Situation (one item); 2) Food (two items); and 3) Utilities (one item). Finally, the rule states that CMS intends to develop a five-star methodology for IRFs that can meaningfully distinguish between quality of care offered by providers and would also be reported on both Care Compare and the Provider Data Catalog. A fact sheet detailing the final rule can be found here.
On July 31, CMS released the FY 2025 Medicare Inpatient Psychiatric Facilities (IPF) PPS final rule. CMS is updating the IPF PPS payment rates by 2.8%, based on the 2021-based IPF market basket increase of 3.3%, reduced by a 0.5 percentage point productivity adjustment. The rule finalizes a proposal to revise patient-level adjustment factors and to increase the per-treatment amount for Electroconvulsive Therapy (ECT). Additionally, the rule also finalizes the proposal to update the wage index using the latest Core‑Based Statistical Area (CBSA) Labor Market Areas from the Office of Management and Budget (OMB). A fact sheet detailing the final rule can be found here.
On July 31, CMS released the FY 2025 Skilled Nursing Facility (SNF) PPS. CMS is proposing a SNF net payment increase of 4.2%, or approximately $1.4 billion, in Medicare Part A payments to SNFs in FY 2025. The 4.2% increase is calculated based on the SNF market basket percentage increase of 3.0%, plus a 1.7 percentage point forecast error adjustment, reduced by a 0.5 percentage point productivity adjustment. The final rule includes provisions to expand the type of civil monetary penalties (CMPs) that can be imposed to allow for more per instance and per day CMPs to be imposed, as appropriate. Additionally, CMS is finalizing the adoption of four new items in the minimum data set (MDS) under the SDOH category: 1) Living Situation; (1 item); 2) Food (2 items); and (3) Utilities (1 item). Finally, CMS is adopting a measure selection, retention, and removal policy for the SNF Value-Based Purchasing (VBP) Program, as well as a technical measure update policy and a review and correction policy update. A fact sheet detailing the final rule can be found here.
On July 31, HHS, through HRSA, announced $68 million in Ryan White HIV/AIDS Program funding to provide family-centered medical care and essential support services for women with low incomes, infants, children, and youth with HIV.
On August 1, CMS released the FY 2025 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) PPS final rule. The rule projects an increase of 2.9% (or $2.9 billion) in operating payment rates for certain acute care hospitals in FY 2025 – reflective of the FY 2025 hospital market basket percentage increase of 3.4%, reduced by a 0.5 percentage point productivity adjustment. For LTCHs, CMS will increase the LTCH PPS standard Federal payment rate by 3.0%. CMS expects LTCH payments to increase by 2% (or $45 million). To help mitigate future drug shortages, CMS is finalizing its proposal to establish a separate payment to support small, independent hospitals in establishing and maintaining a buffer stock of essential medicines. As part of the rule, CMS is also finalizing the Transforming Episode Accountability Model (TEAM), a mandatory 5-year episode-based payment model, which would require acute care hospitals in specific geographic regions to be accountable for the cost of care for beneficiaries during and after certain surgical procedures. The model will begin January 1, 2026. A fact sheet detailing the final rule can be found here.
On August 1, HHS’ Office for Civil Rights (OCR) announced a CMP of $115,200 collected against American Medical Response (AMR), a provider of emergency medical services across the United States. The CMP was the result of an investigation based on a complaint that AMR had failed to provide a patient with timely access to their medical records.
On August 1, FDA named the members of its new Digital Health Advisory Committee which is responsible for advising FDA on the use of digital health technologies as medical products or parts of medical products. The committee, set to meet in November and will be chaired by Ami Bhatt, Chief Innovation Officer at the American College of Cardiology, with James Swink as Designated Federal Officer.
On August 1, a coalition of 17 Republican attorneys general, led by Virginia Attorney General Miyares, sent a letter to HHS and CMS demanding that they immediately reinstate the contractual agreement that was made with Maximus—a private call center headquartered in Virginia that handles calls about Medicare and Health Insurance Marketplace information—in September of 2022.
On August 1, CMS announced that the August 2024 Performance Score Reports (PSRs) for FY 2025 SNF Value-Based Purchasing (SNF VBP) Program are now available here.
On August 1, CMS announced the FY 2026 New Technology Add-on Payment (NTAP) applications will be due on October 7 by 5 pm EDT.
WHITE HOUSE
On July 31, President Biden issued a National Security Memorandum directing every Federal Department and Agency to take action to stop the flow of narcotics, including fentanyl into the country. The Memorandum will increase intelligence collection on traffickers’ tactics to smuggle narcotics into the country and help law enforcement personnel seize more illegal narcotics. The Memorandum will also make naloxone widely available over the counter. Additionally, President Biden called on Congress to pass the Administration’s “Detect and Defeat” proposals which aim to increase penalties on drug smugglers, give border officials key tools they need to target fentanyl at the border, and close other loopholes that traffickers exploit. A fact sheet detailing the Administration’s actions to counter the fentanyl crisis can be found here.
On August 2, Vice President Kamala Harris became the official Democratic party nominee after winning enough of the Democratic convention delegate votes.
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
HHS Notice of Benefit and Payment Parameters for 2026 (CMS-9888); Proposed Rule; 7/17/24
FDA
Expedited Program for Serious Conditions--Accelerated Approval of Drugs and Biologics; Draft Guidance for Industry; Availability; Notice; 7/9/24
Conducting Clinical Trials With Decentralized Elements; Guidance for Industry, Investigators, and Other Stakeholders; Availability (2023-814); Notice; 7/25/24
Integrating Randomized Controlled Trials for Drug and Biological Products Into Routine Clinical Practice; Draft Guidance for Industry; Availability; Notice; 7/25/24
REPORTS
Government Accountability Office (GAO)
On August 1, GAO released a report examining expanded use of supplemental nurses during the COVID-19 pandemic. GAO found that the use of supplemental nurses increased in the selected hospitals in GAO's review during the COVID-19 pandemic. Specifically, GAO requested data from 11 selected hospitals from 2019 to 2022. Of the six selected hospitals that were able to provide complete data for these 4 years, five of the hospitals reported that the proportion of registered nurse (RN) hours worked by supplemental RNs more than doubled. Overall use ranged from 2% to 28% in 2022. GAO made no recommendations in this report.
UPCOMING HEARINGS
Senate
HELP Committee
September 12; TBD
Testimony from Steward Health CEO Ralph De La Torre
September 24; 10:00 AM; SD-562
ADDITIONAL POLICY NEWS
On July 26, New York Attorney General Letitia James announced an $86 million multistate settlement in principle with opioid manufacturer Indivior for its alleged role in the Nation’s opioid epidemic. The funds will be used to support addiction treatment, recovery and prevention programs.
On July 31, Judge Zahid Quraishi of the U.S. District Court for the District of New Jersey rejected Novo Nordisk’s legal challenge against the IRA’s Medicare drug price negotiation program. Judge Quraishi, who rejected similar lawsuits from Bristol Myers Squibb and Johnson & Johnson earlier this year, concluded that participation in the program is voluntary, the program does not compel speech, and the program does not violate the unconstitutional conditions doctrine. Novo Nordisk plans to appeal the ruling.
On July 31, the blood donation nonprofit OneBlood experienced a cyberattack, forcing some hospitals to reschedule surgeries planned for the 31.