Health Care Watch: August 9, 2021
The following FHP Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from August 2 – August 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.
NON-CORONAVIRUS LEGISLATIVE UPDATE
House
On August 4, 24 Democrats called for Health & Human Services (HHS) Secretary Xavier Becerra, Labor Secretary Marty Walsh, and Treasury Secretary Janet Yellen to close regulatory loopholes that could result in surprise bills and warned that expanded arbitration considerations could place undue harm and financial burdens on consumers.
The House is scheduled to resume its Committee Work on August 31 and return to Washington on September 20. However, it is possible that the House will return to Washington to vote on an infrastructure and/or budget resolution deal this month.
Senate
On August 2, the Appropriations Committee held a markup of the fiscal year (FY) 2022 Energy and Water, Agriculture, and MilCon Veterans Affairs Appropriations Bills. This included a markup of the S. 2599 Agriculture, Rural Development, Food & Drug Administration (FDA), and Related Agencies Appropriations Act. This $25.86 billion bill includes $3.4 billion in total funding for FDA to increase food safety and medical product safety activities. On August 4, the Appropriations Committee approved S. 2599 in a 25-5 vote. A summary of this bill is available here. The Committee report is available here.
On August 3, the Senate Health, Education, Labor and Pensions (HELP) Committee considered a series of nominations and held a markup of the following bills:
The Committee advanced all four bipartisan bills.
On August 5, 12 Democrats urged Majority Leader Chuck Schumer (D-NY), Finance Chair Ron Wyden (D-OR), and Budget Chair Bernie Sanders (I-VT) to include provisions to lower drug costs, specifically to allow Medicare to negotiate drug prices, in the upcoming reconciliation bill.
On August 1, Senate Democrats released the text of the $1.2 trillion infrastructure package. Notably, the bill would delay the Medicare prescription drug rebate rule until 2026, extend the 2% Medicare sequestration cuts through FY 2031, and give HHS the authority to require drug manufacturers to pay back the government for unused drugs that were packaged in single use vials beginning in 2023. Despite earlier rumors, the legislation does not rescind any unused Provider Relief Fund money. On August 2, the White House released an updated fact sheet on the package. On August 5, Congressional Budget Office (CBO) released a report estimating that the infrastructure package would increase the federal deficit by $256 billion over a 10-year period. The Senate Republican Policy Committee released an amendment tracker for the package. On August 7, the Senate voted to end debate on the measure by a vote of 67-27. Majority Leader Schumer hopes to hold a vote on final passage of this package and an FY22 Budget Resolution with reconciliation instructions before breaking for August recess.
On August 5, Finance Ranking Member Mike Crapo (R-ID) urged Treasury Secretary Yellen to release the Social Security and Medicare Trustees Report because, as per statute, the report should have been published no later than April 1.
On August 6, Finance Chairman Ron Wyden (D-OR), Sens. Sherrod Brown (D-OH), and Elizabeth Warren (D-MA) launched an investigation into private equity ownership of for-profit hospice companies and subsequent reductions in quality of care.
NON-CORONAVIRUS REGULATORY UPDATE
On August 2, Treasury Secretary Yellen sent a letter to Congressional leadership highlighting that the Treasury began using “additional extraordinary measures” because Congress has not extended the statutory debt limit. These measures are likely to be exhausted in late October or early November.
On August 2, the Federal Trade Commission (FTC) withdrew its antitrust lawsuit accusing AbbVie of using patent infringement lawsuits to block competitors from marketing generic versions of one of the company’s drugs. The FTC asked Congress for the authority to seek consumer redress.
On August 2, the Centers for Medicare & Medicaid Services (CMS) issued the final rule entitled FY 2022 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) Prospective Payment System (PPS). The final rule updates payment rates and policies for inpatient hospitals and long-term care hospitals for FY 2022. Additionally, CMS will establish new requirements and revise existing requirements for the Hospital Value-Based Purchasing (VBP) Program, Hospital Readmissions Reduction Program, Hospital- Acquired Condition (HAC) Reduction Program, Hospital Inpatient Quality Reporting Program, LTCH Quality Reporting Program, PPS-Exempt Cancer Hospital Reporting Program, and the Medicare Promoting Interoperability Program. The rule also finalizes the proposal to repeal the collection of market-based rate information on the Medicare cost report and the market-based MS-DRG relative weight methodology that was adopted effective for FY 2024. Lastly, the rule implements the imputed floor wage index provision of the American Rescue Plan Act of 2021. A fact sheet on the rule is available here.
On August 3, the White House Office of Management & Budget (OMB) concluded its review of the CMS proposed rule entitled the Most Favored Nation Model (CMS-5528). On August 6, CMS issuedthe proposed rule which rescinds the former Trump Administration’s Most Favored Nation (MFN) Model Interim Final Rule (IFR). CMS maintained that rescinding the Trump-era MFN Model IFR is based on the Biden administration’s view of “codification” of the rule and does not reflect “any judgement by HHS regarding future policy.” The rule also references the drug pricing directives in Biden’s recent competition Executive Order (EO) and adds that the Administration is exploring “all options” as they implement the EO and “incorporate value into payments for Medicare Part B drugs.”
On August 3, OMB received and concluded its review of the Centers for Disease Control and Prevention (CDC) rule entitled Temporary Halt in Residential Eviction to Prevent the Further Spread of COVID-19.
On August 4, CMS published the Center for Medicare & Medicaid Innovation’s (CMMI) 2020 Report to Congress. The report notes that CMMI tested, announced, or issued Notices of Proposed Rulemaking for 38 payment and service delivery models and initiatives and conducted six congressionally mandated or authorized demonstration projects. CMS estimates that nearly 28 million Medicare, Medicaid, and commercial beneficiaries have participated in CMMI payment and service delivery models and initiatives. The following models have resulted in savings: the ACO Investment Model; the Home Health VBP (HHVBP) Model; the Maryland All-Payer Model; the Medicare Prior Authorization Model: Repetitive Scheduled Non-Emergent Ambulance Transport; and the Pioneer ACO Model. The following models have resulted in significant improvements in quality: Comprehensive End-Stage Renal Disease Care Model, Comprehensive Care for Joint Replacement, and HHVBP models.
On August 4, CMS released data showing that monthly health insurance Exchange premiums fell, on average, 40% due to enhanced American Rescue Plan tax credits. Since the implementation of the tax credits, 34% of new and returning consumers have found coverage for $10 or less per month on HealthCare.gov. A state-by-state breakdown of savings is available here.
On August 4, the FDA announced its participation in “Collaborative Communities” forums, where private and public sector representatives work together on medical device challenges to achieve common objectives and outcomes.
On August 4, the FDA extended the comment period for the guidance entitled Remanufacturing of Medical Devices.
On August 5, HHS Secretary Becerra commemorated the 24th Anniversary of the Children’s Health Insurance Program (CHIP).
On August 5, the CDC released a National Health Statistics report on prescription opioid use among adults with chronic pain. Specifically, 22.1% of U.S. adults with chronic pain used a prescription opioid in the past three months in 2019.
On August 6, the FDA released an online portal for medical device manufacturers to notify the FDA of potential shortages
On August 6, the CDC released a National Health Statistics report on the geographic variation in health insurance coverage in the U.S. The report estimated that the distribution of health coverage for working-age adults was that 64.3% had private coverage, 25.9% had public coverage, and 12.0% were uninsured in 2019. There was some variation based on geographic location: 12.4% of those living in suburban areas were uninsured, compared to 17.5% for those living in nonmetropolitan counties. Working-age adults living in non-Medicaid expansion states were about twice as likely to be uninsured, compared with those living in Medicaid expansion states. There was also variation by state.
On August 6, FDA issued a notice announcing that implementation of a recent decision from the U.S. Court of Appeals for the District of Columbia Circuit in Genus Med. Techs., LLC v. FDA is expected to require some approved products to transition from drug status to device status. This notice provides information for stakeholders and solicits public comment to inform the Agency’s deliberations about products potentially impacted by the Genus decision and the way in which impacted products should be transitioned from drug to device status. Comments are due on October 8, 2021.
CMS will hold a virtual meeting on August 23 of the Advisory Panel on Hospital Outpatient Payment to advise the HHS Secretary and CMS Administrator concerning the clinical integrity of the Ambulatory Payment Classification groups and their associated weights, and supervision of hospital outpatient therapeutic services.
The Medicare Evidence Development & Coverage Advisory Committee (MEDCAC) will hold a public meeting on September 22 to examine relevant health outcomes in studies for cerebrovascular disease treatment, with a particular focus on new technologies of interest to CMS.
The CDC Advisory Committee on Immunization Practices will hold a meeting on September 29 and 30 to review and revise the list of vaccines for administration to vaccine-eligible children through the Vaccines for Children program.
NON-CORONAVIRUS WHITE HOUSE UPDATE
None of note.
CORONAVIRUS UPDATE
House
On August 2, Foreign Affairs Committee Ranking Member Michael McCaul (R-TX) and the minority staff published the third report on the origins of COVID-19, arguing that COVID-19 was accidentally released from a Wuhan Institute of Virology laboratory sometime prior to September 12, 2019.
Senate
On August 2, Sen. Lindsey Graham (R-SC) announced he tested positive for COVID-19, despite being vaccinated. Sen. Graham highlighted that since he is vaccinated, his symptoms are not as severe. On August 5, Rep. Ralph Norman (R-SC) also announced he tested positive for COVID-19, despite being vaccinated.
Regulatory
On August 3, the FDA announced it has taken an “all-hands-on-deck approach" to granting full authorization of the Pfizer COVID-19 vaccine, aiming to complete the process by early September.
On August 4, Surgeon General Vivek Murthy predicted that a COVID-19 vaccine for children under the age of 12 will be approved during the next school year.
On August 6, the CDC released its Morbidity and Mortality Weekly Report which found that being unvaccinated was associated with 2.34 times the odds of reinfection, compared with being fully vaccinated. This supports that even those who have previously had COVID-19 should get vaccinated.
White House
On August 3, President Biden announced that the U.S. has donated and shipped more nearly 112 million COVID-19 vaccine doses to more than 60 countries.
Other
On August 3, Germany announced that the Health Ministry will begin offering COVID-19 booster shots to elderly and at-risk populations beginning on September 1. On August 5, France also announced that seniors and vulnerable people will be able to receive a COVID-19 vaccine booster in the beginning of September.
On August 3, Lilly and Incyte Corp released additional results from a Phase III sub-study showing that baricitinib reduced the risk of death in COVID-19 patients on mechanical ventilation.
On August 3, Former HHS Secretary Alex Azar published an op-ed in the New York Times urging Americans to get vaccinated and touting the effectiveness of the COVID-19 vaccines.
On August 3, a study published in JAMA Network found that some vaccines are associated with myocarditis in younger patients at an incidence of about 4.8 cases per 1 million.
On August 3, San Francisco Department of Public Health announced that people who received the Johnson & Johnson’s COVID-19 vaccine can get a second “supplemental dose” from Pfizer-BioNTech or Moderna.
On August 4, Regeneron released the trial results in the New England Journal of Medicine to support the expansion of the EUA for REGEN-COV, a cocktail of casirivimab and imdevimab administered together, supporting its use as a preventive treatment for those high risk for severe COVID-19 if they’ve been exposed to COVID-19.
On August 4, World Health Organization Director General Tedros Adhanom Ghebreyesus urgedhigh-income countries to not begin promoting COVID-19 booster shots through at least September, due to lower-income countries currently struggling to access COVID-19 vaccines.
On August 5, Moderna announced that its COVID-19 vaccine continues to be 93% effective six months after the second dose and its booster candidates demonstrate robust antibody responses to COVID-19 variants in Phase II trials. Moderna aims to apply for full FDA authorization this month.
On August 5, Novavax announced that it expects to submit its COVID-19 vaccine for emergency use authorization (EUA) to the FDA in the fourth quarter of 2021. The company also announced positive results from its UK Phase III trial, finding that its co-administration of its influenza vaccine and COVID-19 vaccine was 87.5% effective against COVID-19. Novavax also released positive data supporting that a single booster dose given six months after the initial two doses elicited an increase in functional antibodies.
On August 6, a South African study that has yet to be published in a peer-reviewed journal found that the J&J COVID-19 vaccine is 71% effective at preventing hospitalizations and 96% effective at preventing death from the Delta variant.
Governors across the country are reinstating mask mandates and implementing vaccine mandates. On August 4, Massachusetts Governor Charlie Baker (R) issued a vaccine mandate for all staff in long-term care facilities, including skilled nursing facilities, or the state could order the nursing home to stop accepting new patients. On August 5, Maryland Governor Larry Hogan (R) implemented a vaccine mandate for state employees who work in congregate settings. On the same day, Virginia Governor Ralph Northam (D) implemented a vaccine mandate for all state employees, excluding teachers.
As of August 7, more than 143 million people in the U.S. have received the first dose of COVID-19 vaccines (more than 166 million have received both doses) and more than 407 million doses have been distributed, according to the CDC COVID Data Tracker. On August 2, the U.S. reached President Biden’s COVID-19 vaccination goal of 70% of American adults receiving at least one dose.
As of August 7, the U.S. had more than 35.7 million confirmed COVID-19 cases resulting in 616,710 deaths, according to the Johns Hopkins University & Medicine Coronavirus Resource Center. The CDC announced that the Delta variant now comprises more than 93% of all new COVID-19 cases.
RULES AT THE WHITE HOUSE OMB
HHS-CMS
Modification of Limitations on Redesignation by the Medicare Geographic Classification Review Board (CMS-1762); Interim Final Rule; Received 2/26/21
Basic Health Program; Federal Funding Methodology for Program Year 2022 (CMS-2438); Final Rule; Received 5/12/21
Reporting Requirements Related to Air Ambulance and Agent and Broker Services and HHS Enforcement Provisions; Proposed Rule; 7/7/21
HHS-FDA
Drug Supply Chain Security Act Implementation: Identification of Suspect Product and Notification; Guidance for Industry; Availability; Notice; 5/11/21
Definitions of Suspect Product and Illegitimate Product for Verification Obligations Under the Drug Supply Chain Security Act; Draft Guidance for Industry; Availability; Notice; Received 5/11/21
Product Identifiers Under the Drug Supply Chain Security Act Questions and Answers; Guidance for Industry; Availability; Notice; 5/11/21
Enhanced Drug Distribution Security at the Package Level Under the Drug Supply Chain Security Act; Draft Guidance for Industry; Availability; Notice; 5/11/21
REPORTS
HHS Office of Inspector General (OIG)
On August 2, OIG released a report entitled Almost 15 Percent of Arkansas' Private Contractor Costs Were Either Unallowable or Claimed at Higher Federal Matching Rates Than Eligible, Resulting in Arkansas Inappropriately Claiming $4.4 Million in Federal Medicaid Funds. The report found that Arkansas incorrectly claimed $12.4 million, or almost 15 percent of its costs, and inappropriately received $4.4 million in Federal funds for Federal fiscal years (FY) 2013 through 2017. OIG recommended that Arkansas refund the improper payments and establish policies and procedures to track its private Medicaid Management Information Systems contractor costs to Advanced Planning Documents (APDs) and to ensure that it adheres to the funding and time-period limits established in those APDs. Arkansas agreed with both recommendations. A summary of the report is available here.
On August 2, OIG released its updated work plan.
On August 4, OIG issued a notice that it intends to review the FDA's Accelerated Approval Pathway. OIG will review interactions between the FDA and outside parties and other aspects of the process, including deciding on this pathway and scientific disputes. OIG will not assess the scientific appropriateness of the FDA's approval of any of the drugs under review.
On August 6, OIG released a report entitled Nationwide, Almost All Medicaid Managed Care Plans Achieved Their Medical Loss Ratio Targets. The report found that States had established minimum medical loss ratios (MLRs) for 434 Medicaid managed care plans in 2017, 2018, or 2019 and 91% of plans met these State-set minimum MLRs. 92% of Medicaid managed care plans achieved MLRs that met or exceeded the Federal 85% MLR standard, regardless of whether their States had established minimum MLR requirements. OIG concluded that States that choose to establish minimum MLRs with requirements to return monies may recoup millions of Medicaid dollars from plans that fail to meet the State-set minimum MLRs. OIG will evaluate States' oversight of their Medicaid managed care plans' compliance with MLR reporting requirements and assess the completeness of MLR data that plans have reported to the States. A summary of the report is available here.
Government Accountability Office (GAO)
On August 3, GAO released a report entitled State and Local Governments: Fiscal Conditions During the COVID-19 Pandemic in Selected States. The report found that state tax revenues in the second quarter of 2020 dropped by $61 billion compared to the same period in 2019. Revenues rebounded in the third and fourth quarters. In 2020, most states increased public health and safety spending. States used different strategies to manage their financial situations, including using hiring freezes to cut spending, using reserve funds to help balance budgets, and using federal assistance to help manage increased demand for services like unemployment benefits. A summary of the report is available here.
On August 5, GAO released a report entitled COVID-19: HHS's Collection of Hospital Capacity Data.The report found that HHS made frequent and significant changes to the collection of hospital capacity data, to collect data on national- and state-level data on inpatient and intensive care beds in use, supplies of personal protective equipment (PPE), and COVID-19 treatments. Hospitals experienced challenges to implementing the changes, including a lack of clarity on the requirements and logistical challenges, including having to adapt their systems to provide the data. HHS agency officials and stakeholders identified key lessons learned, including the need for stakeholder engagement and improved communication. A summary of the report is available here.
UPCOMING CONGRESSIONAL HEARINGS
House
None of note.
Senate
None of note.
OTHER HEALTH POLICY NEWS
On August 1, a study published in Health Affairs found that hospitals with a higher share of Medicare patients had lower and more rapidly declining profits, and an increased likelihood of closure or acquisition compared with hospitals that were less reliant on Medicare.
On August 2, Senators Elizabeth Warren (D-MA) and Amy Klobuchar (D-MN) and Congressman Lloyd Doggett (D-TX) released a July 28 letter to HHS Secretary Becerra requesting an update on HHS’ plans to use administrative tools, including Section 1498 compulsory licensing and Bayh-Dole “march-in” rights, to reduce the prices of drugs. They also requested additional information including: what steps HHS has taken to conduct a review of the tools at HHS’ disposal to reduce the price of drugs; what drugs HHS is planning to target in efforts to reduce drug prices; and what policies will be include in HHS’ upcoming drug pricing report as directed by President Biden’s July 9 EO.
On August 3, Lilly announced that it aims to seek approval for donanemab for the treatment of Alzheimer's disease by the end of 2021.
On August 3, a study published in Health Affairs found that Medicaid expansion was associated with reductions in both the share and the population rate of uninsured surgical discharges in expansion versus nonexpansion states. The study estimates that the adoption of Medicaid expansion in nonexpansion states could have prevented more than 50,000 incidences of catastrophic financial burden resulting from uninsured surgery in 2019.
On August 3, Georgetown University and the Urban Institute released a report that found that small employers did all they could to maintain their health plans during COVID-19. The study found that rising costs are pressuring small employers to cut costs and pursue non-Affordable Care Act compliant coverage options, though they recognize that health coverage is a necessary recruitment and staff retention tool.
On August 4, the Commonwealth Fund published a report that found that the U.S. ranks last on access to care, administrative efficiency, equity, and health care outcomes, compared to other high-income countries. The U.S. ranks second on measures of care process but spends a greater share of its economy on health care than other high-income countries. The study identifies the following areas that distinguish other high-income countries from the U.S.: universal coverage and the removal of cost barriers; investment in primary care systems to ensure that high-value services are equitably available; reducing administrative burdens that divert time, efforts, and spending from health improvement efforts; and investment in social services, especially for children and working-age adults.
On August 5, the Institute for Clinical and Economic Review (ICER) released a report arguing that there is insufficient evidence supporting the clinical benefits of Biogen’s Alzheimer’s drug, Aduhelm. ICER also argued that Aduhelm should be priced at $3,000 to $8,400 annually based on its effectiveness.