Health Care Watch: June 10, 2023

The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from June 4 – June 10. 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 7, the Ways & Means Committee marked up six bills aimed at expanding health benefit options and increasing flexibility for employees of small business. The pieces of legislation advanced to the House floor included: H.R. 1843, the Telehealth Expansion Act of 2023; H.R. 3799, the CHOICE Arrangement Act; H.R. 3798, the Small Business Flexibility Act; H.R. 3800, the Chronic Disease Flexible Coverage Act; H.R. 3797; the Paperwork Burden Reduction Act; and H.R. 3801, the Employer Reporting Improvement Act. These bills would permanently allow high-deductible health plans to cover telehealth before customers hit their deductibles, provide employees with flexibility with regards to personal health information, lower health care costs for families living with chronic health conditions, and allow employers to provide more flexible health benefit options.

Senate

• On June 7, Finance Committee Chairman Ron Wyden (D-OR) announced plans to probe how health insurers might be using artificial intelligence in patient care denials. He referenced data from a Kaiser Family Foundation (KFF) report in February that showed insurers denied 2 million prior authorization requests out of 35 million in 2021.  Chairman Wyden also stated that bipartisan legislation to reform pharmacy benefit managers (PBMs) is forthcoming.

• On June 7, Health, Education, Labor & Pensions (HELP) Chairman Bernie Sanders (I-VT) sent a letter to Department of Health & Human Services (HHS) Secretary Xavier Becerra urging the Department to act to substantially reduce the price of Leqembi, an Alzheimer’s treatment that is under review by the Food and Drug Administration (FDA).

REGULATORY UPDATE

• On June 5, HHS confirmed that the Centers for Medicare & Medicaid Services’ (CMS) Center for Medicare & Medicaid Innovation (CMMI) official Christina Ritter will temporarily lead the new Medicare division tasked with negotiating lower drug prices.  According to CMS documents, Ritter is listed as acting director of the Medicare Drug Rebate and Negotiations Group, which will lead the agency’s implementation of the Inflation Reduction Act (IRA).  Most recently, Ritter was the director of the Patient Care Models Group at CMMI.

• On June 5, the Federal Trade Commission (FTC) sent a notice to North Carolina lawmakers about encouraging health care consolidation, stating its opposition to a state Senate bill that would exempt the University of North Carolina health system from federal and state antitrust laws.

• On June 6, FDA granted its first full approval to an at-home COVID-19 test. The Cue COVID-19 Molecular Test, made by Cue Health, is the first at-home over-the-counter (OTC) test for COVID-19 to be granted marketing authorization using a traditional premarket review pathway and the first ever at-home test authorized using a traditional premarket review pathway for any respiratory illness.

• On June 6, Merck filed a lawsuit in the U.S. District Court for the District of Columbia to invalidate the IRA’s drug price negotiation program – on the grounds that the program violates the First and Fifth Amendments.  Merck’s Fifth Amendment claim is that the negotiation program takes property for public use without fair compensation by paying below fair market value for its drugs and effectively forcing the company to accept this “negotiated” price (given the ramifications of not doing so).  Merck’s First Amendment claim is that the program violates protections of free speech by forcing companies to sign agreements conceding that the prices are fair and have been truly negotiated.  Merck is requesting the court rule that the negotiation program is unconstitutional and prevent HHS from having Merck sign any agreements or agree to drug prices set by the program.  On June 9, the U.S. Chamber of Commerce filed a similar lawsuit in the U.S. District Court for the Southern District of Ohio challenging the drug price negotiation program as unconstitutional on separation-of-powers, due process, Excessive Fines Clause, enumerated powers, and First Amendment grounds.

• On June 6, a 5th U.S. Circuit Court of Appeals panel heard oral arguments on a challenge filed by employers in Texas to the Affordable Care Act’s (ACA) mandate that health insurance cover preventive care services, including the HIV prevention drug PrEP, with no out-of-pocket costs.

• On June 6, FDA announced the availability of a draft guidance with updated recommendations for good clinical practices (GCPs) aimed at modernizing the design and conduct of clinical trials. The updates are intended to help pave the way for more efficient clinical trials to facilitate the development of medical products.

• On June 7, FDA released its annual report on drug shortages, providing new details on pharmaceutical supply-chain disruptions in 2022 and summarizing the major actions taken by FDA during calendar year (CY) 2022 to prevent or mitigate drug shortages in the United States.

• On June 8, CMS announced a new primary care model – the Making Care Primary (MCP) Model – that will be tested via CMMI in eight states. The model seeks to improve care for patients by expanding and enhancing care management and care coordination, equipping primary care clinicians with tools to form partnerships with health care specialists, and leveraging community-based connections to address patients’ health needs as well as their health-related social needs. The goals of MCP are to 1) ensure patients receive primary care that is integrated, coordinated, person-centered and accountable; 2) create a pathway for primary care organizations and practices – especially small, independent, rural, and safety net organizations – to enter into value-based care arrangements; and 3) to improve the quality of care and health outcomes of patients while reducing program expenditures. The MCP website can be accessed here.

• On June 8, the Supreme Court, in a 7-2 decision, announced that people in safety net programs have the right to go to court over their care. In the case Health and Hospital Corp. v. Talevski, the Supreme Court sided with the family of a Medicaid recipient who wants to file a civil rights lawsuit against a state-owned nursing home, arguing the facility violated the rights of their now-deceased relative.

• On June 8, FDA’s Antimicrobial Drugs Advisory Committee (AMDAC) voted unanimously, 21-0, that Sanofi and AstraZeneca’s nirsevimab has a favorable benefit risk profile for the prevention of respiratory syncytial virus (RSV) lower respiratory tract disease (LRTD) in newborns and infants born during or entering their first RSV season. The Committee also voted 19 to 2 in support of nirsevimab’s favorable benefit risk profile for children up to 24 months of age who remain vulnerable to severe RSV disease through their second RSV season.

• On June 9, CMS released a list of 43 Part B drugs subject to the inflationary rebate under the IRA.  The rebates will be in effect between July 1 – September 30, 2023; however, CMS will invoice manufacturers for the rebates in 2025.  CMS indicated that Medicare beneficiaries who take these drugs may save between $1 and $449 per average dose starting July 1.  Under the IRA, Medicare beneficiaries may pay a lower coinsurance for some Part B drugs if the drug’s price increases faster than the rate of inflation.  A fact sheet is available here.

• On June 9, the Assistant Secretary for Planning and Evaluation (ASPE) released an IRA-mandated report on Medicare fee-for-service Part B drug spending and utilization from 2008-2021.  The report reveals that Part B drug spending in 2021 was $33 billion totaling 27% of total Medicare drug spending.  Part B drug spending increased at a 9.2% annual rate every year from 2008 through 2021.  This increase was more than triple the 2.6% hike for Part D and nearly 4 times as high as the rate of per capita annual prescription drug spending across all payers (2.4%).  Part B drug spending is concentrated among a small number of drugs: the top 20 drugs account for more than 50% of spending, while the top 10 account for 40%.  The report also reveals that the share of Part B spending in hospital outpatient departments nearly doubled from 23% in 2008 to 41% in 2021, while the share of spending in physicians’ offices declined from 63% to 53%.  A copy of the report can be found here.

• On June 9, FDA's Peripheral and Central Nervous System Drugs Advisory Committee unanimously agreed that Eisai and Biogen’s Alzheimer’s drug Leqembi verified the benefit of the treatment for those at an early stage of the disease.  The committee’s recommendation paves the way for traditional FDA approval for the drug.  FDA is expected to make a decision on Leqembi by July 6.

WHITE HOUSE UPDATE

• On June 8 the Biden Administration and HHS released national model standards for substance use, mental health, and family peer workers. The national model standards closely align with the needs of the behavioral health (peer) workforce, and subsequently, the over-arching goal of the national mental health strategy.

• On June 9, the Biden Administration announced that Dr. Ashish Jha is stepping down from his role as White House COVID-19 response coordinator on June 15.

RULES AT THE WHITE HOUSE OFFICE OF MANAGEMENT & BUDGET (OMB)

Pending Review

CMS

• Medicare Secondary Payer and Certain Civil Money Penalties (CMS-6061); Final Rule; 3/1/22

• CY 2024 Revisions to Payment Policies under the Physician Fee Schedule and Other Revisions to Medicare; Proposed Rule; 4/18/23

• Short-Term Limited Duration Insurance; Update (CMS-9904); Proposed Rule; 4/20/23

• CY 2024 Hospital Outpatient PPS Policy Changes and Payment Rates and Ambulatory Surgical Center Payment System Policy Changes and Payment Rates (CMS-1786); Proposed Rule; 4/20/23

• CY 2024 Changes to the End-Stage Renal Disease (ESRD) Prospective Payment System and Quality Incentive Program (CMS-1782); Proposed Rule; 4/21/23

• CY 2024 Home Health Prospective Payment System Rate Update and Home Infusion Therapy Services Payment Update (CMS-1780); Proposed Rule; 4/24/23

• Transitional Coverage for Emerging Technologies (CMS-3421); Notice; 4/24/23

• Minimum Staffing Standards for Long-Term Care Facilities (CMS-3442); Proposed Rule; 5/30/23

FDA

• Informed Consent: Guidance for Institutional Review Boards, Clinical Investigators, and Sponsors; Notice; 5/19/23

• Direct-to-Consumer Prescription Drug Advertisements: Presentation of the Major Statement in a Clear, Conspicuous, Neutral Manner in Advertisements in Television and Radio Format; Final Rule; 5/19/23

REPORTS

Office of Inspector General (OIG)

• On June 5, OIG released a report examining the National Institutes of Health (NIH) management of contracts for the acquisition of information technology. OIG identified areas within NIH's management of these orders that were not always conducted consistent with applicable Federal acquisition regulations and HHS acquisition regulations and policies. Specifically, the contracting officers or contracting officer's representatives (CORs) did not: 1) include all requirements for information security and privacy in appropriate acquisition documents and properly complete information security certification checklists; 2) review invoices and recommend invoice payments for 3 of 24 invoices for 1 order; and 3) complete contractor performance assessments timely. Additionally, NIH did not fully comply with the HHS Competition Advocacy Directive for fiscal years 2019, 2020, and 2021. OIG recommends that that NIH provide additional training and implement oversight controls to improve compliance with Federal acquisition requirements related to information technology procurements, contractor performance assessments, and competition advocacy reporting.

UPCOMING CONGRESSIONAL HEARINGS

House

• Oversight and Accountability Committee

Subcommittee on the Coronavirus Pandemic

June 13; 10:30 AM; 2154 Rayburn

Oversight of CDC Policies and Decisions During the COVID-19 Pandemic

Witnesses: Rochelle Walensky, former director of the Centers for Disease Control and Prevention

• Energy and Commerce Committee

Health Subcommittee

June 13; 10:30 AM; 2322 Rayburn

Legislative Solutions to Bolster Preparedness and Response for All Hazards and Public Health Security Threats

                Legislation under discussion:

• H.R. __, To reauthorize certain programs under the Public Health Service Act with respect to public health security and all-hazards preparedness and response, and for other purposes. (Rep. Richard Hudson);

• H.R. __, the Public Health Guidance Transparency and Accountability Act (Rep. Cathy McMorris Rodgers);

• H.R. __, the PHEMCE Advisory Committee Act (Rep. Richard Hudson);

• H.R. __, the PHE Congressional Review Act of 2023 (Reps. Greg Murphy and Brett Guthrie);

• H.R. __, the Improving Contract Transparency for the SNS Act (Rep. Morgan Griffith);

• H.R. __, the Improving Contract Transparency at BARDA Act (Rep. Morgan Griffith);

• H.R. __, the Biosecurity Infrastructure for Operational (BIO) Early Warning Act (Reps. Dan Crenshaw and Scott Peters);

• H.R. 3813, the CDC Leadership Accountability Act (Rep. Brett Guthrie);

• H.R. 3631, the State Strategic Stockpile Act of 2023 (Reps. Buddy Carter and Chrissy Houlahan);

• H.R. 3577, the Medical and Health Stockpile Accountability Act of 2023 (Reps. Richard Hudson and Josh Gottheimer);

• H.R. 3837, the Improving Public Health Preparedness Act (Rep. Mariannette Miller-Meeks);

• H.R. 3832, the Disease X Act of 2023 (Reps. Lori Trahan, Michael Burgess, Dan Crenshaw, and Susie Lee);

• H.R. 3613, the Doctors at the Ready Act (Reps. Kim Schrier and Bill Johnson);

• H.R. 2416, To amend the Public Health Service Act to reauthorize a military and civilian partnership for trauma readiness grant program. (Reps. Michael Burgess and Kathy Castor);

• H.R. 3840, the Ensuring Sufficient Supply of Testing Act (Reps. Neal Dunn and Debbie Dingell);

• H.R. 3795, To amend the Public Health Service Act to require the development of a diagnostic testing preparedness plan to be used during public health emergencies, and for other purposes. (Reps. Greg Pence, Kim Schrier, Larry Bucshon, and Andre Carson);

• H.R. 3703, the Helping Evaluate Appropriate Logistical Infrastructure for National Government (HEALING) Response Act of 2023 (Reps. Bob Latta and Robin Kelly);

• H.R. 3742, To direct the Comptroller General of the United States to evaluate the Federal Government’s collection and sharing of public health data to respond to public health emergencies. (Reps. Scott Peters and Brett Guthrie);

• H.R. 3820, To amend the Public Health Service Act to strike the requirement that the Director of the Centers for Disease Control and Prevention be appointed by and with the advice and consent of the Senate (Rep. Frank Pallone, Jr.);

• H.R. 3794, the Fast-Track Logistics for Acquiring Supplies in a Hurry (FLASH) Act of 2023 (Rep. Robert Garcia); and

• H.R. 3791, the Improving Data Accessibility Through Advancements (DATA) in Public Health Act (Reps. Lauren Underwood, Ami Bera, Kathy Castor, and Rosa DeLauro)

June 14; 10:30 AM; 2322 Rayburn

Examining Proposals that Provide Access to Care for Patients and Support Research for Rare Diseases

Legislation under discussion:

• H.R. 3226, the PREEMIE Reauthorization Act of 2023 (Reps. Anna Eshoo, Mariannette Miller-Meeks, Robin Kelly, Jen Kiggans, Lisa Blunt Rochester, and Michael Burgess);

• H.R. 3838, the Preventing Maternal Deaths Reauthorization Act of 2023 (Reps. Michael Burgess, Diana DeGette, Buddy Carter, Robin Kelly, Kat Cammack, and Kathy Castor);

• H.R. 3843, the Action for Dental Health Act of 2023 (Reps. Robin Kelly and Mike Simpson);

• H.R.__, the Sickle Cell Disease and Other Heritable Blood Disorders Research, Surveillance, Prevention, and Treatment Act of 2023 (Reps. Michael Burgess, Danny Davis, and Buddy Carter);

• H.R. 3821, the Firefighter Cancer Registry Reauthorization Act of 2023 (Reps. Bill Pascrell, Brian Fitzpatrick, Steny Hoyer, and Mike Bost);

• H.R. 2365, the National Plan to End Parkinson’s Act (Reps. Gus Bilirakis and Paul Tonko)

• H.R. 3391, the Gabriella Miller Kids First Research Act 2.0 (Reps. Jennifer Wexton, Tom Cole, Debbie Dingell, and Gus Bilirakis);

• H.R. 3887, the Children’s Hospital GME Support Reauthorization Act of 2023 (Rep. Dan Crenshaw); and

• H.R. 3836, the Medicaid Primary Care Improvement Act (Reps. Dan Crenshaw, Kim Schrier, Lloyd Smucker, and Earl Blumenauer).

• Education & the Workforce Committee

June 13; 10:15 AM; 2175 Rayburn

Examining the Policies and Priorities of the Department of Health and Human Services

Witnesses: Xavier Becerra, Secretary, HHS

Senate

• Health, Education, Labor & Pensions Committee

June 15; 10:00 AM; 430 Dirksen

Executive Session: S. 133, S. 134, S. 265, S. 1844, S. 1852, and S. 1855

Legislation under discussion:

• S. 133, NAPA Reauthorization Act;

• S. 134, Alzheimer’s Accountability and Investment Act;

• S. 265, SIREN Reauthorization Act;

• S. 1844, Animal Drug and Animal Generic Drug User Fee Amendments of 2023;

• S. 1852, Sickle Cell Disease and Other Heritable Blood Disorders Research, Surveillance, Prevention, and Treatment Act of 2023; and

• S. 1855, Special Diabetes Program Reauthorization Act of 2023.